Using research to determine how best to market a product or service
Market research is any organised effort to gather information about customers, competitors or the market. It is a very important component of business strategy.
Market research is a way of getting an overview of customer needs, beliefs and discovering how they act. The research can be used to determine how a product could be marketed. Peter Drucker believed market research to be the quintessence of marketing. Market research is a key factor in maintaining competitiveness over competitors.
Market research techniques include focus groups, in-depth interviews, customer surveys, analysis of secondary data, direct observations, information on the internet, existing market research results, data from customer databases and industry bodies, government agencies, libraries and local councils.
Factors that can be investigated through market research include:
- Market information – The prices of different commodities in the market, as well as the supply and demand situation.
- Market segmentation – The division of the market or population into subgroups with similar motivations.
- Market trends – Is there upward or downward movement of a market, during a period of time.
- Customer return frequency.
- Sales figures.
- Customer demographics such as their age and gender.
- Customer feelings and attitudes towards your products.
- Customer satisfaction with your business.
- Review of competitors’ products and service practices.
All businesses benefit from market research as it helps them understand their customers, competitors, and the market. As times now change quickly in the world, market research needs to be periodically done to ensure a business is ‘switched on’ and up to date.