Market Research: Definition, Purpose, and How to Do It

If you are wondering “What is market research?”, it is a process in business that aims to understand the market, customers, and competitors. 

By analyzing the data and information obtained from market research, companies can make better and more effective decisions in developing products, improving services, and becoming superior to competitors.

In the following article, you can find out what is market research, the benefits, the methods, and how to conduct market research to get maximum results.

What Is Market Research?

What is market research? It is the process of collecting, analyzing, and interpreting information about a company's target customers, competitors, and industry conditions. 

One of the benefits of market research is that companies can obtain in-depth information about various business-related factors, such as customer needs and preferences, brand image, and the consequences of investment decisions and business strategies.

There are two main types of market research: primary research, which involves collecting data directly from first sources, and secondary research, which uses existing information and public records. 

In addition, common market research methods include surveys, focus groups, interviews, and online research.

Through an in-depth understanding of the target audience, competitors, and overall market conditions, companies can make more informed decisions, identify new opportunities, and mitigate possible risks. Those reasons are why market research is important for your business.

Objectives of Market Research

After understanding what is market research, of course, this research has specific objectives in practice. Here are the market research objectives you need to know. 

1. Evaluating

Products or services that already exist in the market must be evaluated. From this evaluation, you can find out things that must be improved and improved to meet customer needs, or it turns out that your brand requires adjustments to pricing or marketing strategies.

2. Understanding

By understanding the market and customers, businesses can identify opportunities and challenges and understand customer preferences and needs. 

This means that the objective of market research is to help businesses develop products or services that match market demand to increase customer satisfaction.

3. Predicting

The next objective in market research involves making predictions about future market behavior. By analyzing market data and current industry trends, you can make predictions about customer needs and prepare business strategies to deal with market changes.

4. Controlling

Market research is a strategy that can help you control your business and monitor product or service performance. 

You can see whether the business is running well or needs evaluation. Thus, you can ensure that the product or service remains relevant and quality when circulating in the market.

How to Conduct Market Research

After knowing the purpose, you can immediately learn the steps in conducting market research. Here is how to do market research.

1. Evaluate Your Position

The first way to do market research is to clearly understand your current position or your business. 

Evaluate whether you already have a brand or are planning a new business, whether there are plans to launch new products, consider marketing strategies for existing products, or develop the business as a whole.

2. Set Goals and Target Market Research

Once you know where you stand, set clear objectives for your research. Each research should focus on solving a specific problem, such as discovering consumer preferences, introducing a brand, or evaluating the effectiveness of different types of advertising campaigns.

In addition, you should define the target audience of the research. You should also carefully select who will be the subject of the research and consider potential statistical errors or biases in sampling.

3. Determine the Appropriate Research Method

Next, decide on the market research method you will use. There are various research methods ranging from surveys, interviews, focus groups, market segmentation, customer satisfaction, or loyalty research to observational research. 

Additionally, you can customize the research method with your market research objectives and samples to get results that suit your business needs.

4. Determine the Population or Sample to be Analyzed

After determining the research method, identify the population you want to study and determine a representative sample of the population. 

This population can include various groups such as potential customers, existing customers, or even specific industry sectors. 

After identifying the population, the next step is to determine a representative sample (key characteristics) of that population. 

You can also consider the sample size as well, as too small a sample size can lead to inaccurate conclusions, while too large a sample size can consume unnecessary resources.

5. Collecting and Analyzing Data Results

The next step of market research is to collect data and analyze the results. After the complete research results have been collected from each respondent, it's time to do further analysis.

The data will be analyzed in a marketing report that explains the results of the research. After the results have been obtained and compiled, this report can be a consideration for company decision-making.

Conclusion

That was the complete explanation of what is market research, its purpose, and how to do it to collect relevant data and face market competition. 

As a business person, you should not hesitate to integrate market research as it will help you make better decisions, increase customer satisfaction, and achieve sustainable growth.

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