Market Research is an organized attempt to gather data on potential consumers and target markets: learn about them, beginning with whom they are. Market research is one of the most important elements of strategic management and a key ingredient in sustaining competitive advantage. A market research company has a responsibility to develop and maintain databases that contain information relevant to the success or failure of a specific venture. Market research companies use multiple methods of surveys including traditional methods, internet-based surveys, focus groups and interviews.
In a traditional market research survey, the researchers observe the behavior of a specific market segment at one time; compare it to the current market situation; make statistical comparisons between the existing situation and the predicted one and make projections. In addition, the surveys also allow the researcher to ask questions relevant to the particular field of study that is under study. These questions may range from product attributes and features, pricing, advertising and promotional activities, purchase habits, etc. However, sometimes, market research companies choose to combine conventional surveys with focus groups. This method helps the researchers to obtain important insights that will be helpful in designing better products or services.
In an internet-based focus group, market research researchers create and build a representative sample of respondents by inviting them to take part in a focus group discussion. They use the discussions to obtain data sets consisting of the opinions and thoughts of the respondents. The selected focus group participants are then interviewed, through one-on-one interviews, to obtain further details on the opinions and actions of the selected respondents.
As an alternative to surveys, market research companies may also decide to conduct focus groups during special events like trade shows, fairs, exhibitions, presentations and other similar events. Conducting online surveys enables the company to obtain more data, and in turn, improve its overall understanding of what consumers want and need. Online market research companies usually employ sophisticated tools and high-level techniques to collect data. The collected information is then processed and analyzed by researchers. The results of the analysis are used to design and launch new products and services.
One of the ways to conduct efficient and effective market research lies in developing user personas. User personas are unique and specific representations of the actual consumer. These represent the attitudes, buying preferences and other general characteristics of real consumers. These user personas enable researchers to create a profile of a typical consumer so that changes in buying behavior can be observed over time. Indeed, by observing the reactions of a typical consumer, a new product or service can be designed that will be most appealing to this consumer.
Another way to observe consumer buying behavior is through in-depth interviews. Although this process involves a large amount of time and effort, it is still an effective tool in conducting effective market research. Interviewing people in-depth about their shopping habits allows researchers to draw general conclusions about how the buying public feels about particular products. This type of in-depth interviewing also allows researchers to obtain data on what factors, if any, are influencing the level of consumer satisfaction with a product or service. Data gathered from interviews, however, cannot provide the same insight into consumer buying behavior that data collection and analysis can. Because of this, researchers must rely on other techniques such as consumer surveys to gain a greater understanding of how consumers actually shop.