Market Research
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Market research is the process of systematically gathering, recording and analyzing data and information about customers, competitors and the market. Its uses include to help create a business plan, launch a new product or service, fine tune existing products and services, and expand into new markets. Market research can be used to determine which portion of the population will purchase a product/service, based on variables like age, gender, location and income level.
Market research is generally either primary or secondary.[1] In secondary research, the company uses information compiled from other sources that appears applicable to a new or existing product. The advantages of secondary research are that it is relatively cheap and easily accessible. Disadvantages of secondary research are that it is often not specific to your area of research and the data used can be biased and is difficult to validate. Primary market research involves testing such as focus groups, surveys, field tests, interviews or observation, conducted or tailored specifically to that product.
A list of questions that can be answered through market research:
What is happening in the market? What are the trends? Who are the competitors?
How do consumers talk about the products in the market?
Which needs are important? Are the needs being met by current products?
[edit] Market research for business planning
Market research is for discovering what people want, need, or believe. It can also involve discovering how they act. Once that research is complete it can be used to determine how to market your specific product.
For starting up a business there are a few things that are important:
Market information
Market information is making known the prices of the different commodities in the market, the supply and the demand. Information about the markets can be obtained in several different varieties and formats.
Examples of market information questions are:
Who are the customers?
Where are they located and how can they be contacted?
What quantity and quality do they want?
What is the best time to sell?
Market segmentation
Market segmentation is the division of the market or population into subgroups with similar motivations. Widely used bases for segmenting include geographic differences, personality differences, demographic differences, use of product differences, and psychographic differences.
Market trends
The upward or downward movements of a market, during a period of time. The market size is more difficult to estimate if you are starting with something completely new. In this case, you will have to derive the figures from the number of potential customers or customer segments. [Ilar 1998]
But besides information about the target market you also need information about your competitor, your customers, products etc. A few techniques are:
Customer analysis
Choice Modeling