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Market research is an organized effort to gather information about
target markets A target market is a group of customers within a business Business is the activity of making one's living or making money by producing or buying and selling products (such as goods and services). Simply put, it is "any activity or enterprise ...
and customers: know about them, starting with who they are. It is an important component of
business strategy In the field of management, strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's managers on behalf of stakeholders, based on consideration of Resource management, resourc ...
and a major factor in maintaining
competitiveness In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods ...
. Market research helps to identify and analyze the needs of the market, the market size and the competition. Its techniques encompass both qualitative techniques such as focus groups, in-depth interviews, and ethnography, as well as
quantitative
quantitative
techniques such as customer surveys, and analysis of secondary data. It includes social and opinion research, and is the systematic gathering and interpretation of information about individuals or organizations using statistical and analytical methods and techniques of the applied social sciences to gain insight or support decision making. Market research,
marketing research Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing Marketing is the process of intentionally stimulating demand for and purchases of goods and ser ...
, and
marketing Marketing is the process of intentionally stimulating demand for and purchases of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; operation of adv ...

marketing
are a sequence of business activities; sometimes these are handled informally. The field of ''marketing research'' is much older than that of ''market research''. Although both involve consumers, ''Marketing'' research is concerned specifically about marketing processes, such as advertising effectiveness and salesforce effectiveness, while ''market'' research is concerned specifically with markets and distribution. Two explanations given for confusing ''Market research'' with ''Marketing research'' are the similarity of the terms and also that Market Research is a subset of Marketing Research.Market Research is a subset of Marketing Research Further confusion exists because of major companies with expertise and practices in both areas.US Census data is both for Market research and for Marketing research:


History

Although ''market research'' started to be conceptualized and put into formal practice during the 1930s as an offshoot of the advertising boom of the
Golden Age of radio The Golden Age of Radio, also known as the old-time radio (OTR) era, was an era of radio in the United States where it was the dominant electronic home entertainment medium. It began with the birth of commercial radio broadcasting in the earl ...
in the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

United States
, this was based on 1920s work by
Daniel StarchDaniel Starch (1883–1979) was an American psychologist A psychologist is a person who studies normal and abnormal mental states, perceptual, cognitive, emotional, and social processes and behavior by experimenting with, and observing, interpre ...
. Starch "developed a theory that advertising had to be seen, read, believed, remembered, and most importantly, acted upon, in order to be considered effective." Advertisers realized the significance of
demographic Demography (from prefix ''demo-'' from Ancient Greek Ancient Greek includes the forms of the Greek language used in ancient Greece and the classical antiquity, ancient world from around 1500 BC to 300 BC. It is often roughly divided ...

demographic
s by the patterns in which they sponsored of different radio programs. The
Gallup Organization Gallup, Inc. is an American analytics and advisory company based in Washington, D.C. Founded by George Gallup in 1935, the company became known for its public opinion poll An opinion poll, often simply referred to as a poll or a survey, is a ...
helped invent the public opinion poll; today, "Market research is a way of paying for it."


Market research for business/planning

Market research is a way of getting an overview of consumers' wants, needs and beliefs. It can also involve discovering how they act. The research can be used to determine how a product could be marketed.
Peter Drucker Peter Ferdinand Drucker (; ; November 19, 1909 – November 11, 2005) was an Austrian-American management consultant, educator, and author, whose writings contributed to the philosophical and practical foundations of the modern business corp ...
believed market research to be the quintessence of marketing. Market research is a way that producers and the marketplace study the consumer and gather information about the consumers' needs. There are two major types of market research: primary research, which is sub-divided into and qualitative research, and
secondary research Secondary research involves the summary, collation and/or synthesis of existing research. Secondary research is contrasted with primary research in that primary research involves the generation of data, whereas secondary research uses primary res ...
. Factors that can be investigated through market research include: *
Market information Market intelligence is the information relevant to a company's market (economics), market - market trend, trends, competitor and customer research, customer (existing, lost and targeted) monitoring, gathered and analyzed specifically for the purpos ...
: Through market information one can know the prices of different commodities in the market, as well as the supply and demand situation. Market researchers have a wider role than previously recognized by helping their clients to understand social, technical, and even legal aspects of markets. *
Market segmentation In marketing Marketing is the process of intentionally stimulating demand for and purchases of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; ...
: Market segmentation is the division of the market or population into subgroups with similar motivations. It is widely used for segmenting on geographic differences, demographic differences (age, gender, ethnicity, etc.),
technographic Technographic segmentation is a market research analysis tool used to identify and profile the characteristics and behaviors of consumers through the process of market segmentation. Traditionally market researchers focused on various demographic, p ...
differences,
psychographic Psychographics is a qualitative methodology used to describe trait Trait may refer to: * Phenotypic trait in biology, which involve genes and characteristics of organisms * Trait (computer programming), a model for structuring object-oriented prog ...
differences, and differences in product use. For B2B segmentation
firmographicsFirmographics (also known as ''emporographics'' or firm ''demographics'') are sets of characteristics to segment prospect organizations. What demographics are to people, firmographics are to organizations. However, Webster (2005) suggested that the ...
is commonly used. *
Market trend A market trend is a perceived tendency of financial markets to move in a particular direction over time. These trends are classified as ''secular'' for long time frames, ''primary'' for medium time frames, and ''secondary'' for short time frames. ...
s: Market trends are the upward or downward movement of a market, during a period of time. Determining the market size may be more difficult if one is starting with a new innovation. In this case, you will have to derive the figures from the number of potential customers, or customer segments. *
SWOT analysis SWOT analysis (or SWOT matrix) is a strategic planning technique used to help a person or organization identify strengths, weaknesses, opportunities, and threats related to business Business is the activity of making one's living or maki ...
: SWOT is a written analysis of the Strengths, Weaknesses, Opportunities and Threats to a business entity. A SWOT may also be written up for the competition to understand how to develop the marketing and product mixes. SWOT method helps to determine and also reassess strategies and analyze business process *
PEST analysis Pest or The Pest may refer to: Science and medicine * Pest (organism) A pest is any animal or plant harmful to humans or human concerns. The term is particularly used for creatures that damage crops, livestock, and forestry or cause a nuisance ...
: PEST is an analysis about external environment . It includes a complete examine of a firm's Political, Economical, Social and Technological external factors, which may impact firms' objectives or profitability. They may become a benefit for the firm or harm its productivity. *Brand health tracker: Brand tracking is way of continuously measuring the health of a brand, both in terms of consumers’ usage of it (i.e. Brand Funnel) and what they think about it. Brand health can be measured in a number of ways, such as brand awareness, brand equity, brand usage and brand loyalty. Another factor that can be measured is
marketing effectiveness Marketing effectiveness is the measure of how effective a given marketer's go to market strategy is toward meeting the goal of maximizing their spending to achieve positive results in both the short- and long-term. It is also related to marketing RO ...
. This includes:


Data collection

"Rigorous sampling methodologies combined with high-quality data collection" is what the magazine ''
Advertising Age ''Ad Age'' (known as ''Advertising Age'' until 2017) is a global media brand that publishes news, analysis, and data on marketing Marketing is the process of intentionally stimulating demand for and purchases of goods and services; potentia ...
'' considers the backbone of market research. Data collection can use larger audience samples than the few hundred or thousand typically used in market research. Also required is the (at least passive) cooperation of those being surveyed; trust is also helpful. Some data collection is incentivized: a simple form is when those on the road contribute to
traffic reporting Traffic reporting is the near real-time distribution of information about road A road is a thoroughfare, route, or way on land between two Location (geography), places that has been Pavement (material), paved or otherwise improved to allow trave ...
of which they are consumers. More complex is the relationship of
consumer-to-business Consumer-to-business (C2B) is a business model in which consumers (individuals) create value and businesses consume that value. For example, when a consumer writes reviews or when a consumer gives a useful idea for new product development then th ...
(C2B), which sometimes introduces reliability problems. Other data collection is to know more about the market, which is the purpose of market research.


International influence from the Internet

The international growth of available research both from and via the Internet has influenced a vast number of consumers and those from whom they make purchases. Although emerging global markets, such as China, Indonesia and Russia are still smaller than the US in
B2B e-commerce B2B e-commerce, short for business-to-business electronic commerce E-commerce (electronic commerce) is the activity of electronically buying or selling of Product (business), products on online services or over the Internet. The term was coined ...
, their internet-fueled
growth factor A growth factor is a naturally occurring substance capable of stimulating cell proliferation Cell proliferation is the process by which ''a cell grows and divides to produce two daughter cells''. Cell proliferation leads to an exponential gro ...
is stimulated by product-enhancing websites, graphics, and content designed to attract corporate and
consumer A consumer is a person or a group who intends to order, orders, or uses purchased goods, products, or Service (economics), services primarily for personal, social, family, household and similar needs, not directly related to entrepreneurial or bu ...
/
B2C Retail is the sale of goods In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption ( ...

B2C
shoppers. Estimates for 2010 show between
US$ The United States dollar (symbol A symbol is a mark, sign, or word In linguistics, a word of a spoken language can be defined as the smallest sequence of phonemes that can be uttered in isolation with semantic, objective or pragmatics, ...
400 billion and $600 billion in revenue was generated by this medium. A report titled "Global B2C E-Commerce and Online Payment Market 2014" indicated a decrease in overall growth rates in North America and Western Europe, even as absolute growth numbers rose. The UK Market Research Society (MRS) listed the top
social media Social media are interactive technologies that facilitate the creation Creation may refer to: Religion * Creation ''ex nihilo'', the concept that matter was created by God out of nothing * Creation myth A creation myth (or cosmogonic myth) ...

social media
platforms primarily used by
Millennials Millennials, also known as Generation Y or Gen Y, are the demographic Demography (from prefix ''demo-'' from Ancient Greek Ancient Greek includes the forms of the Greek language used in ancient Greece and the classical antiquity, ...
are
LinkedIn LinkedIn () is an American business- and employment-oriented online service that operates via websites and mobile apps. Launched on May 5, 2003, the platform is primarily used for professional networking and career development, and allows job se ...
,
Facebook Facebook is an American online social media and social networking service owned by Meta Platforms. Founded in 2004 by Mark Zuckerberg with fellow Harvard College students and roommates Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, an ...

Facebook
,
YouTube YouTube is an American online video sharing and social media platform Social media are interactive technologies that allow the Content creation, creation or information sharing, sharing/exchange of information, ideas, career interests, an ...

YouTube
and
Instagram Instagram is an American photo 396x396px, '' View from the Window at Le Gras'' (1826 or 1827), by Nicéphore Niépce, the earliest known surviving photograph of a real-world scene, made with a camera obscura. Original (left) & Film coloriz ...

Instagram
.


Research and market sectors

Regarding details for worldwide corporate market research, "most of them are never written about because they are the consumer research done by the country's manufacturers." Market research data has loss prevention aspects; that less than 60 percent of all proposed modifications and new products are deemed failures. When information about the market is difficult to acquire, and the cost of "going ahead with the decision" to offer the product or service is affordable, the research cost may be more profitably used "to ensure that the new line got the advertising send-off it needed to have the best chances of succeeding." As measured in revenue, USA based
Amazon.com Amazon.com, Inc. ( ) is an American multinational Multinational may refer to: * Multinational corporation, a corporate organization operating in multiple countries * Multinational force, a military body from multiple countries * Multinational ...
is the worldwide E-Commerce leader.


Market research for the film industry

The film industry is an example where the importance of testing film content and marketing material involves: # concept testing, which evaluates reactions to a film idea and is fairly rare; # positioning studios, which analyze a script for marketing opportunities; # focus groups, which probe viewers' opinions about a film in small groups prior to release; # test screenings, which involve the previewing of films prior to theatrical release; # tracking studies, which gauge (often by telephone polling) an audience's awareness of a film on a weekly basis prior to and during theatrical release; # advertising testing, which measures responses to marketing materials such as trailers and television advertisements; # exit surveys, that measure audience reactions after seeing the film in the cinema.


Small businesses and nonprofits

Small organizations and non-profits can derive needed information by observing the environment of their location. Small scale surveys and focus groups are low cost ways to gather information from potential and existing customers and donors. While secondary data (statistics, demographics, etc.) is available to the public in libraries or on the internet, primary sources, done well, can be quite valuable: talking for an hour each, to twelve people, two apiece from six potential clients, can "get inside their minds.. get a feel for their needs, wants and pain. You can’t get that from a questionnaire."


See also

*
Marketing research Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing Marketing is the process of intentionally stimulating demand for and purchases of goods and ser ...
*
Marketing Research Institute International (MRII) The Marketing Research Institute International (MRII) is a non-profit institute affiliated with the University of Georgia and devoted to fulfilling the continuing educational needs of people worldwide in the marketing research profession. It begi ...
*
Mystery shopping Mystery shopping (related terms: mystery shopper, mystery consumer, mystery research, secret shopper and secret shopping and auditor) is a method used by marketing research companies and organizations that wish to measure quality of service, qualit ...
*
Nielsen ratings Nielsen TV ratings (commonly referred to as Nielsen ratings) are the audience measurement Audience measurement measures how many people are in an audience An audience is a group of people who participate in a show or encounter a work of art ...


References


External links

*
Small Business Administration The U.S. Small Business Administration (SBA) is a United States government The federal government of the United States (U.S. federal government or U.S. government) is the Federation#Federal governments, national government of the United ...

Market research and competitive analysis
{{Authority control Business process zh:市場調查