In the business world, market research serves as an organized effort to gather information about a certain target audience or customer as well as to discover if there is a market for a product or service. This information can involve analyzing and interpreting the potential customers that may be interested in a product or service, researching spending habits or studying the competition in a particular market.

Market research is extremely beneficial to companies because it can produce valuable knowledge regarding competitors, the market, certain products and consumers.

  • Competitors: Market research can be used to maintain an edge over competitors as well as keep an eye on a rival’s current status within the market.
  • The market/products: When market research focuses on analyzing a certain market, the examination should produce information about the market or product need, competition within the market or popularity of the product.
  • Consumers: Market research uses resources such as focus groups, in-depth interviews, ethnography and customer surveys to gain customer feedback about services or products.

Market research usually involves two types of data: primary information and secondary information. Market researchers need to gather primary information themselves, while secondary information is already available.

Primary information requires research to gather exploratory or specific information. The information is usually gathered via direct mail, telephone or personal interviews directed toward a targeted group. The most effective of these three is the personal interview, which can either be a group survey or an in-depth interview.

Secondary information may include resources from government agencies, trade associations or other industry-related businesses. Most information used in market research is from secondary information. Types of sources include public sources, commercial sources and educational institutions. Some government publications include the State and Metropolitan Area Data Book, the Statistical Abstract of the United States, U.S. Industry & Trade Outlook, the U.S. Census Bureau and the Small Business Administration, among others. Public libraries or college libraries have a wide range of periodicals, newspapers and newsletters as well as access to government publications.

SWOT analysis is extremely effective in market research. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. This written analysis helps a company understand its main objective and the factors that would be favorable or unfavorable for the desired outcome.

Through gathering primary and secondary information, market research analysis can more accurately show the supply and demand situation as well as different commodity costs. When working with clients, market researchers can help them to understand the technical, social and legal aspects of their targeted market.