What is market research?
Market research is the collection and analysis of information about customers, competitors and the market. It helps a business make better decisions and reduce risk before launching a product.
Key idea
Primary research collects new, first-hand data (for example a questionnaire). Secondary research uses data that already exists (for example government reports).
Types of data
- Quantitative data is numerical, such as how many people buy a product.
- Qualitative data is about opinions and reasons, such as why people like a product.
Because it is too costly to ask everyone, a business studies a sample — a smaller group chosen to represent the whole market. A larger sample is usually more reliable but more expensive.
Methods
Example
Primary methods include questionnaires, interviews, observation and focus groups. Secondary sources include internet data, government statistics and past sales records.
Remember
- Primary data is up to date and specific but slower and costly to collect.
- Secondary data is quick and cheap but may be out of date or biased.
Good research must be as accurate and unbiased as possible so decisions are based on reliable information.