Market Research – collecting information about the customers' needs, wants and preferences that will help the business to make design, production and marketing decision to improve the chance of a market trade
We already know the term market and therefore the words market research are self evident. It is undertaking research on the market that you are interested in.
Why carry out market research?
Market research can help companies decide if a new potential product they have created will be appealing to any customers. If you find a large enough customer base or segment that may potentially buy your product, market research on the potential customer can help you decide how to design the packaging, for example. You need the best packaging to suit that customer base; fun and funky for young people or slick and minimal for professionals.
Market research reduces the risk of product and business failures. There is no guarantee of success, but an informed decision has less chance of failure. Market research helps identify the number of potential clients. It’s no good investing company resources if the client base is very limited. Research can help determine a price for your product. You can check what price competitors are charging so that your price isn’t higher. You can identify the risk of opening in an area, limiting the risk of failure by using research to find out the best location to open.
The benefits of excellent market research are many. From the above examples you can see that market research is a vital element when developing any business or product.