Market research is the acquiring of information about customer’s preferences, status, economic standing, demographics, etc in a way that is systematic and organized to produce results for analysis and study. Market research is used to determine the width, berth and depth of a market. In other words, market research is finding out how many people might be interested in a product or service based on who they are, what they do and how they behave.
Estimated market needs, size and completion can all be determined from the statistical analysis of the important information gleaned from the market research. The analysis of the information provides a critical stepping stone for gaining a competitive advantage over the completion in a market. The insight gained from applying the statistical and analytical methods and techniques of applied social sciences, offer support for decisions that can create a competitive advantage. A competitive advantage is the golden grail of business, everyone wants one, but not everyone will do the work required to get one.
Businesses have realized the relevance of the demographic information provided by market research since the advent of wide spread communication. Sponsorship of early radio programs in the early 1920’s most likely lead to the formalized market research programs of today. However, the true history may stretch back to formation of communities at river crossings because of the habits observed of people tending to cross the river at a specific site.
Primary Research and secondary research make up the two major classes of market research conducted today. Primary Research is actually divided into two subdivisions which are qualitative and quantitative research. In the terms of market research, the quantitative approach is one where a researcher asks a limited population a specific narrow based question in hopes of being able to apply the compiled answers mathematically to the general population in an unbiased way. Qualitative research asks broader based questions of larger populations. The researcher receives narrative answers that are then interpreted for themes and patterns exclusive to the participants. These are simple explanations of the in-depth approaches, but carrying out such studies may be well beyond the means of the typical start-up home business.
The good news about primary research, for the typically fund limited home business, is that there already exist huge databases of documented primary research information. Governments, universities, large corporations, news communities and libraries are among the sources for primary research information databases. These institutions have the resources required to compile the data required for the primary research. With the advent of the internet it may be more realistic for a home business operator to collect virgin primary research data, but the task will still require a huge amount of time and effort that may be better used elsewhere.
Secondary research is carried out behind the scene. Using the data compiled from the primary research efforts, the researcher summarizes, shifts, sorts, collates and synthesizes the previously collected data. The term desk research is often applied to secondary research because the researcher seldom is in contact with the primary source. There are free sources and pay-for sources of statistical data available, many from the same sources that have the primary research information.
Home businesses can effectively accomplish secondary research by summarizing articles, white papers, databases, books and so forth. Information on the conditions that exist within a market, assuming the analysis shows there is one, can let the business know the supply and demand situation, expected pricing, the competition, etc. The business can also determine the trends of the market to see if the products or services are moving up or falling off. Market research is a valuable tool to have in the pocket of a home business.
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