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Market research is the continuous process of gathering data on product and service characteristics, suppliers’ capabilities, and the business practices that surround the purchase and use of products and services. Market research is an essential component in the determination of whether to acquire or manufacture a product or service and can be used to:
Market research and benchmarking analysis differ from issuing and analyzing responses to a Request for Information (RFI), which is covered in Section 1-14, Develop, Issue, and Analyze Responses from RFI. There are two types of market research — primary and secondary. Primary research attempts to collect original information, usually through focus groups, surveys, field tests, interviews, or observation, and provides a direct understanding of the target market. Secondary research leverages previously collected information, often in the form of demographic information, prior surveys completed by others, industry trade information, reports and studies, publications, and other preexisting media. Primary research allows the organization to customize the study, but is also more complex, time consuming, and expensive than secondary research. Secondary research requires fewer resources than primary research; however, it tends to produce generalized results. An accurate analysis of the target market often requires use of both methods. Figure 1.6 provides sample market research activities and their intended purpose.
Figure 1.6
Sample Market Research Activities
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