Chapter 11, Problem 12AA

To determine

To state: The methods of conducting market research and the time when it is done.

Answer to Problem 12AA

Market research is done to get information about the kind of products or services customers need but do not currently have access to. It is also done to test out a new product before launching it.

There are four methods by which market research is done. They are survey, interviews, observation and focus groups.

Explanation of Solution

It is impossible to understand the needs of the users without conducting research. To know the potential opportunity of business available, it is important to analysis and research the needs of the consumers which are unfulfilled. With the increased competitiveness, it has become more important to understand the customers and the market potential by conducting market research.

There are a lot of different ways to conduct market research but only four techniques are most important and most used for better market research.

Survey is one of the most commonly used methodology of market research. The data is very straight forward making it easy to analyze. Also it is very inexpensive and easily understandable making it very relevant.

Interview is a face to face direct conversation with the prospective customer. Interview helps in getting insights and personal attention to the desires of the customers. A sense of empathy is what one can derive from it.

Observation is a process where a company takes notes when a user is engaged with a product of what they may want and need. It is also called customer observation where the customer not directly tells the company what they need but the company gets to know about their needs from their behavior and actions.

Focus groups consist of carefully selected person from the target market of the company. They are closely moderated by company personnel to understand their requirement, user experience and expectation from the product or service.

Economics Concept Introduction

Introduction:

Market research- it is an organized process of obtaining information about the potential customers and the target market forming an important component of business strategy.