Definition of ‘Market Research’
For a business preparing a business plan and financial projection, market research is the process of obtaining information about customers and competitors to gain a thorough understanding of the target market in which it plans to operates.
The market research information will help formulate a marketing, selling, and pricing strategy and provide useful information for further product development.
Market research can be categorized as primary or secondary market research.
Primary market research is research the business carries out itself, including telephone surveys, email questionnaires, focus groups, and observations.
For example, the business might observe the passing trade at a proposed new premises at different times of the day to estimate the number of potential customers, or observe customers using competitor premises.
Secondary market research is research using published sources of market information carried out and compiled by third parties.
For example, if the business is preparing a coffee shop business plan, it might investigate benchmarks for coffee sales, average industry prices and profit margins, demographics for coffee drinkers etc.
For further information see the Wikipedia market research definition.
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