Market research can be understood as a process of gathering information to assist a business in becoming a more streamlined, effective, relevant and ultimately profitable company. The major distinction which separates market research from other types of research is the financial objective. While many other types of research may end up turning a profit, for example a pharmaceutical business will often profit from the development of a new drug, it isn’t the main priority of conducting the work.
In short, market research helps companies to understand their customer demographic and client base. The priority for understanding customers is finding out what they actually require from different companies. For somebody operating a car hire service the business must understand what type of cars the customers require, what locations would be most useful to operate the car hire business in and what is more important to them in relation to value and luxury.
Market research is also a great way of understanding the competition in the market in which you are working. Staying with the example of the car hire business, you may find that your competitors are offering added extras such as satellite navigation systems and discounted parking in the local area. Knowing this means that you can either offer similar services or adjust your prices accordingly and to reflect that you might offer a budget, no-frills service.
Market research is also used to test reactions to new features before they are implemented at a high cost to the business. If a car hire company was considering a new range of luxury cars it would be advisable to conduct market research beforehand to see if this would be relevant for the market. All these different facets of market research are used in an attempt to maximize profits and grow a business successfully; following your curiosity and researching your product will make sure that you can attain and keep consistent high standards.