3.2.1 The purposes of market research
Definition Market research is the process of collecting, recording and analysing data about customers, competitors and the market, to help a business make marketing decisions.
Market research reduces the risk of marketing decisions. Launching a product, entering a new country or changing a price without research is a guess; with good research it becomes an informed judgement. Research has two broad purposes.
Identifying the main features of a market
- Market size — the total value or volume of sales; tells the business whether the potential is worth pursuing
- Market growth — whether the market is expanding, stable or shrinking; a growing market offers opportunities without needing to take share from rivals
- Competitors — who they are, their market shares, prices, products and strengths and weaknesses; reveals gaps and threats
- Trends — changes in technology, tastes or regulation that will shape the market's future
Identifying customer and consumer characteristics
A customer is the person who buys the product; a consumer is the person who uses it. They are often the same person, but not always — parents buy toys that children consume; a company buys laptops its employees use. Research must understand both, because the customer decides to pay while the consumer's satisfaction drives repeat purchases.
- profiles — who buys: age, income, location, lifestyle (linking to segmentation, Topic 3.1.6)
- wants and needs — what features, quality and price they expect
- buying habits — how often, where, in what quantities, and how they find out about products
- reasons — why they choose one brand over another, and what would make them switch
Example Before entering India, IKEA (Sweden) spent years researching Indian homes — visiting families to see how they cooked, stored things and used space. The research led it to add products such as steel tiffin boxes and pressure-cooker-friendly kitchenware, and to plan large in-store restaurants serving Indian dishes.
🔒 Also in the full notes
- 3.2.2 Primary research and secondary research
- 3.2.3 Sampling
- 3.2.4 Market research data
- Exam practice: 5 practice questions
- 2 exemplar answers with full model answers and mark breakdowns
- Where students commonly lose marks
Join to unlock the full notesAlready a member? Log in