Market Research

Companies that sell products and services learn more about their current customers and target audiences through market research. They also use market research to learn more about their business reputation, brands, and other aspects of their organization. The definition of market research, according to Entrepreneur.com is: “The process of gathering, analyzing, and interpreting information about a market, about a product or service to be offered for sale in that market, and about the past, present, and potential customers for the product or service; research into the characteristics, spending habits, location, and needs of your business’s target market, the industry as a whole, and the particular competitors you face.”

Among the first steps in the business planning process is market research. Companies use it to help tackle such challenges as market segmentation, which is the identification of specific groups within a market, or product differentiation, the creation of an identity for a service or product to distinguish it from that of competitors. Market research companies gather, record, tabulate, and present data on marketing and public opinions. The services that market research companies offer include sampling and statistical services, broadcast media rating services, market analysis services, and political polling. Market research is conducted by telephone, e-mail, social media, snail mail, and face-to-face research (such as focus groups).

Jobs in the market research industry are found in market research agencies and at advertising agencies with market research capabilities. Many organizations also have their own marketing departments. The types of jobs in the field include research director or manager, research analyst, operations director, fieldwork manager, and statistician/data processing workers. The Bureau of Labor Statistics reports that 506,420 market research analysts and specialists were employed in the United States in May 2015. They worked for management, scientific, and technical consulting services; wholesale trade companies; finance and insurance companies, among others. Most people who work in market research work in a team and collaborate on projects for clients.

According to the research group IBISWorld, the U.S. market research industry generates $20 billion in revenue annually. There was .4 percent annual growth in the industry between 2011 and 2016. The industry has experienced slow, steady growth the past few years, and growth is expected to speed up in the coming years due to stronger corporate profits and more market research opportunities online and with social media. There are approximately 41,373 market research businesses in the United States.

The marketing industry is relatively young compared to other industries. It got its start in the early 1900s, when people started to take interest in the relationship between sellers and buyers. By the 1950s, fierce competition between companies had created a climate of aggressive selling without consideration of customers’ wants and needs. Companies realized this tactic was wearing thin on customers, and that the best way to have efficient, cost-effective operations was to understand customers better. This is when the marketing concept originated, which is the philosophy that companies should first analyze their customers’ needs and then any decisions they make should aim to meet them.

Next Section: Primary Products