Market Research

The process of assessing the viability of a new product or service through techniques such as surveys, product testing and focus groups. Market research allows a company to discover who their target market is and what these consumers think about a product or service before it becomes available to the public. Market research may be conducted by the company itself or by a third-party company that specializes in market research. Test subjects are usually compensated with product samples and/or paid a small stipend for their time.

For example, a company that was considering going into business might conduct market research first to test the viability of its product or service idea. If the market research confirms that company’s predictions, they can proceed confidently with their business plan. If not, they can use the results of the market research to make adjustments and do additional testing. Though market research can be expensive and time consuming, it should be less expensive and time consuming than fully developing and bringing to market a new product or service that will generate little or no interest from potential customers.