Question

Market research tools can be used to collect risk related information and data ready for analysis. Explain what they are and how they work. (Approx. 200 words

Answer 1

Market research is any collection of techniques that are used to collect information and better understand a target market for a product. There are several different ways that you can perform market research and collect consumer data, so you don't have to restrict yourself to only one type of study. Four strong market research techniques include surveys, interviews, focus groups and observation of customers.

1. Market Survey

The aim of the market survey is to gather business or customer information to reduce risk, gain competitive advantage, and gain consumer insight — all of which ultimately will increase profits.

Market research surveys in an unpredictable market help to reduce the risk of decision taking under certain conditions of uncertainty. A market survey tool is a vital component of business planning in that it helps you achieve a competitive edge.

2. Interview

Interviews are one-on-one interactions with target-market participants. Nothing beats a face-to-face interview for deep diving; any form of in-depth interview can offer major advantages in knowing your target audience and clients.

3. Focus groups

Focus groups put together a carefully selected group of people who suit the target audience for a product. To gain deeper perspectives, a professional moderator leads a discussion surrounding the product, user interface and/or marketing message.

4. Observation of customers

Observation provides a perfect alternative to focus groups. Not only is it less costly but you can see people engaging in a natural environment with the product without affecting each other. The only drawback is that you can't get inside their brains, so customer surveys and interviews are no substitute for observation.