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If you’re an entrepreneur starting a new business, doing market research can be vital in order to determine the feasibility of your business venture before committing substantial resources to it. Market research -- or the process of gathering, analyzing and interpreting information about a market to determine past, present and future customers for a product or service -- can occur in a variety of ways.
Doing market research means finding out information such as the industry as a whole, your competitors, where you stand in the market, product or service pricing and more.
It typically involves two types of data:
Primary research: This type of research you compile yourself or hire someone to gather for you, through conducting interviews, surveys, questionnaires and focus groups -- over the phone or through email. When conducting primary research, you can gather two basic types of information: exploratory or specific. Exploratory research is open-ended, helps you define a specific problem, and usually involves detailed, unstructured interviews in which lengthy answers are solicited from a small group of respondents. Specific research, on the other hand, is precise in scope and used to solve a problem that exploratory research has identified. Interviews are structured and formal in approach.
Secondary research: This type of research is already compiled and organized for you. Examples of secondary information include reports and studies by government agencies, trade associations or other businesses within your industry.