What is a Market Research? Definition, Examples & Best Practices
Market research helps organisations understand a market before making decisions about products, pricing, positioning, expansion or investment. It can answer questions such as who the customer is, how large the opportunity is, which competitors matter, what buyers value, and whether a new idea is commercially realistic.
A market research survey is one primary research method, but market research is broader than surveys alone. It can include interviews, focus groups, observation, customer data analysis, desk research, market analysis, paid market research panels, competitor analysis and syndicated market research reports from firms such as Grand View Research, NIQ, Kantar, Ipsos or Euromonitor.
Marketing research in marketing usually focuses on customer behaviour, brand perception, campaign effectiveness and product-market fit. A market analysis is often more commercial, covering market size, growth, segments, competitors, regulation and routes to market. Good research connects both views so teams can make decisions with evidence rather than assumptions.
From Customer Insight to Market Evidence
Modern market research is rooted in marketing, statistics and social research. Kotler and Keller (2016) describe marketing research as the systematic design, collection, analysis and reporting of data relevant to a marketing situation. Malhotra (2019) gives a similar applied definition, placing research design, sampling, measurement and analysis at the centre of marketing decision-making. Porter (1980) added a strategic lens by showing how competitor analysis, substitutes, buyers, suppliers and new entrants shape industry attractiveness.
A simple market sizing formula is: estimated market value = number of target customers multiplied by average annual spend per customer. For example, if a founder estimates 80,000 reachable UK customers and average annual spend of £120, the serviceable opportunity is 80,000 multiplied by £120, which equals £9.6 million per year.
The market research sector is itself large. ESOMAR reported in 2024 that the global insights industry grew by 8% in 2023, from almost US$130 billion to US$142 billion. Research World, ESOMAR’s publishing platform, reported in 2024 that the market research sector accounted for US$54 billion of that global insights industry, while research software accounted for US$56 billion. Grand View Research estimated the global insights-as-a-service market at US$5.82 billion in 2024, with a projected US$18.85 billion by 2030.
The main strength of market research is decision discipline. It reduces uncertainty before spend is committed. The weakness is false confidence. Poor sampling, leading questions, outdated reports or weak competitor analysis can make a market look clearer than it is. Kahneman (2011) warned that decision-makers often overweight coherent stories, even when the evidence is incomplete.
How to Run Market Research
A practical market research process starts with the decision, not the method. A founder researching a new business should first define whether the decision is about market size, customer pain, pricing, positioning, competitor differentiation or launch priority. The research design then follows.
For market sizing, the basic formula is: market size = number of potential buyers multiplied by average spend in a defined period. A top-down approach starts with existing market research reports or industry data, then narrows the estimate to the target segment. A bottom-up approach starts with reachable customers, conversion assumptions and expected spend. Bottom-up sizing is usually more useful for early-stage businesses because it forces assumptions into the open.
For customer understanding, a market survey can measure awareness, needs, current alternatives, purchase drivers, willingness to pay and concept appeal. For example, a B2B software start-up might survey 500 finance leaders and find that 38% have the target pain, 22% have budget authority, and 11% would consider switching tools in the next 12 months. If the reachable market is 40,000 firms, the near-term addressable segment is 40,000 multiplied by 11%, which equals 4,400 firms.
Competitor analysis should sit alongside the survey. It compares positioning, pricing, features, channels, customer reviews and proof points. The best market research combines what customers say, what competitors offer and what the market data shows.
How Market Research Is Used in Practice
A UK meal-prep start-up wants to understand whether to launch a high-protein halal range in Greater London. The team runs a market research survey with 750 adults aged 18 to 40 who buy prepared meals at least twice a month. It also reviews competitor pricing across 18 meal-prep brands and analyses search demand for halal fitness meals.
The survey finds that 46% of respondents are interested in high-protein ready meals, but only 18% rate halal certification as essential. Among Muslim respondents in the sample, that rises to 71%. Competitor analysis shows most brands charge £5.95 to £8.50 per meal, while the strongest halal-specific options have weaker gym and macro-focused positioning. The team chooses a narrower launch: London gym-goers seeking halal, high-protein meals, priced at £6.95 per meal, rather than a broad healthy-eating proposition.
Sources Cited
ESOMAR (2024). Global Market Research 2024. ESOMAR.
Grand View Research (2024). Insights-as-a-Service Market Size, Share and Trends Analysis Report. Grand View Research.
Kahneman, D. (2011). Thinking, Fast and Slow. Farrar, Straus and Giroux.
Kotler, P. and Keller, K. L. (2016). Marketing Management. Pearson.
Malhotra, N. K. (2019). Marketing Research: An Applied Orientation. Pearson.
Porter, M. E. (1980). Competitive Strategy: Techniques for Analysing Industries and Competitors. Free Press.
Research World (2024). “Drivers of Our US$142bn Insights Industry.” ESOMAR Research World.
Frequently Asked Questions
Market research is the process of gathering and analysing information about a market, customers, competitors and demand. It helps organisations decide whether an opportunity is attractive, who to target, how to position an offer and what risks need testing before launch, investment or expansion.
The main market research methodologies are primary research and secondary research. Primary research includes surveys, interviews, focus groups, observation and experiments. Secondary research uses existing data, such as market research reports, government statistics, competitor websites, industry publications, customer reviews and financial filings.
Market research and marketing research overlap, but they are not identical. Market research usually studies the market itself, including size, demand, competitors, segments and growth. Marketing research is broader inside the marketing function and can include brand tracking, advertising tests, pricing, customer satisfaction and campaign performance.
A market research survey is a structured questionnaire used to collect data from a target audience. It can measure needs, behaviours, awareness, purchase intent, pricing expectations, brand perception or concept appeal. Survey quality depends on sampling, question wording, response options and whether the results connect to a real decision.
To do market research for a new business, start by defining the customer, the problem and the buying situation. Then estimate market size, map competitors, speak to potential customers and run a focused survey. The goal is to test whether the problem is painful, reachable, valuable and not already solved well by alternatives.
Competitor analysis compares the businesses, products or substitutes that customers could choose instead. It usually reviews pricing, positioning, features, channels, reviews, strengths, weaknesses and target segments. A good competitors analysis does not only list rivals. It explains where the market is crowded and where a new offer could be different.
Market research reports are used to understand market size, growth rates, trends, segments, competitors and forecasts. They are often produced by market research firms and industry analysts. Reports are useful for context, but they should be checked against primary customer evidence because published figures may be broad, dated or based on assumptions.
Paid market research usually means respondents are compensated for taking part in surveys, interviews, panels or product tests. It can improve recruitment speed, especially for niche audiences. Payment does not automatically reduce quality, but researchers must screen carefully, remove poor responses and avoid incentives that attract the wrong participants.