Markets are any type of system or institution where individuals are able to sell goods that they produce and buy products that they need. It can be used referring to a micro setting, like a marketplace or store.
It can also be used to describe the macroeconomic system of the exchange of supply and demand between producers and consumers. It is one of the basic components of business and economics.
In modern day trade, goods and services are bought and sold through the exchange of some kind of monetary system. Things can be bought or sold for money.
In smaller civilizations and cultures, bartering is an appropriate way to obtain needed products. This is the system of trading items that one may already have for another item that they need or desire.
In the United States, Americans purchase goods through the use of the dollar. Markets provide the medium for them to do so.
One vital aspect of this system is competition. In other words, there must be a way for individuals to decide between two stores, sellers, or products.
There may be one that is more appealing, cheaper, or better than the other. When the majority of consumers choose this item, it urges the other competitors to better their products or lower their prices, creating a sense of competition between the different producers.
In fact, this is what makes a market essentially different from a trade or bartering type of system. Market research is performed when economists or those interested study the types of effects that different aspects have on this system.
It studies the social and economic opinions of the buyers and decides what they are drawn to and how they can be persuaded to spend more of their money or change their purchases.
It aids in making decisions.
This system was first introduced and started being applied during the 1920's in America. The introduction of radio was what brought it about.
Because most Americans got their entertainment from radio programs, it was realized that these individuals could be reached and persuaded to purchase products through this type of media.
Radio ads began during this period, and completely changed the way that buyers got their information about products and companies. Advertisers also began to realize the importance of demographics.
Demographics are the types of individuals that settle in a certain area or purchase a specific type of products. Included in this category are subcategories like gender, age, income, and ethnicity.
It is a proven fact that certain "types" of individuals are more likely to buy specific products. A person's age, background, income level, ethnicity, or part of a country or city that they originated from all are a determining factor when it comes to the products that they are interested in and are likely to buy.
Market research is used specifically to determine these factors. Through the use of interviewing and studies, people can determine the types of individuals that are more likely to buy their product.
They can also learn new ways to change the advertising for that good and what it's demographic prefers. Other instruments or methods to obtaining this information include focus group discussions, questionnaires, and surveys.
Sociological factors often come into play when it comes to research. Sociologists gather demographical information which is then used to determine the market and how the people of an area and be advertised to.
This is evident in television programs today. The next time you are watching a program on television or listening to a radio station, pay attention to the types of ads that are shown or presented.
When it comes to early morning programs or children's channels, you may see a great deal of ads for toys, diapers, and baby food. This is because the demographic of people that are watching programs at this time of day are female, most likely mothers, and children that are not of school age yet.
Commercials that are shown around three or four o'clock in the afternoon may be for movies, toys, or food products, because school age children will have just come home and are viewing television.
Market research strategy is a very intense and well-studied process. It is the way by which we learn and understand the goods and services that are provided and advertised to us.