Each year companies spend millions of dollars understanding their customers’ likes and dislikes. Increasing complexity has been accompanied by the development of sophisticated tools to enable marketers decipher their markets. Consumer research is invaluable for businesses seeking to stay ahead of the game.

Today's educated customers demand high-quality goods and services. It has traditionally been the role of consumer research to identify how consumers think and deconstruct their decision making process.

One of the formal definitions of consumer research says that it is "The study of individuals, groups, or organizations and the processes they use to select, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society."

Consumer research can have a far reaching impact on your marketing strategy, since it seeks to analyze issues such as:

Consumer Decision-making: Any purchase is made to satisfy human needs and wants. Decision making depends upon the degree to which product performance meets customer expectations. Involvement and habits play an important role in the decision making process. Involvement refers to the personal importance of the purchase – does it merely have functional value or is there a high emotional quotient involved? Alternatively, many decisions can be based on habit. Consumer research plays a vital role in understanding the internal and external factors that influence the act of purchasing.

Consumer Information Processing: Generally, there are four stages to the way in which a consumer processes information. 1) understanding the features of a particular product or service 2) storing this information in memory 3) forming an attitude towards the product or service in question 4) making inferences prior to decision-making.

Values and lifestyle: Values provide the motivation for purchase and lay the foundation of consumer lifestyles. They are usually influenced by culture, family, media, etc. and differ from person to person. Consumer research tries to understand how consumers use products and services to attain their cherished values. From a marketing point of view it is important to know how consumers are influenced by their environment and address differences accordingly.

Understanding consumer lifestyle can also open up avenues for the development of new products or services. Small wonder, that consumer research is at the heart of any new product development. It finds wide application in exploring, testing, validating product design, development of new products and improvement of existing ones.

There are two ways of conducting consumer research:

1. Primary Research, where information is gathered directly from consumers. This is again classified into two categories a) quantitative research like surveys, tracking, experiments etc. and b) qualitative research like face to face interviews, focus groups, observational research etc. 2. Secondary Research, where published information is accessed from other sources such as research reports, consulting firms, magazines, online media and others.

The choice of consumer research depends on a range of issues such as product category, research objectives, and of course, budget. Sites like TradePort which offer a tutorial on how to conduct and use market research can provide greater clarity. So could books such as "Know Your Customer", "Consumer Behavior" and "Acknowledging Consumption" .