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SOURCE TYPE: MARKET RESEARCH REPORT
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WHAT IT IS
A report analyzing:
Customer demand
Industry trends
Market size
Consumer behavior
Competitors
Growth opportunities
Market segments
Purpose is usually to:
Understand market conditions
Identify opportunities
Estimate future demand
Evaluate competition
Support strategic decisions
Mental Tag:
TREND + OPPORTUNITY
Always remember:
Market Research Reports usually answer:
What is happening in the market?
What customers want?
Where opportunity exists?
They often become the foundation for recommendations in other tabs.
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WHY GMAT USES MARKET RESEARCH REPORTS
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To introduce:
Consumer demand
Growth trends
Customer preferences
Market opportunities
Competitive conditions
Industry changes
Future growth potential
Market Research is often the bridge between:
Consumer behavior
and
Business decisions
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HOW MARKET RESEARCH REPORTS ARE TYPICALLY DRAFTED
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Pattern 1
Market Trend
Supporting Data
Business Implication
Most common.
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Example
Demand for electric vehicles increased.
Market share expanded.
Manufacturers increased production.
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Pattern 2
Customer Preference
Market Trend
Opportunity
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Example
Consumers prefer online shopping.
Mobile purchases increasing.
Digital investment recommended.
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Pattern 3
Industry Analysis
Competitor Analysis
Market Opportunity
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Pattern 4
Segment Analysis
Growth Comparison
Recommendation
Very common.
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THE MASTER MARKET RESEARCH STRUCTURE
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Market Condition
↓
Customer Behavior
↓
Trend
↓
Opportunity
↓
Business Implication
Most reports follow this structure.
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WHAT THE PASSAGE USUALLY LOOKS LIKE
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Example 1
Demand for plant-based food products has increased significantly during the past five years. Younger consumers demonstrate particularly strong adoption rates. Industry analysts expect continued expansion in this segment.
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Example 2
Online retail spending continues to outpace growth in traditional retail channels. Consumers increasingly value convenience and rapid delivery services. Companies investing in digital platforms have experienced stronger revenue growth.
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Example 3
The premium fitness market has expanded rapidly among urban professionals. Surveys suggest customers are willing to pay higher prices for personalized services. Several competitors have entered the market in response.
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WHAT INFORMATION APPEARS
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Market size
Growth rates
Demand trends
Consumer preferences
Customer behavior
Market segments
Competitor analysis
Industry outlook
Adoption rates
Market share
Opportunities
Threats
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WHAT INFORMATION RARELY APPEARS
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Detailed financial statements
Experimental methodology
Policy requirements
Formal eligibility criteria
Those usually appear elsewhere.
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FIRST 5-SECOND SCAN
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Question 1
What market is being discussed?
Question 2
What trend exists?
Question 3
What customers want?
Question 4
What opportunity exists?
Question 5
What risk exists?
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MOST IMPORTANT SENTENCES
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Usually:
Demand increased...
Consumers prefer...
Market share grew...
Industry analysts expect...
This segment is projected...
These sentences usually contain the core insight.
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WHAT TO EXTRACT FIRST
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Market
Trend
Customer preference
Opportunity
Risk
Nothing else initially.
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WHAT TO IGNORE
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Industry history
Company anecdotes
Minor examples
Background narrative
Focus on:
Demand
Growth
Customer behavior
Competition
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COMMON QUESTION TYPES
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Recommendation
Prediction
Comparison
Inference
Integration
Market Selection
Opportunity Evaluation
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HIDDEN CR CONCEPTS
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Trend Analysis
Forecasting
Cause and Effect
Consumer Behavior
Opportunity Cost
Competitive Advantage
Decision Making
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CROSS-TAB RELATIONSHIPS
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Market Research + Recommendation
Market identifies opportunity.
Recommendation proposes action.
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Market Research + Survey
Survey measures preferences.
Market Research interprets market implications.
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Market Research + Financial Statement
Market opportunity exists.
Financials determine ability to exploit opportunity.
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Market Research + Analyst Report
Market trends support forecast.
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Market Research + Industry Comparison
Market trend exists.
Industry comparison identifies strongest competitor.
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RED FLAG WORDS
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demand
market share
consumer
segment
industry
growth
adoption
preference
trend
competition
opportunity
expansion
projected
expected
emerging
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CONCEPT KNOWLEDGE
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MARKET
Group of buyers and sellers.
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DEMAND
Quantity customers want.
Higher demand generally supports growth.
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SUPPLY
Quantity sellers provide.
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MARKET SHARE
Percentage of market controlled.
Example:
Industry sales = 100M
Company sales = 20M
Market share = 20%
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SEGMENT
Subgroup within market.
Example:
Luxury travelers
Budget travelers
Business travelers
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ADOPTION
Rate at which customers begin using product.
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SATURATION
Market becomes crowded.
Growth often slows.
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COMPETITIVE ADVANTAGE
Feature making company stronger than competitors.
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BARRIER TO ENTRY
Obstacle preventing competitors from entering market.
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THE MOST IMPORTANT MARKET RESEARCH CONCEPT
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DEMAND ≠ SALES
Example
Customers want product.
Demand exists.
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Does company automatically generate sales?
No.
Need:
Distribution
Pricing
Marketing
Execution
Huge GMAT distinction.
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SECOND MOST IMPORTANT CONCEPT
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TREND ≠ GUARANTEE
Example
Market grew for 5 years.
Does this guarantee growth next year?
No.
Very common GMAT trap.
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THIRD MOST IMPORTANT CONCEPT
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MARKET GROWTH ≠ COMPANY SUCCESS
Example
Industry growing rapidly.
One company still performs poorly.
Possible?
Absolutely.
Many students confuse industry performance with company performance.
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FOURTH MOST IMPORTANT CONCEPT
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MARKET SHARE ≠ MARKET SIZE
Example
Market doubles.
Company share falls.
Company revenue may still increase.
Very common GMAT setup.
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FIFTH MOST IMPORTANT CONCEPT
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CUSTOMER PREFERENCE ≠ CUSTOMER PURCHASE
Example
Survey:
Consumers prefer eco-friendly products.
Actual purchases:
Cheaper alternatives dominate.
Preference and behavior differ.
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THE BIGGEST TRAP
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Students assume:
Growing market
=
Good investment
Wrong.
Need evaluate:
Competition
Costs
Risks
Capabilities
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SECOND BIGGEST TRAP
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Ignoring competition.
Large opportunity often attracts competitors.
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THIRD BIGGEST TRAP
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Confusing market share with revenue.
Company may gain share while revenue falls.
Or lose share while revenue rises.
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FOURTH BIGGEST TRAP
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Assuming customer preference guarantees demand.
Stated preferences and actual purchases differ.
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FIFTH BIGGEST TRAP
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Ignoring market maturity.
Emerging markets behave differently than saturated markets.
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HOW 705+ QUESTIONS USE MARKET RESEARCH REPORTS
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Version 1
Market attractive.
Competition intense.
Need balance opportunity vs risk.
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Version 2
Consumer demand increasing.
Company lacks resources.
Need integrate with financial data.
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Version 3
Several market segments.
Need identify best target segment.
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Version 4
Survey shows preference.
Sales data shows different behavior.
Need reconcile.
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Version 5
Market growth positive.
Company profitability weak.
Need determine whether expansion remains justified.
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MOST COMMON PASSAGE TEMPLATE
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Market trend identified.
Customer behavior discussed.
Growth opportunity presented.
Business implication suggested.
This structure appears repeatedly in MSR.
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THE MASTER MARKET ANALYSIS CHECKLIST
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What market?
What trend?
What customers want?
What competition exists?
What opportunity exists?
What risk exists?
Can company actually exploit opportunity?
Run through this checklist every time.
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THE MASTER MARKET SELECTION FRAMEWORK
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When evaluating markets:
Demand
Growth
Competition
Risk
Cost
Profitability
Fit with objectives
Do not evaluate only one factor.
Evaluate all.
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99TH PERCENTILE RULE
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Never read a market research report asking:
What does every sentence mean?
Read asking:
What market is being discussed?
What trend exists?
What do customers want?
What opportunity exists?
What risks or constraints exist?
If you can answer those five questions, you have extracted almost everything GMAT usually wants from a Market Research Report source.