The purpose is to identify what the public wants and if any other companies have similar products that you are going to make, if so then to gather the information to help you to find out other ways to make it better than the existing products.
The methods used to collect this information is surveys, focus groups, personal interviews, observation and field trials, sometimes you can use one of the methods but it is safer to use a couple more. Another way to help with getting all the information you need is to get a larger group of people to complete the task you are giving them.
There is different sources of information that is collected for market research. such as secondary data that is information all ready collected in reports, statistics and anything that can be found on the internet. This is used to get a better understanding of the target audience.