I was wondering if foundries do some kind of market research before selling/producing a typeface. If yes how is this done usually?

e.g. if a foundry releases an Art Deco revival font, do they they have a substantiated reason to believe that there is a market for this and that it will sell? Is there a "persona" that the foundry has defined to which they think they will sell this to? Since fonts are a software product I am wondering how similar the development process is to other software products.

I am not aware of market research like that. Maybe you could ask some of the biggest foundries directly?
In general, market research might be necessary because of the huge upfront costs to develop the products, set up production lines, create the packaging and so on. But digital products like fonts only cost the designer’s time. So, we have much more freedom in that regard and can just rely on previous sales to estimate earnings. And we can even create fonts just because we want to, knowing they probably won’t sell well. The time spent can be covered by the sales of other font families. 

Thanks for the response. I will try to reach out to them.

Well, time is a very precious good 🙂 and to create a typeface hundreds of hours are required. So the opportunity cost is really high if someone creates something that doesn't sell or that doesn't attract traffic/attention (similar to catwalk fashion or concept cars). So I was interested in how different people handle this. As you mentioned making experience based decisions is definitely a valid approach, but maybe there are also other approaches.