Contextual Design (CD) is a user-centered design process developed by Hugh Beyer and Karen Holtzblatt. It incorporates ethnographic methods for gathering data relevant to the product, field studies, rationalizing workflows, system and designing human-computer interfaces. In practice, this means that researchers aggregate data from customers in the field where people are living and applying these findings, into a final product.

Source:

http://en.wikipedia.org/wiki/Contextual_design

Beyer, H. & Holtzblatt, K. (1998). Contextual Design: Defining Customer-Centered Systems. San Francisco: Morgan Kaufmann. ISBN: 1-55860-411-1