Research your market

Market research helps you to understand your customers and their needs, as well as what your competitors are doing.

This understanding can help you to better focus your marketing efforts, make informed decisions about your business and make the most of opportunities. It’s important to make sure market research is part of your ongoing business plan and daily operations.

Read our steps for researching your market to get started.

Your market research should cover your:

• customers
• competitors
• product or services
• suppliers
• business location and local area
• industry and market trends.

There are both primary and secondary methods of research you can use to conduct your market research.

• Primary research involves gathering information yourself first-hand.
• Secondary research uses information and data that has already been collected and analysed by others.

Before you embark on gathering first-hand information about your market, you can use research that has already been done. For example, look for market reports, government statistics, and trade and industry association publications.

Sources of government statistics and data

The Australian Bureau of Statistics (ABS) is Australia's official statistical agency and provides a wide range of economic and social statistics.

Testing your business idea with customers can give you an idea of how successful it might be. You can do this by talking to people about your idea and seeking their feedback on your product or service. This could be through direct contact, surveys, focus groups or social media polls.

You may also consider a test run or pilot test of your product or service with a small number of clients to fine tune your idea. This will help work out if your idea is viable, find any problems, develop a price for your product or service, and see how quickly your business might grow. This may help you identify where your products or services fit in the market and how they differ from your competitors.

You can also work out your product or service's:

• positioning – whether your products or services are high-end, competitive or a low-cost alternative to the products or services offered by your competitors. Read more on positioning your business.
• anticipated demand – the amount of products or services your customers are likely to purchase from you. For example, how much will an individual customer buy in 6 months or 12 months?

Ways to collect customer data include emails, online surveys, interviews, and even talking directly to your customers.

You can discover:

• what their needs are
• what they're willing to pay for different products
• the anticipated demand for your products.

Finding out how your customers think and behave (including their likes and dislikes) can also help you better target your marketing activities.

Using existing customer data

If you've been in business for a while, you may already have the tools and information on customers to use in your research. Check your:

• customer relationship management (CRM) database
• customer loyalty or reward program information
• point of sale (POS) system and sales records
• inventory management system
• records of customer complaints, feedback or suggestions
• reports on customer service benchmarks and targets
• website statistics and traffic.

You can collect data on your competitors through:

• observing their advertisements and sales
• observing businesses in your industry and area through trade magazines, general advertising or site visits
• networking
• the internet, including websites, blogs and other social media.

You can use this competitor data in your strengths, weaknesses, opportunities, threats (SWOT) analysis when you develop your marketing plan.

Analysing your competitors can also help you understand where your business or products fit in the marketplace.

Questions to ask when researching your competitors

Consider the following:

• Who are your competitors?
• What do they offer their customers?
• Where are they located?
• What marketing strategies do they use?
• How do they communicate with their customers?
• Do they have an online or social media presence?

If you're looking to export your products and services outside of Australia, it's important to also conduct research on overseas markets to find the ones that your business will likely succeed in.