Market Research

What do you know for sure about your consumers, your customers and your competitors?

Every business owner should know:

  • your consumer demographics – that is, who your consumers are, their ages, gender, average income and typical purchasing behaviour
  • where your product fits into the current market situation
  • who your competitors are and what they offer
  • the wants and needs of your target market or markets

This type of research is commonly called market research. It is one component in the process of compiling your market intelligence.

The research you need to do will vary according to where your product is in its life cycle; whether it is new to the market or has been established for some time. Many businesses assume they know all about their target consumer but only by doing the research will prove whether your assumptions are right or wrong. A wrong assumption can be very costly indeed so it pays to do your research and to update your research regularly.

If you are just starting out, you will want to find out:

  • if there is another product or service that meets the needs of the particular market you are targeting
    or
  • if there are enough people who will actually buy your product.

You might like to visit local farmer’s markets to see what products are available there. Farmers markets are a great way to talk with consumers about products.

If your business or product is well-established already you may be looking at increasing your product range, expanding your distribution, or raising your price. You will need to update your research to be certain the market will absorb a price increase or that there is a gap in the market for the new product you have in mind.

How do I research my market?

There are two approaches to gathering your market research and both are important to developing a full picture of the market to help you develop your product and marketing plans. They are known as primary and secondary market research.

Primary market research

Primary market research involves gathering information first hand, such as through interviews, surveys and discussions. This form of research collects actual, detailed and specific data that directly answers your questions about your market and product, for example when you undertake or commission your own survey. It is called primary research because this information-gathering process has not been undertaken before.

Your primary research will be tailored to be specific to your product or service and market and the questions to which you want answers. You will need to undertake this research by connecting with your (potential) customers and consumers directly. It may involve:

  • field studies (e.g. handing out samples of food and getting feedback)
  • qualitative research (e.g. focus group)
  • quantitative research (e.g. telephone, in person or online survey)

Primary research can be, and mostly should be, rigorously designed and executed to ensure you get the information you need. It is important to design surveys and questionnaires to achieve this, as if the questions are not well-designed, the answers may send you in the wrong direction. However, informal surveys and anecdotal feedback are also useful to product development and the advent of social media resources such as Facebook now allow real-time consumer interaction that can be harnessed to ask questions of your loyal (potential) consumers as well, as long as you remember the respondents to your question will already largely be fans of your products or brand and so not necessarily representative of a whole population.

Secondary market research

There is a mass of market information available that can help you understand consumers and customers at a more general level or gain an insight into a local population, such as that of a limited geographical region or profession. Secondary market research is the process of gathering this information from credible and reliable sources to gain an idea of the general market or audience, for example industry and demographic information drawn from the Australian census by the Australian Bureau of Statistics. This research is known as secondary research because you are tapping into already research done by others.

Much of this information is freely available online, while more detailed and sophisticated market analysis and industry information can be purchased from research companies. This information tends to be more general and won’t necessarily answer specific product related questions. However it is a good place to start to get an overview and to help you define the gaps in your knowledge that you may need to fill by doing primary market research.  Secondary market research typically includes:

  • internal – information that you have already within your own business  such as sales data
  • external – sources that provide you with general information , for example the size of the market,  consumer and population demographics, major competitors and government regulations

It is important to check the source of market information and, if possible, to examine the methods used and the size of the sample (that is, the number of people involved) in any research. Some research reports can emphasise only results that are favourable to the organisation funding the research and some studies are too small to be statistically reliable, so it is wise to get expert advice when analysing the research you find to make sure the conclusions you draw from it can be relied upon in your business planning.

Frequently used sources of secondary research include:

  • information from trade/business associations and journals
  • government studies (check government department websites for lists of publications and other resources and see the list below for more information)
  • resources on the internet (always check the source and sample used)
  • data from industry experts

Who can help?

The Innova Database

Innova’s Food and Beverage database monitors category and sector activity worldwide and explores trends. It is designed to be an online new product development tracking tool, using a network of international field researchers to report on new food and drinks launches from around the world and providing in-depth analysis as well as customised research services. A range of Innova Market Insights are regularly provided to Food SA for the industry and provide product analysis and insight into emerging opportunities.

SARDI

SARDI can provide independent and unbiased evaluation of products and processes to service the food, wine and other beverage industries.  The testing of the sensory impact of products, assisting with product development and food technology issues such as packaging and branding which can lead a quality and consumer appealing product while minimising business risks.

  • Trade publications
  • Magazines and journals
  • Retail World
  • Hospitality Magazine
  • Foodservice Magazine

Global market research

Obtain information on market research via survey from this US-based collection of international research reports.

Making your mark

The Federal Department of Agriculture, Fisheries and Forestry (DAFF) website highlights the strong tradition Australian businesses have of being innovative and adaptive to new challenges.

The library network

Public libraries and the State Library are open to all and offer expert research assistance, usually free of charge. You can access their catalogues and a range of databases online. The university libraries also offer membership to the general public, and through any of these libraries you can obtain print resources and access a huge range of specialist databases. Reference librarians are experienced too in helping you analyse and evaluate the sources of the information you gather. There are also many ‘special’ libraries located in government departments who may offer access to resources either directly to members of the public or via a request at your local library.

Want more information?

Getting started with questionnaire design for primary research:

Secondary research resources:

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