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Market research: A key step

Market research entails collecting detailed information about your customers, competition and market. The process involves gathering, sorting and analyzing data. You can then use this information to formulate your marketing plan and strategies.

Market research entails collecting clear, detailed information a business critically needs about its customers (or future customers), competition and market. The process involves collecting, sorting and analyzing key information from a variety of sources. This information is then used to formulate a marketing plan and strategies. It is a qualitative and quantitative study of the environment in which the business operates or will operate.

When should market research be done?

Market research should be done throughout the business development process:

  • Before start-up, it paints a picture of the environment in which your business will operate and confirms that there is a market for your product or service. It helps you set your objectives and determine your marketing strategies.
  • During start-up, it's a monitoring tool that can be used to measure the effectiveness of your advertising campaign, determine whether your product or service is priced correctly, predict your market share and better understand your competition.
  • After start-up, it is used to measure business's name recognition, customer loyalty, brand image, etc.

Market research should answer 4 questions

  • Is there a large enough market for your product?
  • Who is your target audience?
  • Who is your target market competition?
  • What is your business's potential market share?

Is there a large enough market for your product?

Your business operates in a global environment that brings both opportunities and threats. You need to know what your business depends on and what could affect its development in the long run—all things that are beyond your control.

Examine the political, economic, sociological, technological, legal and environmental considerations that could influence your decisions (PESTLE analysis). Look only at those that affect your business.

Who is your target audience?

Analyze your target market and potential customers. Who are they? What are their buying habits? What products and services do they use? How satisfied are they? Do they need your product?

  • Who are your potential customers? Find out their age, income, status and other relevant information. Can you group them by market segment?
  • Why does your product meet their needs? How high do they prioritize this need? How does your product deliver more value to your target audience than the competition does?
  • Where are they? Are they concentrated in any particular place? Do they belong to any professional or recreational groups? Do these customers prefer to shop at speciality boutiques, shopping centres, online stores or events (trade shows, seminars, conventions, expos, etc.)?
  • When do these customers buy your type of product?
  • How do they prefer to get your type of product? How often do they purchase this product or service? What is a bigger concern for them: price, quality, reliability, reputation, delivery speed, look, etc.?
  • How much are they willing to pay for your type of product? What share of their budget do they spend on this need?

If your potential customer is a business, study its sector, specific needs, current supply sources and satisfaction and get the purchasing manager's contact information.

Customers must always be your top concern. Their needs inform your offer, and their buying habits and preferences will inform many of your strategies, including your marketing strategy. The more you know about your potential customers, the better you'll be able to find strategies to publicize your business and provide a service or product tailored to their needs.

Who is your target market competition?

Believing that your product is unique is a common pitfall. Start analyzing the competition by asking yourself how your potential customers meet their needs. That means doing things like visiting stores, trying out products, writing reports about the competition and meeting with suppliers. This is how any competitive analysis begins.

If other businesses offer the same products and services to meet the same needs, they are direct competitors that you need to know inside and out. You need to analyze their pricing, advertising, promotion, distribution, after-sales service and other strategies. You'll also find indirect competition in your market, i.e., businesses that offer different products or services that meet the same needs. Don't forget about them.

A competitor's competitive advantage encompasses everything from its strengths and the main reason for its market success to what it does better than others and what makes it more competitive.

Determine what competitive advantage will set you apart.

  • Who are your direct and indirect competitors? What are their characteristics? What are their sales? How many employees do they have?
  • Where are they located? What territory do they cover? Who is their target audience?
  • What products and services do they offer? What are their prices and terms of sale? Who are their core customers? Why are their customers satisfied or dissatisfied with their products?
  • How do they meet their customers' needs? How do they operate? How do they reach their customers? What is their promotion strategy? How is their customer service? What is their market reputation? What are their strengths and weaknesses?
  • Which competitor would you most want to be like? What is the gist of its marketing plan? What about its operations?

What is your business's potential market share?

Predict your market share as follows:

  1. Estimate the size of the current market (sales in dollars).
  2. Determine your sales target based on your prices and constraints (sales in dollars).
  3. Set your market share goals: (Step 2 ÷ Step 1) x 100.
  4. This is your market share expressed as a percentage.

Once your market research is complete, you will have all the information you need to start envisioning your approach and the steps you must take to gain sustainable market share, i.e., to position your business. You'll then be able to write your marketing plan and plan the human, physical and financial resources you will need to run your business.

To learn more, see the Desjardins interactive marketing plan.

Need a hand with your market research? For a detailed explanation of each step of the business start-up process, see the Desjardins interactive business plan.


  1. Antonio Drouin(in French only) (1 min 25 s)
  2. Anne-Marie Chagnon(in French only) (2 min 18 s)
  3. François Mainguy (in French only) (1 min 42 s)