What is market research?
Analysing supply markets for purchasing is a technique used to identify market characteristics for specific goods or services and provides information that assists in planning the purchase. It enables you to understand:
- how the market works;
- the direction in which a market is heading;
- the competitiveness of a market;
- potential suppliers;
- existing goods or services that may satisfy the requirement;
- anticipated costs and timeframes; and
- lessons learnt from other users of similar goods or services.
Why undertake market research?
Thorough analysis of the market may assist to:
Help define requirements (the specification) and strategies
Planning and analysis is particularly important when developing complex requirements. The accuracy and detail of the specification is likely to improve as you collect and analyse information. A poor description of requirements may mean that the product or service is not delivered as required. Undertaking market research will assist you to:
- determine your needs;
- determine the level of performance required or the functions to be performed; and
- consider all the benefits of all solutions.
Tip - Browse the Current Tenders and Contracts Awarded sections for similar tenders on the Tenders website. Speak to other agencies and review your own agency's history in relation to the required goods and/or services.
Achieve value for money
Undertaking market research will assist in achieving value for money through:
- the identification of comparable substitute goods and services;
- the identification of alternative processes, such as leasing rather than purchasing;
- developing an understanding of how suppliers determine their pricing strategies; and
- identifying how competitive the market is.
Tip - Try talking directly to potential suppliers.
Understanding the market can assist in minimising risks by:
- assisting to construct specifications that promote competitive offers;
- identifying any legislation or standards to which the goods or services must conform;
- identifying how to encourage innovative solutions; and
- developing an understanding or identifying similar goods or services that may be able to be purchased through more competitive or less risky markets.
Tip - Search the Tenders website for similar tenders and use previous experiences to identify possible risks.
Progress Government priorities
It may be possible to progress Government purchasing priorities or policies by undertaking market research to identify opportunities for:
- the local supply of goods and services;
- local supplier development;
- industry development; and
- encouraging small to medium enterprises.
Tip - Try browsing the Yellow Pages.