What is marketing analysis?
A market analysis is the assessment and identification of the quantitative, qualitative ,that is, the internal factors of a market. Market analysis includes identifying long term business goals. The evaluation of the size of the market both in volume and value and identifying the growth shift, elucidating the various target customer segments and buying patterns, getting a thorough look at the competitive aspect of the market are all the key cognizance achieved from market analysis.
Market analysis is not just making a plan but creating a smarter strategy for the business growth and scaling profits. The in-depth knowledge of the market enables the companies to stay well informed on the latest trends, the customer’s buying pattern, all that helps in developing services that would attract more audience. A substantial market analysis helps in creation of successful products that would cater to the needs of the consumer.
Why do companies need market analysis?
1)Understanding its customers:- It helps in creating a comprehensive profile of the ideal customer, their needs , how many of them are there? and describing their demographics. It will help in perceiving the size of the market for your business.
2)Analyzing their competition:- To help analyze the position, strengths and weaknesses of the competitor’s. Examining the new competitors who are gaining strength in the market.
3)Pricing and calculation:- Before the final stage of the product, test the product’s credibility and refrain from directly marketing it. Instead test the product and then market analysis will help in planning the most suitable strategy to market the product. This calculation will help in understanding what area of the market you will get and your position in the business world.
4)Better marketing and business strategies:- It will help in understanding the flaws and attaining the opportunities within your position and gaining the consumer’s attention. Also identifying the factors that could impact on your business hence helping in making a realistic plan and wiser plans for better standing in the business world.
Steps of market analysis for foolproof marketing strategy
#1: Defining Business Goals
Different business strategies will be required for different business goals. You must be clear about how your business plan aims to bring solutions to real life problems as well as how it is different from your competitors. Your business plan must have realistic approach, and a certain time frame to attain the objectives. The product or services that you are providing must align with what the consumer desires, and your business strategy should be built while keeping in mind the changing trends, so as to bring profit to the company as well. Market analysis is done to get this clarity in your business plan.
#2:Defining the target market
This is the most important step of your market analysis. Here you specify who your targeted audience or the potential customers of your product or service is.
If there are more than one type of potential buyers then you will have to do market segmentation where you categorize similar types of buyers into segments.
You will have to look into many factors in order to refine your market analysis. Some of the elements are mentioned here:
- Market size
Your market size relates to how many potential customers, people or companies, there are for your product or service. You can read about the different methods to figure out your market size here.
- Location
Will your product or service benefit people from a specific location the most? Will your product attract people of specific community, culture, or belief that are situated at a particular region, state or city? Do factors like temperature, terrain, soil etc. affect your product or service? Location is an important factor that must be taken into account while analyzing the market.
- Psychographics
You will need to get an idea about the mindset of your customers, and understand how they’ll react to your products or services. Analyzing their personality, likes and dislikes regarding existing products, cultural beliefs, can help you make decisions for a better approach.
#3: Identifying The Market Trends
Customer behavior is always changing, and hence the market size. You must regularly be updated about the changing market growth and market trends so that you are able to make timely decisions for your business and marketing strategies accordingly. Some commonly changing trends that need to be analyzed are:
- Trends in Customer Behavior: You must be able to identify the specific trend in changing customer needs and behavior so as to make the necessary changes in your business strategy to be able to fulfil those needs and demands and thus increase your market growth.
- Trends in Industry Cost Drivers: You must keep yourself updated regarding changes in composition of the cost drivers as well as what leads to lower cost alternatives. Analyzing the factors that can lead to lower the product cost, or any alternative that is more economical, or adding any additional feature can help maintain value for product price and thus gain market growth.
- Trends in Evolution of the Industry: As this is the era of innovation and technology, the rapidly changing technology affects all spheres of life and the market is no exception to this. A lot of the traditional products and services are replaced by new innovative technological methods. Thus in order for your company to always be in market, you must analyze the trends regarding product innovation, new operations and service methods.
#4: Getting an In-Depth Look at Competitors
Market is full of competition, to sustain in market information of the market is required but the prime thing is the knowledge of the competitors. The landscape of the market decides the future steps of organization.
Going in depth in analysis for competitive will provide the following:
- Comprehensive outlook of market rate competition as per the customers
- Visualization of competitors -how are they good and bad.
- Empowers the enhancement of competitive strategies
There are various ways of competitive analysis. We are using a crisp and efficient way in systematic approach:-
- Researching
- Identify competitors
- Their overviews
- Funding
- Revenues & customers
2. Finding Competitive Information
- search everywhere
- advertisements
- sales brochures
- newspapers & magazines
- annual reports
- reference books and databases (government and commercial)
3. Analyze the data
- markdown the features on products
- tick down as per requirement and efficiency
- match it with own product
- use market share to analyze
4. Determine Your Own Competitive Position
- discuss key areas of competitive advantage and disadvantage
- make summary and note major problems
- Integrate your analysis of the competition with demographic analysis
#5: Integrate your analysis of the competition with demographic analysis
Knowing your customer powers up the efforts and results are reached easily. The organization help to target customers. We have to look various points:
1.Geographic: city / country, rural / urban etc.
2.Demographic: age, faith, gender , income, socio-economic type, education, size / status of the family.
3.Psychographic: lifestyle, desires, absurdities, beliefs, influencers.
4.Behavioral: stage of the purchase journey, characteristics of brand loyalty, price sensitivity, type of purchase, rate of use.
5.Media: habits of social media / TV / newspapers / search engines.
6.Benefit: service, quality, and other unique standards of customer service.
These things are very helpful to identify customers as they segment the information.
#6: Accounting for Internal and External Factors
Inside the Strengths, list company features that offer you a competitive advantage.
Under Disadvantages, outline features that, relative to your rivals, place you in a weaker position.
The Opportunities box should be loaded with information-driven insights that can be adopted by your company to increase revenue , increase profitability, and grow market share.
Threats contain internal and external elements that can have a detrimental effect on the organization-changers to changing Government regulations.
