Market analysis is very essential for every business, which is a complete analysis of a specific industry market. This analysis has many benefits, including better decisions for your business and minimizing the risks, and it is a time-consuming process. But, in this article, I will show you 7 steps of how to conduct this analysis for every business. These steps are as follows:
What points should be considered in performing market analysis?
In conducting this analysis, you’ll explore several key factors, which include market size and value, potential customer segments, buying behaviors, competition, and other important elements. To fully understand market analysis, your analysis should have answers to the following questions:
- Who are my prospective customers?
- What are the purchasing behaviors of my customers?
- How big is the market I’m targeting?
- What is the price range my customers are willing to pay for my product?
- Who are my primary competitors?
- What are the powers and flaws of my competitors?
Which benefits does the market analysis give us?
It is beneficial in pinpointing problems in business, which shows us industry-specific market insights and allows us to make proper decisions based on current emerging market trends. It should be performed every year to keep your business updated with the latest market insights.
You should perform a detailed market analysis to perform the right strategy to reach the right audience and briefly analyze your competition. In this way, you will build a more targeted marketing strategy.
There are further benefits, which include:
Risk reduction:
The business risk is reduced because this analysis will give you valuable information on major trends in the market, identifying the main players in your industry and how your business can move toward success. Which will result in making better decisions for your business.
Targeted products or services:
You know what the preferences and needs of your customers are, so you offer your services and products according to your customer’s needs and preferences because of the market research you performed, which makes you move one step ahead of your competitors.
Emerging trends:
By using the right strategy of this analysis, it becomes easier for you to spot the new trends in the market before your competitors spot them, which will increase the financial position of your business.
Revenue projections:
By performing this analysis, which also provides insights about future trends in your industry, you can expect the profit you can make and how to set your budget and future spending according to it.
Evaluation benchmarks:
Without this analysis, it is difficult for your business to succeed because it gives you the KPIs that will help your company perform well against your competitors.
Context for past mistakes:
This analysis can enable you to avoid past mistakes and give you an analysis of which operations affected your sales of products badly and how to overcome them.
Marketing optimization:
By performing marketing analysis regularly, you can get insights into your industry, which will give you information regarding improvement and strategies on how to beat and move forward against your competitors.
Key Takeaway
Based on these benefits, you can consider this analysis beneficial. The regular analysis will give you the latest information on your business.
What are the drawbacks of running a marketing analysis?
The drawbacks of running this analysis are very low compared to its benefits.
- It can be costly for you if you don’t know the marketing concepts. You might end up spending too much on this analysis without realizing the necessary areas of your business on which it is required. But if you are familiar with the marketing concepts, you can lower your costs.
- It is a time-consuming process and you can only perform it on one area of your business to keep the other day-to-day business operations running
- One of the drawbacks of market analysis is that it requires more staff, which can result in hiring an extra employee to conduct this analysis and cost you more. But if you perform it yourself, it will reduce your costs, but, in the meantime, it will consume your time.
- The narrow marketing analysis can result in providing less detail about the needs and preferences of your customers.
Market analysis vs. sentiment analysis vs. conjoint analysis:
Market analysis provides analysis on a large scale, but the conjoint analysis is based on customers’ values, needs, and preferences. Various surveys are conducted for conjoint analysis and these surveys are the backbone of getting customers’ needs, values, and preferences about your products. By knowing this, you can derive sales effectively because you are aware of your customer’s values.
Sentiment analysis is a further step of analyzing your customers than conjoint analysis. It analyzes the emotions and feelings, the likes and dislikes of your customers about your product, and helps you understand the ‘why’ behind your customers’ behavior towards your product.
How to conduct a market analysis
It is not a complex analysis, but it sure takes a lot of time to perform analysis and research, so you should be well prepared beforehand and should have the time available to conduct it.
7 steps to conduct a market analysis are:
1. Determine your purpose
Identify the purpose and why you need to conduct market analysis. Is it to move ahead of your competitors or to get the latest trends and understanding of your business? There can be many reasons. You should identify and determine the cause and purpose and whether the reason is internal or external to perform market analysis effectively.
2. Research the state of the industry
By performing market analysis using facts and figures to back up your research, you can get a clear picture of your industry, covering every piece of your business information, such as size, trends, and future. You can also learn about your competitors’ strengths and weaknesses and what makes your business stand out from the competition.
3. Identify your target customer
Don’t waste your time on people who are not your customers and have no interest in your product because you cannot convert them into customers. Instead, you should identify who your customers are, their likes and dislikes about your products, and what causes them to buy your products and services. After identifying, you should focus your efforts on those customers. Following are some factors of customers that you should focus on and consider:
- Age
- Gender
- Location
- Occupation
- Education
- Needs
- Interests
4. Understand your competition
You should understand your competitors better to move your business towards success by identifying their tasks and performance, the difference between you and them, and what strengths and weaknesses they have in their industry. List and target your main competitors and perform a SWOT analysis. Analyze what they possess that you don’t. Put yourself in the customers’ shoes and identify the reason why the customers choose you over your competitors.
Rank your competitors from high to low and perform regular SWOT analysis on your high competitors.
5. Gather additional data
In market analysis, make sure that the informative data you gather is based on facts and it should be credible. Following are some of the best data resources from which you can gather additional data:
- U.S. Bureau of Labor Statistics
- U.S. Census Bureau
- State and local commerce sites
- Trade journals
- Your own SWOT analysis
- Market surveys or questionnaires
6. Analyze your data
After collecting all the information while conducting market analysis, you should verify and analyze whether the information is accurate and genuine to make it useful for your business. Properly arrange and divide the information into sections according to your business preferences that will help you make the right decisions required for your target market.
The following are the most important elements that your market analysis must have:
- An overview of your industry’s size and growth rate
- Your business’s projected market share percentage
- An industry outlook
- Customer buying trends
- Your forecasted growth
- The price customers are ready to spend on your product or service
7. Put your analysis to work
After this, you should dive into your market analysis and discover the areas where you can make your business successful and effective. Identify your competitors and analyze which strategy you lack against your competitors that you should apply to your business.
Please make sure that the analysis is easily readable if it is also required for external purposes.
Keep your information safe for your next market analysis and perform market analysis every year to always stay ahead of your competitors.
Making market analysis easy
Finally, I would want to say that you can easily conduct a market analysis with the help of this guide for your business. You can also outsource or hire an expert for your analysis if you don’t have enough time. That will play a huge role for your business to succeed and always stay ahead of your competitors.
Please visit this link also
