How to Conduct a Market Analysis for Your Business
Can a clock with missing hands still tell time accurately? The obvious answer is no and companies that lack crucial parts are comparable in terms of efficiency. More often than not, marketing is the area where many fail to fill in all of the blanks. To prevent or stop this from happening to your business, a little thing called a marketing analysis can come into play. As easy as it is to say that, the execution is often far more difficult. So what’s left to do? For starters, you can read on and learn how to best conduct your own marketing analysis. Doing so will make anything you want to come up with—be it strategy or business plans—that much easier to develop. With that said, let’s proceed with the first part of this interesting topic.
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How to Conduct a Market Analysis for Your Business
The Methodological Process of Market Analysis
Every business has specific target markets. It’s because of them that a market analysis needs strict methodological processes. To look at data—both tangible and intangible—is necessary for your present and future plans. Start things off by gathering or collecting relevant data. You can do so through the distribution of surveys, the conducting of interviews, and other fact-finding methods. Once you’ve attained what you need, consider each of the factors that affect consumer attitudes. From there, have your planners come up with approaches to lessen the impact of changes in the market while strengthening the plans of your company. In knowing the methodology, your steps, structure, and purpose will become better defined.
Examining the Structures and Purpose
Speaking of structure and purpose, both are needed before you can get from point A to point B. With both already identified, a myriad of benefits become open to you. First, a proper purpose acknowledges your marketing’s areas of improvement. Second, a solid structure allows for the polishing of your procedures for even greater perks. Below is an example of a standard structure that enterprises can use when writing their market analysis.
Market analysis often starts with customer demographics. This part includes the varying descriptions of the target audience. Do note that it only summarizes the details of the target market and it does not talk about audiences individually. Most demographics have categorizations to make analyzing data quicker. The most common categories are buying habits, income bracket, age, location, and sometimes the historical background of the area. The market size also plays a relevant role in customer demographics as it provides an overview of possible customers. With the data in hand, the planners can see the purchasing capacity of the target market and how it can affect the business in the long run
Impression of Clients
Unlike demographics, this section discusses the perception of the audience in relation to products, goods, or services given by the business. The data contributes to the interpretation of the company to consumer attitude, whether it is positive or negative. Furthermore, it addresses how clients respond to brand recognition. While focusing on audience reception, it is also about how the target market accepts the products coming from the enterprise. The part accompanies the demographics by providing sufficient data for marketing analysts.
Market Trends and Projections
Besides the audience, the market analysis also concentrates on the marketing trends that will negatively or positively affect the business. The changes and developments in the market change regularly. The popular style today may be the thing of the past next month. Or the favorite trends of young people revert to the older versions of the current trends. With that, companies have to look at the present trends and formulate an analysis from the numbers. The tendencies of change have effects on the enterprise. Market projections focus on combining all the information from the previous sections to provide forecasts that measure the success rate of the company. The projections keep the attention of the enterprise on relevant matters that could be detrimental to the business if left unsolved. It identifies critical points and shows proposals that assist the firm.
The Competitors in Business
Another essential segment for marketing analysis is about the competitors of the enterprise. Included in this portion are descriptions of the competition and perceptions of the audiences to their advertisements and goods. Through competitive analysis, the company can pinpoint the areas that are similar and distinct from rival businesses. The results also influence the tactics that the enterprise will undertake to be above competitors. There will be a tally on the individual strengths and weaknesses of the rivals according to their stature. Most on the list are companies that prove to be the biggest rivals in the industry.
Creating a Market Analysis in Six Steps
Ultimately, market analysis enables businesses to move forward without hints of doubt and uncertainties. With this tool, enterprises can cease the distribution of resources in inappropriate parts of the company and concentrate on the actual areas that require improvements. A market analysis provides solutions to the problems that the businesses face, especially when it comes to the situation of the market. An example, the marketing SWOT analysis is effective in supplying information that will balance the opportunities and constraints of the company. On the other hand, market research analysis deals with gathering data about the customers and then making plans to meet their demands and needs.
Analysts have designed a standard format to help other business planners. The setup centers on answering some questions that make the process less time-consuming for the people. The inquiries have corresponding sections to organize the document. So, here are the six steps when composing the contents of market analysis.
Understand the Purpose of the Study
Different companies use marketing analysis for several reasons. Some utilize the tool to figure out internal and external issues, risks of deviating from the business norm, and the feasibility of investment. Therefore, the main point here is the destination or goal of the business. The purpose of the study depends on the objective set by the company. Planners and analysts have to understand the background and intentions of the enterprise to craft a material that meets expectations. By acknowledging what the missing information is, the process goes smooth sailing for everyone. For instance, when the market analysis is for internal use, then the procedures must be in line with the goal.
Discuss the Target Market
Some entrepreneurs assume that they know their target markets well. They launch products they see fit for the audience only to discover later on that the revenue fell short of expected numbers. Businesses want to avoid that circumstance. That is why companies should apply marketing situation analysis to gather enough information about the target market. Interpreting and assessing the actions of the target market—both potential and existing clients—can assist planners in identifying the probability of better plans for the benefit of the company.
At most, the questions that matter in this section is the extent of the target audience and the discerning the probable client from non-buyers. Using segmentation analysis, the company can divide the market and pinpoint areas where the enterprise is popular. Then the analysts determine the consumer attitude and perception of these groups or individuals.
Address the Status of the Current Industry
This portion supplements the previous part of the market analysis. A study of the target audience is not complete if the material lacks findings on the state of the industry. The current situation of the economy affects the buying habits and preferences of the consumers. Thus, inquiries for this section center on potential buyers and their willingness to pay for the goods and services. While looking at the economic conditions, analysts can determine the inclinations and indecision of the target market and the probable customers.
Competition is a natural occurrence in industries. No matter the type of business, someone will eventually come and become a competitor. Or in other cases, a new business venture arrives and acknowledges its competition. Either way, understanding the contenders in the business is crucial to the development of the enterprise. Researching the offers, advantages, and promotional gimmicks of rival companies are essential in knowing where the firm stands. Then, the company creates better strategies and plans to be in par with its stronger competitors. Planners look at the bigger picture when analyzing the information from the research on competitors of the business.
Data Gathering and Analyzing
Once the researches have the rundown of the details and information they need for the report, they start gathering necessary data. They can also touch topics that discuss the success and challenges of the company in the marketing analysis. The interpretation of the data and its technicalities depend on the hired or employed analysts of the company. Despite the high numbers in the chart, there are still numerous factors to consider in the market. It is then the prerogative of the planners to create diagrams and graphs that are easy to comprehend and readable for everyone.
Show the Results
When complete, analysts show the results to the business owner together with the formal explanation of the information written on the documents. From these details, the heads can decide on strategies and compromises they can try doing to make the situation better. Or they can continue the current plans that prove to have excellent outcomes for the business. Between the two, the results impact the decision of the company.
Preparing for Business and Marketing Plans
As mentioned before, the results are one of the deciding factors when it comes to the future plans of the business. So, what happens next after the presentation of the market analysis? The answer boils down to the preparation of the marketing and business plans. The planners construct monthly, or weekly strategic plans and marketing development plans to reestablish the standing of the company. Business plans can possess methods that attract more buyers, while marketing plans focus on tools that bring in more patrons from different parts of the country or state. As a whole, these essential documents do not entirely depend on the results of the market analysis, but the input from the report can change the direction of the plans.
Supporting Other Documents: The Purpose of Market Analysis
People invest so much time, energy, and resources when they are starting a business with nothing up their sleeve. Though there is nothing wrong with starting from a clean slate, it is good to note that there are different manuals that help startup businesses. There are many things to remember when starting in the industry. A few of these are business plans, marketing plans, and contracts. The business plans concentrate on the direction of the company, while marketing plans deal with marketing budgets and sales forecasts. Contracts are vital documents that connect dealings. The market analysis acts as supporting material for other documents. Without this instrument, some of these plans will not have adequate information and consistency.
As you can see, there’s much one can discuss in regards to the topic of a marketing analysis. It is a necessary asset that most—if not all—businesses can’t afford to neglect. Clocks that are missing hands won’t be able to tell time and neither can companies conduct marketing campaigns without the right analytical information at their disposal. Prevent any more broken clock comparisons to your business and employ what you’ve learned from this article as soon as you can. Be assured that with this tool, the effectiveness of your marketing and business plans will shoot straight through the roof.