Market Analysis should be your first step in developing any marketing strategy.
Name a successful brand offering great products, services and experiences, and you will find a great market analysis behind it. Yes, even that company that has revolutionized how we access and listen to music and use our phones (or should I say portable cameras that allow us to communicate with others). The big myth is that Apple did not do any market research, but that has been proven false in a number of public filings. But I digress.
When developing any marketing strategy or plan, a market analysis should be your first step. The market analysis is the foundation to understand the needs and wants in the marketplace and how well those needs are being met by competitors. After all you need to know where you stand today in order to figure out the best way to get to where you wish to go. But what should be part of a winning market analysis?
The benefit of a market analysis
Effective market analysis gives valuable insights into shifts in the economy, competitors, ongoing market trends, demographics, consumer expenditures, among other things. In the end, it offers the basis to make wise business decisions.
Two components of market analysis
Let’s break down two different types of market analysis you can conduct:
Build a complete profile of your ideal customers for your business. Use that profile to determine the size of the market for your product or service. Customer profiles can help you to build more efficient and effective marketing campaigns. Insights on demographic attributes such as location, age, income, wealth, and home value help in determining where to place brick and mortar. Knowledge of content consumption (what, where, when, how) aids in building content strategy and campaigns.
The goal in any competitor analysis is to understand what competitors are doing and what position they are going after in the marketplace. What are the specific segments their solution helps, and how do they help them? Where are there gaps in the marketplace your offering can fill? Who is growing and why? Who is profitable and why? What are trends in the market that your competitors are (or not) reacting to? Build a complete profile of your main competitors and brands that may indirectly compete in ancillary products and services (a concert venue may compete directly with other concert venues, but also against local sports teams, festivals and other entertainment options). Brandwatch offers additional suggestions you might wish to check out.
4 Steps to conduct market analysis
Here is quick and easy framework to guide you in building a market analysis:
1. Determine the goals of your analysis
Before you start, you must keep the destination in mind. It helps to ask some simple questions:
• What is the goal of the analysis?
• Who is the key audience for the market analysis?
• What am I trying to learn?
• What will I do with the insights from the analysis?
• What is the best way to collect those insights? How do I proceed?
2. Determine the questions you need to ask to support the goal
You’ll need to prepare a list of questions you want to ask that will help you get to your goal. Think through questions that are insightful and actionable. Answers you seek should tell you more about the market. And you should be able to determine a path forward for your brand with each answer. It should help determine things like target audience, positioning, messaging, promotion, product features and benefits, etc. Questions like these can help to get a framework of this analysis.
• Who are my customers (demographics and psychographics), what are their needs, where do they hang-out and/or get information about solving their problem, and how do I reach them?
• What are the needs of buyers? What are the primary considerations behind their decisions?
• What do buyers value?
• Are they price-sensitive? Are there any pricing issues I need to be aware of?
• Who are my competitors? Where are their strengths and weaknesses? What is their strategy (consider the 4Ps like product, price, promotion and place/distribution)?
• What are the emerging trends in my market? What trends are my prospective customers facing (social, demographic, political, legal, environmental, etc.)
3. Seek out answers to your questions
You can do primary research using surveys, focus groups, CRM data (sales, web behavior, call data, appended data, etc.), observations (in-store, social media, customer visits), employees (customer service, billing and sales reps, customer-facing service providers) or experimentation. Secondary research from industry trade groups, vendor partners, annual reports and other public filings/records/lawsuit filings, news articles, competitor websites/collateral/social media and reviews, et al. can also be valuable.
4. Present your findings in an easy to understand format
Start with an executive summary. Very often you will have lots of great details to share. Go back to your original goals and key questions, and be sure to highlight these findings first.
Then, in the next section, offer the most important supporting detail behind each key finding. Charts and graphics help to tell the story easily and quickly. Quotes from customers or online reviews supporting your point can be highlighted here too. Tuck other relevant, but maybe more data intensive or complex details into the appendix. Survey questionnaires and answers to them can often be placed in the appendix. Other less crucial findings to your market analysis can also be put here.
Unsure of how to start your next market analysis project? Contact me today to learn how.
Taking that first step to creating your market analysis can be hard. Need help taking that first step, contact me today. I would be happy to discuss how to start at no expense to you.