04 Jan Know Your Customer: How to Do a Market Analysis
The most successful businesses perform regular market analysis to stay informed about competitor activity and changes in their market. If you want to know how to do a market analysis for your business, this simple guide will show you how to write the most crucial section of your business plan.
What Is a Market Analysis?
Market analysis is the act of conducting investigative research on your market including competitor behaviour, market trends, and market share.
Angel Investor Tim Berry suggests that this practice be completed at least once a year regardless of whether you are an established or start-up business. This is due to changes that often occur in markets, as he explains in his article, whereby your target market is not limited to your existing customer base. Your potential market is “much wider than just the people you already reach” as you prepare for business growth.
Market analysis can aid you in understanding the four key elements in any business plan — product, price, placement, and promotion. Studying these concepts will help you to understand the core of your business as this is a marketing structure that has been favoured and revolutionised for decades.
Who Should Perform a Market Analysis
In short, every business should perform a market analysis as this action accurately targets a suitable audience for your product or service. “Without customers, your business has no chance of surviving” — when you determine which consumer segment to focus on you’ll be able to consistently attract the right customers to your business.
Forget about trying to serve the mass market — with the rise of the internet niche products and services are booming. Successful market research provides a clear indication of who is the receptive audience that will actively engage with your offering. Compiling an industry analysis report will provide you with important details needed to develop a business that stimulates a clear, emotional response to this target market. This is guaranteed to convert sales.
How to do a market analysis
Enough about why you should do it — here’s how to do it:
- The Big Picture – Before you can think about your tiny slice of the pie, you need to gain accurate knowledge of your entire industry, its size and growth rate. This foundation for a market analysis should not be built on an estimate, but rather on proven statistics.
- Your Share – Using the big picture data you can determine some key factors of your target market by highlighting their demographic. Your market segment’s lifestyle and income level, amongst other components, will heighten your understanding of how to drive your customer to purchase.
- Detailed Drivers – Delve deeper into the purchasing process to determine what the key emotional decision-makers are in your industry. This will give you an in-depth advantage and help you calculate the average time it takes an order to be fulfilled. You can build your operations around this once you determine the level of demand.
- Budding Barriers – In this section, anything that is likely to deter your customers should be included. This includes your competitors and other external forces like political or environmental change. Some of these variables are out of your control, but recognising their existence can help protect your profits in the long-term.
Successful Market Research
Now you know how to do a market analysis and what it means for your business — the time is now to understand what makes market research successful. Partnering with a research provider that has further reach and understanding of your needs can be helpful. A service that has access to a representative research panel is ideal for your brand to ensure you’re asking the right questions for your business plan.
Use a service like ours that can guide you through the entire market analysis process — this will give you the best understanding of customer experience, culture, product, and pricing.
Get in touch with SurveyGoo today to discuss your market research needs. Your business can benefit from a comprehensive market analysis whether you’re an established enterprise or small startup.