Market analysis tools are undoubtedly what companies require to understand and stay up-to-date about their target markets. Before we get into what are the important forms of analyzing the market, let us answer some of the important questions related to market analysis:
Why is it Important to Analyze the Market?
The answer to this question: It is not possible to do business effectively and survive in the market without carrying out appropriate market research and market analysis. Here are a few parameters that companies can keep track of while analyzing the market:
- The products and services that your target audience are already using
- The gap in these products from customer expectations and the ways to cover shortcomings
- Identify the marketing mix of other players in the market
Various quantitative and qualitative data are highly important for businesses to make accurate business decisions rather than making blind decisions based on gut feeling. Therefore, market analysis is extremely important for any business.
Commonly Used Sources of Market Analysis
Market analysis can be done through two sources – Primary and Secondary. Some of the most common types of primary sources of data are:
- Observation- Refers to observing customer behavior in the marketplace. In the digital era, observing customers’ behavior on the website using various analytical tools
- Surveys- Conducting interviews, social media surveys, or telephone surveys to understand customers’ preferences
- Focus Groups and Product Testing – Selecting a bunch of people and directing questions at them and to understand their response and also launch a small batch of products for few customers to test their response towards the product
The main sources of secondary information for a business are from:
- Trade journals
- Blogs on niche segments
- Government institutions like the Chamber of Commerce, Census Bureau, Labor Department, etc.