Mastering Market Analysis in 4 Simple Steps
Having a strong understanding of the market and the customers is the stepping stone to success for any company. Unless businesses have a clear idea of who their customers are, developing a successful marketing strategy will be nothing less than a struggle. Market analysis tools give organizations in-depth insights into their market and other factors that affect their business. Market analysis templates are designed to provide a quantitative and qualitative assessment of a market. It identifies the size of the market both in terms of volume and in value, the various customer segments and buying patterns, the competition, and the economic environment in terms of barriers to entry and regulation. Here are 4 simple steps to follow for developing an ideal market analysis template:
Develop an industry overview
The first step in building a good market analysis framework involves describing the industry and discussing the direction that it’s headed towards. It is essential to discuss key industry metrics such as size, trends, and projected growth. This step is quite different from a market research. Industry overview involves analyzing all the businesses that similar operations. Having a clear idea of the industry overview is also a great way to show the investors that you understand the larger landscape that your business is competing in.
Identify the target market
This is the stage in the market analysis where companies define who their ideal customer is. The factors to be listed out in this step involves the market size, demographics location, psychographics, and other general market trends. In many cases, businesses might have more than one type of customer. In this case, companies will have to undertake a market segmentation study wherein it is required to group similar types of customers into segments and describe the attributes of each segment.
Identifying the key competitors in the market is an integral element of market analysis. Market analysis tools help businesses to not only identify the strengths of the other players in the market but will also point out the competitor’s weaknesses that can be taken advantage of. In this manner, companies can differentiate themselves by offering products and services that fill gaps that competitors have not addressed. One of the best ways to understand the market competition is to talk to the prospective customers and ask them who they are currently buying from and understanding what alternate solutions are being provided by the other companies.
Pricing and forecasting strategies
The final step in building a good market analysis framework is to figure out the pricing strategy and create a sales forecast to better understand what portion of the market the company intends to capture. Factors such as the cost of production, profit margins, and the prices of competing brands should be taken into consideration while fixing the prices for the company’s offerings. The company’s forecast should reflect a realistic view of what the business intends to sell within a fixed span of time.