There is a story of substantial market analysis on competitors and customers behind any and every successful product or service available in the market today. It is the most important and first step in the development of any marketing plan. So, what is market analysis? To answer that in layman’s terms, it is the thorough procedure of data collection to decide whether the product or the service that is going to come will cater to customers’ needs.
Effective market analysis can help in gaining valuable insights into competitors, shifts in the economy, ongoing market trends, demographics, and the traits of customers’ expenditure. Market analysis is one of the crucial components to help business with all the required information and making wise business decisions.
Why is it important to do a market analysis?
#1 Great help in understanding your customers
Market analysis is a method through which the complete profile of an ideal customer for your business can be pulled. It can help in determining the size of the market for your business. Furthermore, it will also help in gaining insights on their location, age, income, and gender that can pave the way for creating specific marketing campaigns.
#2 Analyze your competitors
To analyze your competitors, market analysis is the most important weapon. It can also help in analyzing the new competitors, if any, who are trying to gain traction in the market. It also helps in gauging at the reaction of competitors when you launch any new product or service. Weaknesses of competitors’ strategy are one of the most important things that this analysis helps to identify.
#3 Test before launch
Once your product reaches the final stage, abstain from jumping directly into its marketing; rather test the product or service before launch and then market analysis will help you devise the most appropriate strategy to market the product.
#4 Never disappointed
Charles Darwin once said that those who can manage the change in the best possible way will survive and not the strongest or the intelligent. This same logic is resonated when any business does the proper market analysis and make accurate market predictions like Apple and Netflix. As a result, to sustain themselves in the market and stay ahead of your competitors, not only is anticipating change important but also its prediction.
How do you conduct a market analysis?
Once the goal of the market analysis is clear and the what and why part of it is also clear, then comes the question of how to do it. Market analysis is basically done in the following ways:
#1 Prepare questionnaires
Prepare or gather original information through surveys, observations, or experimentation. Questions like these can help to get a framework of this analysis.
- Who are my customers and how to reach to them?
- What are the needs of buyers?
- What factors are behind the buying decisions of my customers?
- What prices should be fixed?
- Who are the competitors and what is their strategy and weakness?
- What are the ongoing trends?
- What are the demographic characteristics possessed by the target customers?
These questions form the primary and secondary steps of this analysis. Once the primary and secondary method of market analysis is done, social media and public records can be analyzed to understand the market.
#2 Social media
Social media is an excellent medium for market analysis as it clearly depicts the interests and behavior of the target customers and helps in gathering qualitative feedback for the product and services they are already using.
#3 Public records
Public records can be utilized at their best to fetch the market information that is required. Information like demography and their business, which are essential components of such an analysis can be gathered from such records.
Hence, market analysis is a golden tool to gather important information and identify and analyze the needs of customers, the market, and decoding all information about the competitors.