What does market analysis mean? Do you know that most large multinationals have a department for market analysis?
Being in charge of a small or medium-sized company requires mastering a multitude of data to know the current situation in the sector, what trends or weaknesses we are facing, and the next steps we must take without risks and with a more significant profit margin.
When we think of market analysis, we want to know the commercial viability of a particular economic activity (a new product, service, or business project). But the truth is that much more information could be helpful for future research and marketing plans behind a good market analysis.
Market analysis is a compilation of data on customers, competitors, and the market we want to develop, in general, which will serve for further study. From the analysis of this data, other information is obtained, such as market trends, the company’s positioning, the product, etc.
The goal is to explain how your target audience might react to new products and services or changes you plan to make. As a marketing research sub-area, qualitative and quantitative methods are suitable for market analysis.
Why should you develop a market analysis?
The analyzed data will be used as a backup for decision-making, which can be crucial for your company’s success.
How does the data obtained from the market analysis help you?
- Define your target audience: At the same time, we will be able to collect all the necessary information to know the profile of our target audience: demographic data, knowing what their problems or needs are, how they think, how they search for products or services and why they choose the competition. In this way, we will know what the usual buyer will be like and how to access him
- Guarantee the investment: A market study can be the difference between launching a successful or disastrous product thus losing a large amount of money. That is why it is preferable to know which products to invest in.
- Essential information for business survival: It will serve to know approximately the success rate in the launch of a new product in the market and create a unique business plan for each market, segment, and so on. It will also help make other decisions, such as how much to spend on a product.
- Market research, the basis for a marketing mix plan: The market analysis is used to design the strategic marketing plan and will help carry out a good marketing mix plan. After designing the product for a specific target audience, the data collected will clarify where and how the product should be distributed, how it should be communicated, and the fair price to cover the costs, also adapting to the positioning or image of the product that we want to transmit to the consumer.
- Set the price: Once the target and the market in which the new product is going to be launched are known, we will be able to define the price with greater accuracy, a determining indicator to keep up with competitors and productivity costs.
- Can be developed at different times and for various purposes: Market research can also be conducted throughout the product’s life cycle, which can help detect deviations from the marketing plan. Market studies have a high rate of return on investment in general.
When do companies carry out a market analysis?
A market analysis can be performed at various times:
· Market Entry: The company must conduct a market analysis before launching a business idea. This way, they increase the chances of creating a successful business model.
· Product launches: When expanding their offer, companies can assess the extent of introducing a new product to the market.
· Product redesign: A market Robotoanalysis can be done even if a company wants to change an existing product. For example, suppose the sales generated by the product have decreased. In that case, a market analysis can show the reasons for this and provide information on what changes could lead to better sales.
How to prepare a market analysis?
You should follow the following guidelines to prepare your perfect market analysis:
1. Define the structure that your document will have and decide how you are going to collect the data: Before starting the arduous research process, define the points of your study and think about what your sources may be (surveys, interviews, direct observation, government sources, statistics, specialized magazines, reports, etc.). It would help if you adapted your analysis to a methodology that is as close as possible to the one used by professionals so that you can obtain good results.
2. Determine the objective of the market analysis: Depending on the reason that leads you to do it, you will apply some variables or others. For example, to find out what responses the new product line will have, which diversifies the company’s business, we’ll need to update our information on current and potential customers.
3. Establish a budget: You have to be realistic; the research that a market analysis implies requires spending time and resources. So it is essential to consider how far you want to go to assess how much to spend.
4. Research the competition: A good starting point is to study how the competition is behaving, what is working for them, and what is not to determine the market trends. At the online level, there is a lot of data that we can extract thanks to interesting professional positioning analysis tools, such as Semrush, Woorank, or Ahrefs. In this sense, you should know that around 75% of Internet users consult the reviews and opinions of other consumers before buying a product, according to data from the Association for Media Research (AIMC).
5. Observe the behavior of customers: Thus, through the use of different tools, such as conducting in-depth interviews, online surveys, or discussion groups, you will be able to find out what are the focuses of attention of current consumers, their motivations, purchasing habits, etc.
Some professionals also use Google Analytics to determine users’ behaviors on their website, which helps them to know their preferred products and when they leave the shopping cart or the bounce rate.
At Patel-solutions, we will help you achieve the objectives and success of your company through our marketing and communication services and a team of specialized professionals.