How to conduct a market analysis
Conducting a market analysis is one of the first steps to having a successful business. Understanding your market in depth can help you to identify exactly who your target audience is, how your product and services can resolve customer pains, and most importantly, how you can stand out against the competition. But how do you actually ‘do’ a market analysis?
Firstly, a market analysis is a thorough assessment of a market within a specific industry, as a whole, it will help you make better business decisions and benefit your company.
We’ve listed the 4 steps to conducting a market analysis.
Research your industry
Before doing anything make sure you research your industry, this will help you to create the perfect business strategy which will form your business into its best position and therefore beat your competition.
In-depth market research is crucial to understanding the projected growth of that industry, current/future trends and whether your business is going to fit in well. Researching your industry will also highlight the issues, challenges and opportunities other companies within the industry are facing, this will benefit you and potentially prepare you for facing the same problems or even help you to form a contingency plan so you can ensure you avoid future problems.
Target audience
Not every single person out there will be your customer. It would probably take a long time to get everyone interested in your product, which is why there’s such high importance on really whittling your audience down to the specifics. You can achieve this by analysing your target audience through these points:
- Age
- Gender
- Occupation
- Location
- Hobbies/Interests
- Marital status
- Likes/Dislikes
As you start to form an image/idea of who you want to target, start to think about how your product is going to solve their problems and where you can find them, as this is initially why they will come to your brand, because they will want your product or service to resolve a problem, once you can do this, you are already there to beat your competition.
Competitors
One of the main elements in market analysis and within your business as a whole is identifying and understanding exactly who your competitors are. You need to analyse them, what are they offering that you are not? What are their strengths and weaknesses? You can take advantage of their weaknesses and turn them into your own strengths by offering something to the market that they are not.
You want to cover all elements, how they advertise across their media channels and what their marketing strategies are. You can find this information on their websites and social media platforms.
The competitor analysis will help form your overall business strategy, highlight where you will stand within the market and create your competitive edge.
Identify barriers to entry
It’s important to understand the benefits that will be brought to you when entering this market, but it’s just as important to know the barriers that could prevent you from entering it successfully.
Some questions to ask when conducting a market analysis:
- Are there any legal requirements that need fulfilling before launching your products and services?
- Is there anything that could affect customer behaviour or purchasing decisions such as political, economic and social factors?
- What are the overall costs of starting your business?
- Have your competitors got a strong brand identity and loyal customer base which could be hard to beat?
Once you’ve identified the potential barriers it just means you will be fully prepared if you are faced with those challenges.
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