For market analysis learn the following:
How much are potential customers want to pay?
Who is my competition?
How large is my target market?
Who are my potential customers?
What are my customers’ shopping and buying habits?
What are my competitors’ weaknesses and strengths?
Research is to see what everybody else has seen, and to think what nobody else has thought.” – Albert Szent-Gyorgyi
Your analysis always helps you to clarify what makes you different from the competition. You must know what makes you stand out or what you need to do to set yourself apart. Market research can help take you to the next level, whether you are starting a venture, introducing a new product, or growing your small business. Your market analysis can break or make your startup. Analyzing the markets helps you to deduct the risks and to understand your customers’ conditions and market.
How to Conduct a Market Analysis in the Right Way?
Market analysis takes time and lots of research in conducting and writing. You can follow the seven market analysis steps below to help guide you through your market assessment journey. It is not something that you can whip up overnight. You should take the time to plan and research your strategies before you jump into the market? You need to do thorough research before diving into a market or switching up a strategy otherwise your business could quickly sink. If you want to stay in the business, then you should know how to conduct a market analysis. You must properly prepare your business before taking the plunge.
1) Determine the purpose of your study:
There are several reasons why businesses might conduct market research. You can look at the past problems to decrease future risks and also analyze the past successes to see what you need to continue to do in the future. You may use them to assess the business risks to create opportunities or reduce issues. Your analysis is a critical part of your small business plan which shows lenders. Your industry is like the back of your hand and your business has growth potential.
You should determine whether the analysis is for internal or external purposes before starting any market research. External purposes include the lenders to give you a business loan. Internal purposes include things like business operations or improve cash flow.
The research varies depending on your analysis purpose like you can conduct a study for internal purposes. You would not need to collect as much data as you would with an external purpose. Your study should be external, internal, or both before proceeding with your research.
2) Pinpoint target customers:
If you analyze the market, then you must determine who your potential customers are. The part of this process is called a target market analysis. You need to understand where they come from and who your customers are. Your research should be painted in a clear picture of your potential customers like this:
Education level
Marital or family status
Income
Gender
Age
Location
Occupation
Once you know that who your customers, personalities, & demographics are, you need to find out their needs, and interests. You can build different personas to represent your typical customers after you compile different customers’ characteristics. The Pinpoint target market can help you better cater to future customers and markets more efficiently. Your potential customers may change or evolve as your business grows. You can revisit your target market from time to time to make sure that they still fit your business.
3) Look at your industry’s outlook:
You can outline the current state of your industry in your analysis. Make sure that you have relevant data to back up your claims. This section will let lenders or investors see that you have done your homework on your business’s industry. It will show whether or not your industry is worth their money and time. Include where your industry is heading using metrics like trends, projected growth, and size.
4) Gather additional data:
The data you have should be factual, relevant, and unbiased. You will be able to make decisions based on accurate information and back up your research. You should use credible sources to gather additional data. The more information you have and gather the better off your business will be. If you come to conduct a market analysis, information is your greatest ally. You should take advantage of different resources like:
State and local commerce web sites
Trade journal articles
Competitors’ strengths and weaknesses
Target market surveys or questionnaires
Information from interviews or focus groups within your target market
The Bureau of Labor Statistics
The Census Bureau
5) Analyze your findings:
It is time to take a look at your findings. You can lay out all of your research and organize it in different sections. Include the sections of your competition, target market, and purpose. You should include in your findings some other things:
Discounts you plan on offering
Buying trends
Your business’s forecasted growth
Prices of your offerings
You’re projected market share percentage
Your outlook for the industry
The Cashflow projection
Your customer groups
Results of your other analyses
How many customers wish to pay
An overview of your industry’s size and growth rate
You will be able to forecast other things for your business like gross margin, customers’ buying habits, and your cash flow cycle based on your research.
6) Put your analysis into action:
You have to spend a good chunk of time working on your marketing analysis. But, do not put all that extensive research to waste. Keep your analysis into action. Always look at how you can use your findings to improve your business for internal purposes. If you want to make any of your business processes more efficient use your analysis to see. You should revisit your market analysis every now and then for necessary tweaking. If you conducted an analysis for external purposes then be prepared to speak with lenders about your conclusions and research.
7) Compare your competition:
You need to understand your competition and you must know who your competitors are trying to target to further analyze the market. Look at your competition’s offerings targeted customers, disadvantages in the market, and location. Once you outline your weaknesses, opportunities, threats, competitors’ strengths, rank them from most to least threatening. You should determine your market position and the startup’s advantages. Always make a list of all of your main competitors then go through each one on the list. Using this list determine their weaknesses and strengths.