No entrepreneur wakes up in the morning and dives into a business without proper and effective research. You need in-depth research for whatever you want to do in business. Through research, business management gets to know the target audience, and in understanding the target audience, you’ll find out how to develop products that fit into your consumers’ needs. This is where market analysis comes in. And though the concept seems challenging to some people, it isn’t as tough as you think it to be.
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Market analysis is the process of gathering information about the dynamic nature of products within an industry and what makes the audience or target market tick. To achieve business success, market analysis should not be neglected or swept underneath the carpet. Does market analysis provide entrepreneurs and organizations with answers to questions like who are my potential customers? What are their buying habits? What is the size of the target market? How much are consumers willing to pay for products or services? Who are my competitors? What are their strengths and weaknesses? Where is my area of competitive advantage? What are the likely barriers to accessing the target market? These reveal that market analysis shows you all you need to know about starting a new business, repositioning your brand, as well as launching a new product.
Below are tips on how to effectively conduct a market analysis:
Determine the purpose of your market analysis
First things first, why are you conducting this analysis? There are numerous reasons for market analysis. It could be for internal needs, such as improving cash flow or business operations. It could also be for external needs, such as starting a new business, testing a new product or service, exploring business locations, etc. Understanding the reason for the analysis helps you know the kind and depth of research to be conducted.
Analyze Industry Current Trends/Outlook
This analysis helps investors know if your industry is worth their time and resources. Industry analysis helps you know and understand current trends within the industry, where the industry is headed, the size of the industry, and possible growth scale in the industry. Through this analysis, you’ll be able to study businesses similar to yours and find out the likely future competitiveness of the industry.
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Analyze your Target Audience
To produce satisfactory products or services to an audience, you need to understand your audience like the back of your hand. Everybody cannot be your customer. You need to be able to see through your audience’s needs and want. To achieve this, you will need to conduct a demographic, psychographic, geographic, and behavioural analysis of your customers. If in the course of this, you notice a varying audience, then you need to segment your customers according to their age, gender, consumption, and behavioural habit.
Competitor Analysis
Never take your eyes off your competitors. Write a list of your competitors in the industry, find out who they are targeting, what they are offering, as well as what they are not offering. The key to standing out in the industry is exploiting your competitors’ weaknesses and offering what they are not offering.
Price Analysis
This will help you know the position of your brand in the market. In pricing, you need to take into consideration your cost of production, your competitors’ price, and the message which your price would send to your target audience. Bearing in mind that customers link high price to quality, you need to ensure a high-quality product delivery if your price is high. And if you’re competing as an alternative to a higher industry, you also need to deliver a unified message.
Findings Analysis
At the end of these analyses, there should be an avenue to analyze all information gathered according to different segments, such as purpose, target market competition, pricing, etc. Your analysis should contain an overview of the industry, its size, target audience information, industry trends, cash flow information, etc.
Finally, employ the results of your findings to make your business stand out from the crowded market.
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