Conducting Market Research For Your Business
The term “market analysis” is frequently perplexing for entrepreneurs, particularly those who specialize in a particular niche or market segment.
Indeed, many small business owners are unfamiliar with the process or complain that it is too complicated or expensive, and they wonder why or if it is necessary.
What does market analysis entail?
In the simplest terms, a market analysis is an evaluation of:
– A market’s unique problem or opportunity.
– The target market’s needs in relation to the problem or opportunity.
– Marketing strategies for a specific product or service that meets the needs of the target market.
When is it appropriate to conduct a market analysis?
– When beginning a business.
– When venturing into a new market.
– When contemplating the purchase of a new product or service.
Why is it necessary to conduct a market analysis?
– To keep business risks to a minimum.
– To gain an understanding of the issues and opportunities.
– To determine potential sales opportunities.
– To develop a marketing/sales strategy.
The market analysis process is divided into three stages:
Part 1 – Obtaining a Basic Understanding of Market Conditions
This provides you with fundamental information about your entire market — its size, competitive landscape, and customer base.
Part 2 – Market Opportunity Identification
This provides you with more targeted information about potential market problems or opportunities, such as growth, current and future trends, external factors, and additional information about specific competitors.
Part 3 – Creating Market-Driven Strategies
This is where we discuss the value of market research. It assists you in identifying opportunities for business growth. By gaining an understanding of the market and identifying available opportunities, you can develop a marketing strategy that will leave your competitors in the dust!
Here are ten questions to get you started:
1. What market am I attempting to penetrate?
– Who are these people? (Demographics at a Glance)
– What is their primary issue with this market?
– Are the products or services offered in this market meeting their needs?
2. Who are my rivals in this market?
– How successful are they in this market?
– Do they promote a comparable product or service?
– What is the market share of the market’s three largest competitors?
3. Is this market poised for growth?
4. How large is this market?
– Is there potential for expansion?
– Is the industry gaining traction? Stable? Saturated? Volatile? Declining?
5. What distinguishes my product or service from the competition?
6. How do I gain access to this market?
– How are my competitors currently gaining traction in this market?
– Is this the most efficient method?
– What are the alternate routes to market?
7. What are my competitors’ business models in this market?
– How effective are they?
– Is there a better or more efficient way to do it?
8. What do customers expect from a product or service of this nature?
– What are the product’s or service’s core competencies?
– How will the customer perceive the product as “new,” “different,” or “better?”
9. What is the price point at which customers are willing to pay for this product or service?
10. How do we differentiate ourselves in this market?
Not only will knowing the answers to these questions assist you in determining whether a need exists for your product or service, but it will also assist you in determining the most effective methods of reaching your customers, pricing your products or services, and ultimately increasing your sales!