In any business, companies operate to make money and attract customers before other companies get them. Competition has always been fierce between companies when they sell similar products. A great example of direct competition is Coca-Cola and Pepsi. With ever-evolving technology and trends, data and insights are a powerful weapon helping companies to circumnavigate through the market. Nevertheless, it is not always clear where to gather market insights to inform your sales, business development, and marketing strategies.
Market research provides a data-driven approach to making a high-impact and realistic plan for better business and marketing decisions and strategy. This helps to know the following information.
• Similar products and services which are already popular
• Competitors in the field
• Gaps or opportunities in business
• Other factors outside of competition and demand can impact the success or failure of the business.
Let us explore six possible steps in marketing analysis to build a foolproof marketing strategy.
Step No. 1: Defining Business Goals
One of the data-driven approaches to market analysis is Critical Success Factors (CSF) analysis which is a “non-classical” tactic that one would not have thought earlier. CSF analysis may be a technique a business can use to pinpoint areas that are essential in fulfilling the business’s mission and goals. It will vary from business to business, but CSF sources fall into the following categories:
i. Industry CSFs
These factors are derived from industry characteristics. Technological advancements or cutting-edge business models are an element of this CSF field.
Example: Concorde: The first supersonic aircraft would not have taken off without the double delta wing. The brand-new design for the wing was the brainchild of the design engineers, on whom the aviation engineers relied, came up with brand-new designs for the wing.
Competitive strategy and industry position CSFs: Depending on competitor activity and internal organizational factors like management structure, customer demographics, company financials, etc., each business outlines its own success factors in relation to its rivalry and the industry as a whole.
Environmental CSFs: These are concerned with the external environment to which your business belongs. Political, economic, social, and technological factors i.e. Pest analysis helps to decide these CSFs.
Temporary CSFs: These one-time factors often occur because of a sudden or temporary event – like present global pandemic or any other new market expansion that may require companies to recruit new staff, go digital, etc.
Assessing all above factors can help the company prioritize its efforts and track and measure progress towards fulfilling strategic goals.
ii. Market Analysis Step #2: Assessing Market Size
Market size evaluation gives an estimate on audience size, potential sales volume, and revenue stream. Market size relates to the amount of individuals or companies who are often counted as potential purchasers of a given product or service.
Depending on the budget, business size and type, and industry specifics, some measurement methods that will be useful are:
- Industry/Government reports
Leading market research companies like Gartner, Nielsen and Statista offer
invaluable sources of in-depth information and data about the market which are easily downloadable and are accessible only with a cost.
- SEMrush Market Explorer tool
SEMrush’s cheaper competitive intelligence suite can provide great real-time insights into the market, including market size assessment and market dynamics. The Market Explorer tool will estimate the general market size for a specific niche supported online traffic trends.
iii. Market Analysis Step #3: Identifying Market Trends and Growth Rate
Market growth and market trends are essential steps to regularly revisit to take timely action and to fine-tune your business and marketing strategies accordingly.
Market growth trends?
Market growth refers to a rise in market size or overall sales within a given niche over a particular period. Basic Indicators such as the year-on-year (YoY) industry trend, shifts in the number of customers, and the number of complete purchases per client will help measure market growth.,
Boston Consulting Group Matrix and the Market Explorer tool and SEMrush Market Explorer tool helps large corporations manage their portfolio and prioritize budgets and operations across multiple business units based on market growth and market share numbers.
iv. Market Analysis Step #4: Getting an In-Depth Look at Competitors
Porter’s Five Forces analysis offers a robust foundation for analyzing not only competitors but also factors that affect competition – from new entrants to existing rivals to additional products and services. The Porter’s five forces analysis evaluates opportunity and risk based on the following five essential industry factors:
a. The intensity of the competitive environment
b. Level of supplier power
c. Buyer’s entry/exit costs
d. The threat of substitute products
e. Access to the market for new entrants.
v. Market Analysis Step #5: Identifying the Right Demographic
Basics as geographic, demographic, psychographic and other characteristics should be considered in any market analysis. Once buyer personas are defined the process of segmenting the target audience shall be started based on similar needs or demand features to provide tailored and more targeted customer experiences.
After identifying all imaginable buyer personas, the customers should be categorized into separate segments to tailor more relevant messaging, solve different problems, and offer different product features.
vi. Market Analysis Step #6: Accounting for Internal and External Factors
This is the last step is to gather all the findings and organize them to assess how to:
a. Capitalize on advantages.
b. Eliminate weaknesses.
c. Seize market opportunities
d. Minimize the impact of any threats.
Undertaking the popular SWOT analysis which involves considering your business’s strengths and weaknesses while staying alert to opportunities and threats.
Summing Up
Gaining sufficient market understanding may be a prerequisite for business growth and success. Without serious understanding of market characteristics and nuances, your business ideas and expectations will have little value.
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