A market analysis is conducted when someone is starting a new business, entering a new and untested market or when a new product is being brought into the market. Wise companies also conduct periodic market analysis to test changing consumer preferences, impacts of new entrants in the markets affecting their sales and changing global economic conditions which can change flow of money and influence buying characteristics of people.
It is essential to conduct a market analysis in order to minimize risks in business, understand the different problems and opportunities available in the market, identify areas of sales opportunities and plan your market strategy so as to maximize sales and earn profits.
In order to conduct a market analysis, you need to go through the following steps.
- First and foremost, you need to understand the market conditions to get the basic information about the size of the market, the level of competition and the customers.
- Next, you have to identify market opportunities. You need to gather information about problems as well as opportunities available in the market, growth prospects, the current and possible future trends, specific and detailed information about the lead competitors and other such useful information.
- In the last stage, all the market data is analyzed so as to develop the best marketing strategy that would result in high sales and more profits. Logistics, cost reductions, better penetration and higher sales result from an indepth market analysis and implementing strategies developed on these data.
Following are the points that need to be addressed by you while conducting a market analysis.
- You need to decide on the market that you are targeting. After that, all the problems in that market need to be understood and you need to check whether the needs of the targeted market are being fulfilled by the existing products and services. Conduct online market research, employ a market research company, conduct marketing surveys and gain market intelligence which keeps you on top.
- You must have a close look at the top three competitors, their success rate, the products offered by them and their share in the market. Business research and competitor analysis is an ongoing process to be conducted periodically to keep abreast.
- You need to gauge whether there is possibility of growth in business in this market. You need to clearly understand and see how different your product or service is from the other competitors. Internet marketing research and internet surveys will help.
- You have to look at ways whereby you can create a foothold in the market and later access other alternative ways in order to grow your presence in the market. Market reports obtained directly or from specialist market research companies tool you up.
- It is important to look at your business model in comparison to your competitors and find effective ways to better your model.
- Work on making changes in your products that will make them newer and better in comparison to the ones offered by your competitors and would be patronized by your customers.
- An important decision to take is the price of the product. You need to decide on a price that is most appropriate for converting sales as well as registering maximum profits. Consider broadcast marketing or niche marketing or a combination of both. Companies do this through creating a low cost product for a wider market segment and a classy product for the snobs, higher priced though the product may be the same but with different wrapping.
Having addressed all the above points while conducting market analysis, you shall be able to develop a market strategy that can enhance your sales and establish yourself comfortably in the market.
