Market Analyses provide insight into planning marketing strategies for an industry offering. Individual pieces of a full Market Analysis such as market sizing can help in fundamental decision-making, but will not guide the overall market strategy and the specifics required to make the strategy succeed in the real world. There are several other factors that are required to develop a fuller market understanding. These factors include industry trends and data, size of the population within the demographic to be targeted, key competitors and so on. To understand the steps infoAnalytica applies to Market Research and Analysis, please visit our Methodology page.
An in-depth understanding of customer needs, requirements, psychographics and purchase behavior needs to be developed as well. This can be fulfilled via research into the buyers (consumers or businesses) or industry research yielding data on purchase models, buying decisions, budgets, preferred brands and several other important parameters. Competitor Research can help identify best fit business models, the largest opportunities and guide product or service development and eventual messaging for heightened competitive advantage and differentiation.
Market intelligence like this can help improve a supplier's understanding of how to develop their market segments, and which segments to target. Taking this a step further, research can also help you identify potential customers and the most effective methods and channels to reach them.
Often, research into competitor customers (or even one's own customers) should help develop an understanding of which market segments customers fall into and how to enhance revenue, and market shares. While researching one's own customers, the right questions can unearth data on why certain customers have gone 'cold' and are not buying from the supplier anymore. The reasons could be myriad, ranging from inadequate customer support, delayed deliveries, product or service features that do not meet customer needs, cumbersome processes involved in using a product or service, pricing and placement issues, or simply because a buyer has relocated and the supplier is no longer in the user's territory, or not 'on the shelf', and also brand negative factors or reputation issues. This is just the tip of the iceberg while performing customer research.
Market Analysis Objectives
Market Analysis tells us how feasible the market is, while studying external factors such as opportunities and threats in the market. These are then mapped to the strengths and weaknesses of the supplier under study.
A Market Analysis should at a minimum provide insight in the following areas:
- Market size (current and future)
- Fundamental Market Needs
- Buyer demographics
- Key Players or Providers and their market shares and revenues from the market offering under study
- Market growth rate
- Market profitability (this is a good clue into whether a supplier can sustain desired margins for their offering)
- Industry cost structure
- Sourcing and Distribution channels
- Economic considerations
- Compliances that require adherence (if applicable)
- Market and Industry trends
Market size can be ascertained based on existing revenues and potential revenues. For more information on Market Sizing, please see market sizing research
Fundamental Market Needs
This will provide insight into how the offering should exist. Needs in the market should map to the features of the offering.
Who is the buyer? Factors such as age, occupation, earnings and several other data points as applicable
There are several sources of data that yield this information through secondary research
Market Growth Rate
A simple means of forecasting the market growth rate is to extrapolate current and historical data. However this method is not accurate. Unless emerging factors that may be conducive to growth, or negative to growth are not studied, the findings may not be applicable.
Nine factors influence market profitability:
- Buyer power
- Suppliers Power
- Barriers to entry
- Threat of substitute products
- Rivalry among firms in the industry
- Industry Cost Structure
- Level of Market Saturation
- Criticality of Need
- Complementary products/ The government/ The public.
Sourcing and Distribution Channels
The following aspects of the distribution system are useful in a market analysis:
Primary distribution channels - are they effective enough for your offering?
Emerging channels - new channels (e.g. iTunes for music) can point one to developing an early mover advantage.
Industry and Market Trends
What products or services in the space are market leaders? Why? What are the buyer preferences in the industry. What dictates demand for these offerings?
What are the economic pressures that the market is facing, if any
Compliances that require adherence (if applicable)
Does the offering require specific compliances to exist in the market (e.g. Sarbanes Oxley for BFSI, HIPAA in healthcare)
infoAnalytica uses a combination of secondary research and primary research to provide deep and actionable insights into any market analysis for a wide range of industries. To see the industries we serve, please visit our profile