The term "market analysis" is very confusing to entrepreneurs, especially those who focus on a specific market niche or market segment.
In fact, many microenterprise owners do not understand the process or complain that conducting a market analysis is too complicated or too expensive and would be surprised that this is not necessarily true.
What is a market analysis?
In the most basic term, a market analysis is a study of:
- A particular problem or market opportunity The needs of a target market that requires solving a problem or opportunity Ideas for marketing a particular product or service that meets the needs of a target market.
When should a market analysis be done?
- When you are starting a business When you are entering a new market When you are considering adding a new product or service
Why should you carry out a market analysis?
- To minimize the risk of your business To understand problems and opportunities To identify sales opportunities To plan your marketing / sales message
The process for conducting a market analysis can be divided into three parts:
Part 1. Understanding the Market Conditions
This will give you basic information about the entire market - size, competition, customers.
Part 2. Identify Market Opportunities
This will give you more specific information about your potential problems or opportunities in a target market, this includes information on growth, current and future trends, external factors and more information about your competitors.
Part 3. Developing Targeted Market Strategies
This is where market research leads the way. It will help you find growth opportunities for your business.
By understanding the market and knowing the opportunities that are available, you will be able to create a strategy that will separate you from your competitors.
Here are 10 questions that can help you get started:
1. What is the market that I want to reach?
- Who are they? (Basic Demography) What is your main problem in relation to your market? Which of your needs can be covered by the products or services in this market?
2. Who are my competitors in this market?
- Are they successful in this market? Do they provide a similar product or service? What is the market share of my three largest competitors in the market?
3. Is there capacity to grow in that market?
4. What is the size of that market?
- Is there expansion to grow? Is the industry growing? Is stable? Saturated? Volatile? Declining?
5. How is my product or service different from the competition?
6. How can I reach this market?
- How is my competition reaching that market? Is it the most effective way? What are the alternative ways to reach that market?
7. What are the business models of my competitors in this market?
- Are they effective? Is there a way to do it differently or better?
9. What do customers expect from this type of product or service?
10. What is your competitive advantage in this market?
Knowing the answers to these questions will not only help you if your product or service is required, but it will also help you find the best ways to reach your customers, the price of your products or services, and ultimately make more sales!
