7, Jul 2023
A market analysis is a comprehensive study of a specific industry’s characteristics and emerging future trends. It allows businesses to make informed decisions and develop strategies for achieving their goals and objectives. A complete market analysis should include an examination of the following areas:
Market Size and Potential: Market analysis helps businesses determine whether a product or service will be profitable. This includes evaluating the size of the potential audience, their buying patterns and other factors that can influence demand for a particular product or service. It also helps determine the competitiveness of a given market by evaluating the strengths and weaknesses of existing competitors.
Performing a thorough market analysis will help a business better understand the needs of customers and establish their competitive advantage. It will also allow them to recognize any knowledge gaps and fill them in on time.
The information that should be included in a market analysis can come from many sources including public (free) online resources like social media, forums and websites, industry insight reports from research agencies such as Statista, YouGov and others and internal data from your business such as customer feedback and churn rates. The type of data that you collect should depend on the nature of your market analysis and the level of detail that you require.
For example, if you are looking at the potential for your new jewellery line, you might conduct a qualitative market analysis by interviewing a sample of the target demographic in your area and asking what they think would drive them to purchase from you instead of your competition. This can give you a great deal of information that can then be used to create a targeted marketing strategy for your business.
A good market analysis will also provide a valuable benchmark against which to evaluate your company’s performance and identify areas for improvement. This will help you avoid making the same mistakes again and can explain any anomalies that might have occurred in the past.
It’s important to remember that market analysis is a continuous process and you should be constantly monitoring and updating your information about your competitors, customers and the overall market. This will ensure that you are always delivering the most relevant information to your clients and customers.
Regardless of whether you’re writing a one-page business plan or creating a detailed strategic plan for your company, a solid market analysis is a necessity. In addition, a thorough market analysis will prepare you to answer any questions that investors or lenders may have about your market and the size of your potential audience. So, take the time to perform a full market analysis and you will be glad that you did. If you are having trouble getting started, try using the free business plan templates on Bplans to get a head start. Each template has a full market analysis section that you can customize for your own business. And, if you need additional guidance, contact a Bplans advisor for a free consultation.