Conducting a Market Analysis on Your Business
by Rodney Boettger
Published on this site: January 6th, 2006 - See
more articles from this month
The term "market analysis" is often confusing to
entrepreneurs, especially for people who focus on a specific
niche or market segment.
In fact, many small business owners don't understand the process
or complain that conducting a market analysis is too complicated
or too expensive and wonder why or if it is necessary.
What is market analysis?
In the most basic terms, a market analysis is an assessment
of:
- A particular problem or opportunity in a market.
- The needs of the target market relating to the problem
or opportunity.
- Ideas for marketing a particular product or service that
fills the needs of the target market.
When should you conduct a market analysis?
- When you are starting a business.
- When you are entering a new market.
- When you are considering a new product or service.
Why should you conduct a market analysis?
- To minimize business risks.
- To understand the problems and opportunities.
- To identify sales opportunities.
- To plan your marketing/sales approach.
The process of conducting a market analysis can be divided
into three parts:
Part 1 - Understanding Market Conditions
This gives you basic information about your entire market
-- the size, the competition, the customers.
Part 2 - Identifying Market Opportunities
This gives you more targeted information about potential problems
or opportunities in the potential market, and includes information
about growth, current and future trends, outside factors and
more information about specific competitors.
Part 3 - Developing Market-Driven Strategies
Here is where we get into what market research does for you.
It helps you to pinpoint opportunities to grow your business.
By understanding the market and knowing what opportunities
are available you can create a marketing strategy that leaves
your competitors in the dust!
Here are 10 questions that can help you get started:
- What is the market I want to reach?
- Who are they? (Basic Demographics)
- What is their biggest problem in relation to this market?
- Are their needs being met by the products or services
provided in this market?
- Who is my competition in this market?
- Are they successful in this market?
- Are they marketing a similar product or service?
- What is the market share of the three biggest competitors
in this market?
- Is there room for growth in this market?
- What is the size of this market?
- Is there room for growth?
- Is the industry growing? Stable? Saturated? Volatile?
Declining?
- How is my product or service different from the competition?
- How can I reach this market?
- How is my competition currently reaching this market?
- Is it the most effective way?
- What are the alternative ways of reaching this market?
- What are the business models of my competition in
this market?
- Are they effective?
- Is there a way to do it differently or better?
- What do customers expect from this type of product
or service?
- What are the core competencies of this product or service?
- What would make the product "new" "different"
or "better" for the customer?
- How much are customers willing to pay for this product
or service?
- What is our competitive advantage in this market?
Knowing the answers to these questions will not only help
you figure out if there is a need for your product or service,
it will help you figure out the best ways to reach your customers,
price your products or service and ultimately make more sales!
Mr. Boettger’s consulting firm helps business
market effectively without spending more money on advertising
through a growth performance guaranteed system. An extensive
DIY small business action plan is available free on their
website at http://www.7StepConsulting.com
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