How To Conduct A Market Analysis

The business decisions have to be supported by facts. And these facts are not produced out of thin air. Hence, businesses hire market analysts who can analyse the market forces and help business decisions. Why? Because if your businesses are not based on facts, then there is a probability that your flight is definitely going off course and you might not even realise it.

Welcome, class, to Market Analysis 101

Today, I am going to discuss what is a market analysisand why you as a market student should concern yourself with a market analysis. And I am going to tell you how to do a market analysis.

See, when you are preparing a market analysis of an organisation, you get to know -

• What products and services are profitable
• What products and services are not meeting the market demand
• Who are your target customers
• Which competitors you need to take care of
• What opportunities does the industry offer you

Professor, is conducting a market analysis really difficult?

Market analysis is not rocket science, Logan, but it definitely doesn’t have a ‘safe for children’ tag with it.

But with correct guidance and tips, you can prepare a market analysis that does not smell of amateurism.

Professor, do we immediately start writing our market analysis assignment?

No, Hussain. When you get an assignment in which you have to conduct a market analysis, you do not immediately start writing but give attention to some points.

Remember, you are not writing a 2500 word long report of market analysis with a blind eye. And these pointers are like preparations that you need before a war.

Professor, can you please explain these points?

Of course, Maxim. And these points are also the basis of your market analysis. If you are successfully able to answer these questions, you will be able to write a market analysis report as well!

Question 1 - Who is my target?

Look who your potential market is. The potential market is wider and larger than the actual market. The actual market is already within your reach.

For example, if your restaurant is catering to 100 regular customers every week, your target market is not those 100 regular customers. Your target market is every single person within the driving distance of your restaurant.

Question 2 - What my target audience buys?

When you have identified the target audience, you need to think about what are their buying habits. You have to work your way around their buying habits, analyse how they shop and how likely are they to shop.

For example, if you own a restaurant, you need to analyse who are most likely to eat at your place. Then, you need to think about how likely are the people likely to eat. Once you do that, your analysis will work if they are likely to come into the restaurant or order food through Uber Eats, Deliveroo, etc.

Question 3 - How much are the customers willing to pay?

This is an important part of any market analysis assignment. If you keep the price too high, you will lose customers. If you keep the price too low, the customers are going to brand you are unworthy. Knowing how much is the customer willing to pay for a product opens a lot of opportunities.

For example, you are selling Barbecued Snags for $20, you are not going to target anyone because the food joint across the road is selling it for $5. Every product has a price which the customer can pay and you have to keep the product within that range.

Question 4 - Who is my competition?

There can be two possibilities only. Either you will launch a product to compete with one that already exists or someone launches a product to compete with yours.

Let us go with the former.

So, when you are conducting a market analysis, you should never underestimate your competition. Always take into account who is your competing businesses, what is their market share, are they in a better position than you, are they advertising their product in a different and better way, etc.

Question 5 - How can you improve your business?

Well, when you are a market analyst, the company is not going to pay you money just to tell them their problem, right? You also have to give them ways they can overcome these problems. Therefore, your market analysis will also discuss how can the business be improved, how can competitors be burned to the ground, how can you exploit the opportunities and how can you capture a larger market than the one you already have.

Professor, I want to know how can I use this to do my marketing analysis assignment.

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