Your market analysis will cover your industry, brand competitors, target market, the aim of your business, and the external factors which will directly affect the growth of your business.
Here’s why they’re necessary in your market analysis.
1. Industry coverage
It goes without saying that you’re expected to know your industry inside and out.
Ask plenty of questions and answer each one. Specifically, answer the following:
- The projected growth of the industry
- What is the estimated life cycle of this industry?
- What direction is your industry headed?
- Big name competitors (brands and individuals)
- Leading industry news (trends, statistics, case studies and white papers)
- What do people expect from your industry?
It’s a vast area to cover but the backbone of any business analysis.
2. Your target market
Customers are everything. In order to sell to them you need to understand their ambitions, goals, where they hang out, what they need and what they think they need. The biggest piece of advice: narrow down your target market.
You can branch out later. But if you start by thinking everyone is a potential customer you’re making a huge mistake. Trying to reach everyone will water your message down. And your marketing with scream superficial.
It’s scary to ‘limit’ yourself by selecting a group of people but it makes your targeting much more effective. This way you don’t have to jump into the mind of every person. Just the people who will buy your product; the people who matter.
3. The aim of your business
You start with one big goal. This goal is the driving force behind starting your business.
But it’s the smaller goals that encourage growth. Make your goals monthly, quarterly, and yearly. And to accurately measure success rates, be specific.
- Increase customer acquisition by 5% in Q1.
- Reduce the price to sell the product and what it costs to make said product by 10% this year
- Expand shipping areas into 3 nearby States to broaden outreach by 2018
In your marketing analysis, include specific goals that can be measured with numbers and data. You’ll refer back to the analysis frequently.
4. Keep track of external factors in your market analysis
External factors directly affect your business. But you can’t change them, only how your business responds. Use additional analysis to hone in on which factors will affect you. PESTLE analysis is perfect for this.
PESTLE analysis examines six critical outside factors that will affect any business:
Examples to get your head in the right place…
Political factors: State and federal taxes can’t be escaped. But the amount differs by region. As does minimum wage, which can increase or decrease business expenses for hired employees.
Economical: Interest rates or changing trends in your industry will influence the state of your business.
Social: Buying habits, lifestyle changes, and social classes affect the buying and selling rate of products.
Technological: Enhancements in technology can change how you sell products or how to manufacture products (affecting pricing rates).
Legal: Laws and bills coming into effect may affect customers who buy your products.
Environment: The specific location of your customers can change how they interact with your product and your company.
You can’t decrease taxes or adjust minimum wage. Or any other example from the above list. But they can and will affect the growth of your business, especially if they’re not factored into your market analysis.
But by including these factors, plus industry information, goal metrics, and target market into your market analysis, you’ll have the key components for a well thought-out analysis.
Image: Billion Photos/Shutterstock.com