What is Marketing Analysis? 7 Dimensions for Every Market

PESTLEanalysis Team
PESTLEanalysis Team
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Table of Contents
Table of Contents

A marketing analysis is a study of the dynamism of the market. Its purpose is to formulate a strategy on how to run your business efficiently.

A marketing analysis is a study of the dynamism of the market. It is the attractiveness of a special market in a specific industry.  Marketing analysis is basically a business plan that presents information regarding the market in which you are operating in. It deals with various factors and should not be confused with market analysis.

A marketing analysis is done so that you can formulate a strategy on how to run your business. By taking into consideration certain factors, you will know how to operate your business.


What are the Marketing Analysis Factors?

The most common factors are the SWOT which is an acronym for; Strengths, Weaknesses, Opportunities, and Threats. By assessing the company’s strengths and weaknesses, you can make a strategy on which factors to focus upon.

If you have a good labor force, ample investment and good advertising experts then you are going to make your marketing strategy focusing on those things. Similarly if your technology is comparatively poorer and you lack online presence then you are going to avoid those things.

You also look at external factors like situations which may provide you with an opportunity or threat.  Economic factors, political instabilities or even social changes can give you opportunities which you can seize and do better. They can also create threats which are going to hamper your business dealings. Considering all these factors will give you a marketing analysis from which you can implement your decisions.


Dimensions of Marketing Analysis

There are certain dimensions which help us to perform a marketing analysis. These things help us understand the market we operate in better. These dimensions include;

  • Market Size
  • Growth rate of the market
  • Market trends
  • Market profitability
  • Key success factors
  • Distribution channels
  • Industry cost structure

Market Size

The size of the market is a key factor in a marketing analysis. The bigger the market the more competitors you are likely to have. For a big market, you need to make sure your products and services stand out. Otherwise, the customers can easily switch to a rival product. Not only that, a bigger market makes you rethink your pricing policy.

Set your price too high then you are going to lose your customer base to other competitors. Set it too low and people will think that you are just providing cheaper poor quality goods. If the market size is small then you can get away with charging a high price. All these facts are kept in the marketing analysis. Based on that you go ahead with your marketing plan.

Growth rate of the market

The market growth rate is a huge factor in any sort of marketing analysis. This is because you get the idea of how long the said market will last. Before you make an investment you need to analyze the market's growth rate. If it is likely to grow over time then you can invest more in it. If it has no growth then you are likely to be discouraged from investing anything at all. How much time and importance you give to the market depends on its growth rate.


Market trends are a significant part of the marketing analysis. Having knowledge about the trends help you to decide what kind of product you are going to sell. When you are starting off a business you need to know what the current trend is. What is the thing that the customers like? How much they are willing to spend? What other trends may capture their attention? These are the sort of things which will go on your analysis.

On the other hand, market trends can change any day. This can turn out to be an opportunity for your business. If that’s the case then you can seize it and make the most of it. Changes in trend can also be a threat for you. If you are comfortable producing one kind of good then a market trend change will affect you the most.

Market Profitability

Most companies’ motive to get into the business is to make a profit. In other words, they are profit-motive businesses. So before getting into a business you need to analyze the profitability of the market. If the market has a good profitability then only you are going to invest heavily. Otherwise, it would be a waste of your time and capital. In order to calculate the profitability of the market, there are a few things one has to consider. These things include; buyer power, supplier power, barriers to entry and so on.

Key Success Factors

The key success factors are those elements which help the business to achieve great success in the market.  Such elements are required to stand out among the rest of the competition. These are things which you did well that have enabled you to produce great results. Key success factors include;

  1. Technology progress
  2. Economies of scale
  3. Efficient utilization of resources

Distribution Channels

Distribution channels are very important for a business. Without those, you won’t be able to get your products to your customers. So it becomes a big factor in a marketing analysis. This is because you need to assess how well the channels are. If the existing ones are good enough or you need to develop newer ones. Sometimes you come up with brand new channels like online marketing.

Industry Cost Structure

The industry cost structure is a significant factor while running a business. It basically sees how much cost is required to get your products for sale. Sometimes firms can come up with ways to decrease that cost and thereby make a bigger profit without increasing the market price. However, if your business doesn't have the capital to get costs down, you can finance the margin in the short term. You can use business loans, personal loans, credit, or equity loans.

Doing a marketing analysis will help you to come up with newer ways to reduce cost. At the same time, it helps to create strategies for developing competitive advantage of your rivals.

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