Market Analysis is conducted to create understanding about the target population, market segmentation, and opportunities for growth and market trends for a particular business. In order to develop a strong marketing strategy and a good business plan, you have to conduct market analysis.
Mostly, market analysis involves a lot of field work which is to be done in order to get the necessary data which is later interpreted and presented in the form of graphs and tables. However, some market analysis can be done without involving any kind of field work for instance if you are doing an analysis of financial market trends for the last five years, you don’t have to pursue any field work as you can easily get the required data (secondary) from various sources. Furthermore, for some market analysis there is a need to conduct field work as well as secondary research.
If you are aiming to conduct a market analysis of your business, you can follow the given steps.
First of all, you have to identify the sources from where you are going to collect the data for analysis. You can use the secondary data collection sources which may include financial statements, publications, magazines and various reviews of the markets or you can go to the field to collect the data (primary) directly from the respondent. Generally, a combination of both the data types is used for market analysis.
After identifying your target market, you have to divide it into various segments (according to age, gender or other demographics). Market segmentation is one of the most important components of conducting a market analysis as it makes it easier to study the patterns of consumers’ needs and wants. After dividing the market into various segments, you have to identify the segments on which you are going to focus. Then, study the needs of customers which fall in those segments.
Market size and potential for growth
It is very important for you to identify the characteristics of the market so as to develop good understanding about the prevailing competition. Furthermore, it will also help in assessing the potential for growth in that market in the future.
One of the most crucial decisions regarding any business is to foresee the future of the market by assessing its trends. For instance, the trends in technology market show that there will be dynamic changes in technology devices in the near future.