A market analysis is an organized way of analyzing market opportunities, identifying consumer needs and developing new products or services to meet those needs. If you are an entrepreneur, conducting a market analysis is an important part of starting your business. Likewise, established businesses conduct a market analysis when introducing a new product or bringing an existing product into a new market.
Determine the market you'd like to reach, and gather as much information about that market as you can. Look for demographic data, such as age, geography and income level. Information on the buying habits of your target market is also useful if you can find it.
Identify problems faced by your target market related to your products or services. Even if you don't yet have a specific product or service in mind, you can use this step to narrow down business possibilities to those that would be most viable in this market.
List any existing products or services that meet or attempt to meet the needs you identified in Step 2. Note any shortcomings of each product, such as the price, effectiveness or ease of use.
Analyze your competition. Research other businesses currently offering solutions for the problem on which you're focusing. Judge whether your competitors are successful in the market, what specific market they are targeting and strategies they use to reach the target market.
Find out what customers expect from this type of product or service. Conduct market research or search for online reviews of similar products. This will provide valuable insight on specific features your target market would like to see, which you can incorporate into your new or existing product.
List methods you could use to reach your target market. Think of marketing strategies your competition is not currently using, or improvements upon the strategies they use. Find a way to solve the same problem in a better way.
Identify your unique selling proposition. This is a feature or benefit of your specific product that differentiates you from your competition, and it is the primary point you'll want to get across in your marketing messages.
Your analysis may indicate that your product won't do well in your target market. You then have the opportunity to modify the features of your product before introducing it to the market, or to modify your target market if you find another consumer group that would have an interest in your product.
- Your analysis may indicate that your product won't do well in your target market. You then have the opportunity to modify the features of your product before introducing it to the market, or to modify your target market if you find another consumer group that would have an interest in your product.