Dimensions of Market Analysis
A market analysis is included in a strategic plan to identify a company’s position and potential. It sets the foundation for a business, organization and marketing strategy. Without a thorough market analysis, a company may not understand how current conditions may affect profitability. These conditions can be any internal or external factor influencing future investments. Dimensions of market analysis include environmental issues, competitive positioning, target audience behaviors and any related factor influencing the success of the organization.
Political agendas, social influences and local economy are environmental factors that are included in a market analysis. These make up a subdivision of external issues, or macro-environmental factors. Micro-environmental factors deal with an organization’s internal position. Examples of micro-environmental factors include the number of employees, department structure, supplies, competencies and budget. Any force that can impact the company is considered an environmental factor. The key to covering this dimension of market analysis is to ask: 1. Who drives the organization? 2. Who or what can benefit the organization? 3. Who or what can hurt the business?
Businesses must evaluate competitors in their industry. Competitors are defined as companies that can produce a similar service or product and serve the same customers. This dimension of market analysis includes noting similarities and differences in key competitors’ strengths. These strengths could be defined in terms of product cost, operational efficiency, brand recognition, or market penetration. Including a competitive analysis supports the case for new opportunities to gain customers and revenue.
Each business targets a group of people who are most likely to purchase their product. Identifying this group based on location, age, gender, income, ethnicity, activities, beliefs and behaviors is part of the target audience analysis. In this dimension of market analysis, people who use the product or influence the purchase decision are included in the target audience. For example, a car dealership may target women 35 to 45 years old as those more likely to drive minivans, although their husbands may ultimately make a purchase. If the car dealership includes women as an influence on car purchase decisions, they may discover creative programs and advertisements that persuade women. In addition, target audience analysis may include more than one group or segment.
SWOT stands for strengths, weaknesses, opportunities and threats. This portion of market analysis establishes a direction based on key issues being addressed. The SWOT analysis examines the internal strengths and weaknesses against the external opportunities and threats. This analysis is a more detailed perspective concerning the business objective, with reference to other dimensions of market analysis.