Market analysis is an important part of product branding and consumer satisfaction. It allows a producer to understand their target market that ensures that the product will make numerous sales.
A marketing analysis is a study of the dynamism of the market. It is the attractiveness of a special market in a particular 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.
Market analysis is a composition of different factors that affect the product. The following is a comprehensive list of material to include in your market analysis;
- Industry Description and Outlook – Describe your industry, including its current size and historical growth rate as well as other trends and characteristics (e.g., life cycle stage, projected growth rate). Next, list the major customer groups within your industry.
- Information About Your Target Market – Narrow your target market to a manageable size. Many businesses make the mistake of trying to appeal to too many target markets. Research and include the following information about your market:
- Distinguishing characteristics – What are the critical needs of your potential customers? Are those needs being met? What are the demographics of the group and where are they located? Are there any seasonal or cyclical purchasing trends that may impact your business?
- The size of the primary target market – In addition to the size of your market, what data can you include the annual purchases your market makes in your industry? What is the forecasted market growth for this group? For more information, see our market research guide for tips and free government resources that can help you build a market profile.
- How much market share can you gain? – What is the market share percentage and number of customers you expect to obtain in a defined geographic area? Explain the logic behind your calculation.
- Pricing and gross margin targets – Define your pricing structure, gross margin levels, and any discount that you plan to use. When you include information about any of the market tests or research studies you have completed, be sure to focus only on the results of these tests. Any other details should be included in the appendix.
- Competitive Analysis – Your competitive analysis should identify your competition by product line or service and market segment. Assess the following characteristics of the competitive landscape:
- Market share
- Strengths and weaknesses
- How important is your target market to your competitors?
- Are there any barriers that may hinder you as you enter the market?
- What is your window of opportunity to enter the market?
- Are there any indirect or secondary competitors who may impact your success?
- What barriers to market are there (e.g., changing technology, high investment cost, lack of quality personnel)?
Regulatory Restrictions – Include any customer or governmental regulatory requirements affecting your business, and how you will comply. Also, cite any operational or cost impact the compliance process will have on your business.
Sourced from: https://www.sba.gov/content/market-analysis
Market Size – The size of the market is a critical 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 inferior 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.
Market Profitability – Most companies’ motive to get into the business is to make a profit. In other words, they are profit-motive businesses. Therefore, 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 cost-effectiveness 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.
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