Updated Mar 03, 2022

What Is Market Analysis?

What Is  Market Analysis?

A company can always benefit from learning more about the market in which it operates. Conducting a market analysis is an excellent technique to learn more about a market. There are numerous types of market analysis to select from, which means that organizations can undertake a market study on the components of a market about which they wish to learn more. In this post, we define market analysis and examine seven market analysis approaches.

What is market analysis?

A market analysis is a practice of completing an extensive study on a certain market. Market analysis is commonly used by businesses to determine whether a new product will perform well in a market or if it needs to be tweaked before being introduced to customers. Market analysis may also inform a company on whether it would be good to enter a new market by offering information about how the market works and which businesses succeed in it.

Conducting a market study might entail conducting market research, investigating demographic data and information about rivals, and comparing financial data from a company to similar companies in a market.

Why is market analysis important?

Market analysis is useful for businesses because it can inform future decisions for the company and marketing strategies. A company that wants to introduce a new product to its present market, for example, can use a market analysis to determine what actions it has to take to ensure the product is successful and appealing to the market's consumers. Marketing analysis is particularly important for organizations that seek to enter a new market since it may demonstrate to company management how well their business might succeed based on data from competitors.

7 methods of market analysis

There are seven different methods of market analysis:

Surveys of market research

Conducting surveys to obtain market research is a prominent approach to market analysis. Surveys are a terrific way to get direct feedback from customers about their experiences with a company, a product, or another purchase they make. A market research survey may address questions on a customer's purchasing experience, the usability of a product, or general customer happiness. A corporation can employ a variety of surveys, which can be beneficial by providing a huge amount of data to consider. Here are a few examples of surveys that could be used for market research:

• In-person polls

• Telephone polls

• Mail-in polls

• Online polls

• Email-based survey forms

Interviews with individuals

Personal interviews are another popular way of market analysis that allows businesses to get information directly from consumers. A personal interview usually lasts around an hour and is taped for future reference. Personal interviews can be conducted in person, over the phone, or via online telecommunication. The majority of personal interviews include a list of planned questions as well as unstructured inquiries that allow for open-ended responses.

Companies that conduct personal interviews for market research may pose the same set of questions to several consumers so that they can compare their responses later to uncover any trends or similarities in the consumer experience.

Group discussions

A focus group is an excellent technique to get information for a market analysis from a large number of consumers at once. Gathering a group of consumers in a neutral area and guiding a discussion about a specific product or service is what focus groups are all about. Customers can openly discuss their ideas and viewpoints, as well as converse with other customers who may have had similar experiences.

Most organizations employ facilities with a one-way mirror that allows them to see the focus group while it is taking place and take notes, as well as video and audio recording technology that can record the debate, to collect information from a focus group for market study.

Insights from customers

Consumer observations can help organizations do market research by providing insight into how customers behave when purchasing or using a product. One advantage of performing observations is that it allows a company to acquire information objectively by allowing them to learn about consumer behavior without having to communicate with them directly. This can provide information that is not based on personal thoughts or opinions about an experience, which can assist eliminate bias or consumer impact on one another in terms of testimony.

Many firms use video recordings of customers in their stores to learn about their browsing, purchasing, and returning habits when performing consumer observations.

Field Trials 

Field trials are another excellent way for market study because they can provide information to a corporation about how a certain new product might do in their market. This entails putting a new product on the shelves of a few businesses and watching how customers react. A company can learn details such as how many customers purchase the new product, which demographics of customers appear to be interested in the product, whether the price appears to be accurate, or which elements of the product may require improvement by observing how the product performs in a real-life sales situation.

Participation in social media

Keeping track of social media interaction is a new approach to market research. Social media has grown in relevance and awareness on a global scale as technology has advanced, with many users discussing items and companies on numerous social media platforms. Paying attention to social media involvement can reveal which of a company's online marketing campaigns appear to be the most productive, as well as which goods customers appear to be most passionate about. This can help a business decide how to build future marketing campaigns and which aspects of their brand tend to get the most attention on their social media accounts.

A company may visit the analytics pages on their social media accounts to analyze how many people engage with different types of posts, which demographics appear to interact with the company's pages the most, and which platforms bring the most attention to a company to track social media engagement.

Analysis of competitors

Analysis of competitors is a marketing analysis technique that focuses on a company's competitors rather than its customers. Because completing competitive analysis on competitors can be a technical and sophisticated procedure, many organizations pay professionals to execute these assessments. A competitive analysis is selecting a product or service and examining how competitors succeed in the market while offering comparable products or services. A researcher may assess a company's competitors in terms of sales success, general strengths, and shortcomings, and possibilities to learn from their practices to complete the competitive study.

Bottom line

Market analysis is a diagnostic method that seeks to identify the underlying causes, rather than simply the symptoms, of why markets underperform for impoverished people. A thorough market study can assist you in understanding how the market works and how it impacts the poor. Market research serves as the basic foundation for establishing credibility and designing an intervention. Because markets are dynamic and ever-changing, this basis is not set in stone. Accept that your market intelligence will need to be maintained and updated over time and that your analysis will never be complete.