This is essentially an extension of some of your psychographic information. This piece can even help you better approach analyzing the competition. What are your customers’ likes and dislikes? How do they live? What’s their personality? It’s here that you need to get inside the mindset of your customers, know their needs, and how they’ll react. You may even find that your customer base is segmented based on location which can help you determine where you’ll be doing business. Where are your customers located? A specific country, region, state, city, county, you’ll want to describe that here. If you could paint a picture of your perfect customer, this is where you’ll describe what they look like. ĭescribe your customer’s typical age, gender, education, income, and more. We’ve got a great method for figuring out your market size that you can read about here. Unlike industry size, which is usually measured in dollars, your market size is how many potential customers there are for your product or service. You’ll need to start broadly and refine your research by defining the following elements. This is where you group similar types of customers into segments and describe the attributes of each segment. When you have more than one type of customer, you do what’s called market segmentation. You may find that through the course of your analysis, that you identify different types of customers. This is where you explain who your ideal customer is. Your target market is the most important section of your industry analysis. You should also look up your industry association-they often have a wealth of information on the trends in your industry. Census has excellent industry data available. Are people eating at restaurants more and more over time? Or is the market potentially shrinking as consumers take advantage of grocery delivery services? If you’re opening a restaurant, you’ll want to understand the larger trends of dining out. More importantly, it helps you understand if there’s going to be more demand for your products in the future and how competitive the industry is likely to be.įor example, if you are selling mobile phones, you’ll want to know if the demand for mobile phones is growing or shrinking. Your industry overview shows investors that you understand the larger landscape that you are competing in. This is different than market research, where you are learning about your customers. When you’re researching your industry, you’re looking at all of the businesses like yours. Industry research and analysis is different than market research. You’ll want to include key industry metrics such as size, trends, and projected growth. In this step, you’ll describe your industry and discuss the direction that it’s headed. Now, let’s go into each step in more detail so you know exactly what you need for your market analysis. Pricing and forecast: Your pricing will help determine how you position your company in the market, and your forecast will show what portion of the market you hope to get.Competition: Describe your competitors’ positioning, strengths, and weaknesses.Target market: Who are your actual customers? You’ll detail how many of them are there, what their needs are, and describe their demographics.Industry overview: You’ll describe the current state of your industry and where it is headed.And while diving into market research may seem like a daunting task it can be broken up into four simple elements: Once you have in-depth knowledge of your market, you’ll be better positioned to develop products and services that your customers are going to love. Do it because it will help you build a smarter strategy for growing your business. But, don’t just do a market analysis because you’re developing a plan. Whether you are writing a one-page plan or putting together a detailed business plan for a bank or other investor, a solid market analysis is expected. It helps you understand the volume and value of the market, potential customer segments and their buying patterns, the position of your competition, and the overall economic environment, including barriers to entry, and industry regulations. What is a market analysis?Ī market analysis is a thorough qualitative and quantitative assessment of the current market. It may sound like a daunting and complex process, but fortunately, it’s not. This is where a market analysis comes in. If you don’t have a deep understanding of who your customers are, you’ll have trouble developing products that truly fit their needs, and you’ll struggle to develop a successful marketing strategy. Understanding your customers is the key to success for any startup. How to Conduct a Market Analysis in 4 Steps - 2022 Guide Posted FebruBy Noah Parsons
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