Market Analysis is important for 4 compelling reasons
In this article, Market Analysis is important for 4 compelling reasons to you and your future. A Market Analysis exercise should be at the centre of any successful marketing and advertising strategy.
However, it's incredibly common for companies to fail to do any Market Analysis or just give the exercise lip service and complete a couple of paragraphs to keep everyone happy. But a functional Market Analysis is not just confirming a hunch with a considerable dollop of cognitive bias scooped on top. Market Analysis will offer the answers to businesses hardest questions. Questions like:
- How competitive is the market landscape?
- Who are our actual customers?
- Is it risky to enter a particular market?
- How successful has our branding strategy been?
What is market analysis?
Market analysis is a quantitative and qualitative examination of your external environment and the resources you have at your disposal. Thorough Market Analysis will give you a picture of the size and value of opportunities open to you, the risks involved, potential customer purchasing behaviour, the competition, and the known entry barriers. Here are 4 compelling reasons why Market Analysis is essential to you:
1. It provides you with a map
Marketing Analysis doesn't let you know how to position your brand or how to run a marketing campaign. However, it does provide you with a route through the choppy waters, obstacles and barriers that could get in the way of getting to your destination, Without it, you could hit the rocks, and you will ultimately fail.
2. Puts the customers at the centre of your planning
Market analysis isolates your offering to make you design it for what your customers are buying it for. Not what you think why they are buying it. The following Theodore Levitt quote excellently sums the point up. "People don't want to buy a quarter-inch drill; they want a quarter-inch hole." Once you discover why a customer buys from you, then you will be onto a winner. In our business, we offer Competitive Intelligence, but we realise that our clients are appointing us to solve their problems. They don't care how we do it; they just want answers and options.
3. Market Analysis also looks inward
Market Analysis can keep an ego in check. We hear this sort of thing a lot. "Why would I need Intelligence when I know everyone in the industry. What I don't know is not worth knowing". When you have built your product from scratch, and you live and breath it every day it is incredibly challenging to be genuinely objective. After all its cost you thousands, sleepless nights and it's your baby. Market Analysis answers questions like "Why do consumers use us?" You will also find customers will not buy because of what you do, but why and how you do it. And you need to understand this yourself before expecting customers to.
4. What's your USP?
A Market analysis exercise helps you to determine how to effectively differentiate yourself in your chosen market effectively.
- Brand - How does your brand differentiate you from the competition? Does your brand resonate with the consumers you want to attract? What's the story about your brand?
- Audience - Some products and services can be focused on specific types of people. A particular group, type of person or age group. Like organic or vegan food you will find customers are often willing to pay more for your product for the experience.
- Service - Some differentiate themselves by their service offering. It is usually associated with exceptional customer service. First Direct bank in the UK is an excellent example of this exceptional customer service. They are owned by HSBC who offer a more standard service but differentiate themselves differently. Any idea of how HSBC differentiate themselves? Let us know what you think.
In this article, we have defined 4 compelling reasons why Market Analysis is essential to you and your future business. Market analysis should be at the centre of any successful marketing and advertising strategy. To determine your entry point and your USP is very important if you want to create a sustainable business model.