One of the crucial aspects of growing as a company is to understand the ever-changing market. Therefore, it’s critical to conduct regular market analysis to perform your best within and outside the industry.
Follow this guide to conduct a practical market analysis for your small business.
Identify Your Research Purpose
Companies conduct market analysis for numerous reasons. The cause for conducting and implementing this research depends on the industry a business belongs to, the goals it wants to achieve in the long term, the amount of cash flow it wants to increase or improve within a specific period, or the investments it wants to receive from a shareholder.
Regardless of the reason, it’s critical first to determine why you’re conducting a market analysis. Knowing the purpose of your research can better equip you to gauge the latest market trends and comprehend your target market more efficiently. There are two key steps to identifying the purpose of your research.
The first step is listing the internal purposes and external reasons for the research. When you have a significant amount of information about the goals you want to achieve with this research, you’ll be able to estimate the amount of research you should conduct and the research methods you should employ for effective results and findings.
Study Your Industry & its Outlook
Once you have a fair idea of the purpose you aim to fulfill with your research, the next step is to research the industry you belong to. Regardless of your business size and current growth, it’s an excellent practice to know about the current trends in your industry.
You should know some of the details about the industry’s direction, projected global growth, metrics for industry size, and new trends. In other words, the purpose behind studying your industry is to find factual information to support your findings at the end of your research.
For instance, if you have a clothing store focusing on athleisure, you should know the fabric in demand, how leading sportswear and activewear brands are thriving, and what consumers are looking for.
It’s also an excellent idea to derive variables for industries that your research can help you gain a competitive advantage within your particular market.
Highlight Your Target Consumers
It’s not the best idea to focus on everyone all around the world as your target market. Not everyone will be interested in your product or company. Therefore, it’s not wise to waste your time conducting market analysis on an unlikely target market. The key to acquiring effective market analysis results is identifying your target market as efficiently and accurately as possible.
The first step to recognizing your target market is determining who is most likely to purchase your product. Once you get a fair idea of the kind of people who’d be interested in buying from you or the social groups most likely to be attracted to your products, your research should only focus on that population. As soon as you determine your sample population, you should study that particular group by understanding who they are, where they come from, and the factors contributing to their purchase decisions.
Some of the primary factors to consider when determining your sample are age, location, profession, class, interests, needs, political backgrounds, beliefs, genders, societal dynamics, and traditions. A good practice is creating an ideal customer profile to serve your model while researching your target market.
Compare With Competitors
The key to market research success is knowing what you or your company are up against. In other words, it’s crucial to know the measures your competitors are taking to stay ahead in the market and thrive in the industry. It would be best to have a decent idea about their market saturation, what makes them unique, their significance in the market, and their strengths and weaknesses.
While studying your competitors may seem like a challenging task, you can simplify this by listing the leading competitors’ names and conducting a brief SWOT analysis of each company accordingly. These findings will help you identify what your company might be lacking in and the factors that could help you improve your services, allowing more customers to come to you. The aim is to put yourself in the ideal consumers’ shoes to look at things from a different perspective.
Once you’ve conducted the SWOT analysis, create another list to rank the competitors in terms of the least to most threatening. Focus on the most threatening competitors and remember to conduct a systematic SWOT analysis of them to compare your progress with theirs.
Conduct a Final Analysis
Once you have all this information at hand, you must take essential steps to verify that it’s precise and accurate. However, there’s nothing more you can do with the extensive raw data at your disposal until you categorize and analyze it according to the findings’ usefulness.
Therefore, the second last step of conducting a successful market analysis should be creating an analysis by organizing the research into brief sections. Remember to leave out the irrelevant information and include the data that answers your research question or relates to your hypothesis.
Some of the critical aspects of the ideal market analysis are the industry’s overview with its size and growth rate, your company’s projected growth, consumer behavior, purchasing trends, forecasted progress, and the current pricing strategies with a consumer-driven approach.
Implement the Analysis
Once you’ve created the analysis, you have a well-organized set of data and information, sufficient for company improvement and implementation. See how you can use the research and findings to make internal changes to your company. Additionally, gather your team to share the findings and seek their recommendations to make policy changes to improve your businesses and increase profits.
You can also assist other similar small businesses with your research by organizing and publishing it in a readable manner and posting it in the form of a comprehensive document.
While gathering raw data for market analysis is a straightforward process, compiling and analyzing it for further analysis can be challenging. You can now rely on the data entry service provider at 3Alpha LLC for survey data entry services. They help small, medium, and large-sized businesses stay on top of their research with accurate and prompt data entry services. Contact them to learn more today!
The author is a leading researcher and analyst at a public health firm in Texas, USA. She specializes in conducting qualitative and quantitative research for her anthropological studies to address various unanswered health concerns in the world. Additionally, she also contributes to a leading health digest in Texas.