Why your business should conduct a marketing analysis
Whether you're just launching your business or merely adopting a new marketing strategy, it's crucial to conduct research and analysis into your market. Conducting marketing analysis can help you determine the landscape of your market, and as a result, prepare a suitable strategy. An analysis might involve both qualitative and quantitative research, and the information can be collated into a marketing report. Consider the following factors when conducting a marketing analysis: Market size The size of your target market is extremely important, as this will have an effect on your levels of output, costs of goods and the price you choose to charge for your goods or services. If you're targeting a niche market, it's likely you will be able to increase your price if your product or service is a specialty. However, the advertising channels you decide to use will likely be more targeted and direct. Alternatively, if you're targeting a mass market, you're likely to use different approaches such as mass media to ensure you reach a wider audience. Market growth rate Identifying and understanding the trends and growth of your market is key when developing your strategy. A slow growing market can deter competitors from entering. A market that is growing too fast, however, will likely see a shakeout that will lead to weaker players being eliminated. Therefore, it's important to accurately assess the growth rate to determine if your business can succeed based on the level of forecasted growth. Market profitability Much like growth rate, it's important to understand whether or not a market is profitable. It's important to be able to forecast the profitability of your market based on supplier power, buyer power, barriers to entry, supply and demand etc. While it may not be profitable immediately, it's important that profitability is foreseeable in the future, otherwise it may not be worth investing in this market. Through research and thorough marketing analysis, you'll likely gain a broader understanding of the market. This gained knowledge is necessary to help you build effective strategies for your business.