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Use 10 Questions to Analyse Your Market
The term "market analysis" is often confusing to entrepreneurs, especially
for people who focus on a specific niche or market segment. Is it
something that a small business needs to do? Absolutely - a small business
has less resources to 'waste' then a large organisation - perhaps its even more
important for a small business.
If you've never done a market analysis where do you start? Many small
business owners haven't had this experience before or complain that conducting a
market analysis is too complicated or too expensive. So, lets cover the
basics and give you 10 Questions to ask to move forward.
What is Market Analysis? In the most basic terms, a market analysis is an
assessment of:
- A particular problem or opportunity in a market
- The needs of the target market relating to the problem or opportunity
- Ideas for marketing a particular product or service that fills the needs
of the target market
When Should You Conduct a Market Analysis?
- When you are starting a business
- When you are entering a new market
- When you are considering a new product or service
Why Should You Conduct a Market Analysis?
- To minimize business risks
- To understand the problems and opportunities
- To identify sales opportunities
- To plan your marketing/sales approach
The Process
The process of conducting a market analysis can be divided into three parts.
Part 1 - Understanding Market Conditions
This gives you basic information about your entire market -- the size, the
competition, the customers.
Part 2 - Identifying Market Opportunities
This gives you more targeted information about potential problems or
opportunities in the potential market, and includes information about growth,
current and future trends, outside factors and more information about specific
competitors.
Part 3 - Developing Market-Driven Strategies
Here is where we get into what market research does for you. It helps you to
pinpoint opportunities to grow your business. By understanding the market and
knowing what opportunities are available you can create a marketing strategy
that leaves your competitors in the dust!
10 Questions
Here then are the 10 questions to get you started:
- What is the market I want to reach?
- Who are they? (Basic Demographics)
- What is their biggest problem in relation to this market?
- Are their needs being met by the products or services provided in this
market?
- Who is my competition in this market?
- Are they successful in this market?
- Are they marketing a similar product or service?
- What is the market share of the three biggest competitors in this
market?
- Is there room for growth in this market?
- What is the size of this market?
- Is there room for growth?
- Is the industry growing? Stable? Saturated? Volatile? Declining?
- How is my product or service different from the
competition?
- How can I reach this market?
- How is my competition currently reaching this market?
- Is it the most effective way?
- What are the alternative ways of reaching this market?
- What are the business models of my competition in this
market?
- Are they effective?
- Is there a way to do it differently or better?
- What do customers expect from this type of product or
service?
- What are the core competencies of this product or service?
- What would make the product "new" "different" or "better" for the
customer?
- How much are customers willing to pay for this product or
service?
- What is our competitive advantage in this market?
Knowing the answers to these questions will not only help you figure out if
there is a need for your product or service, it will help you figure out the
best ways to reach your customers, price your products or service and ultimately
make more sales!
So how might you find the answers to some of these questions? The
article
Finding Your Niche will point you at some of the tools you can use to find
answers.
Copyright 2005, All rights reserved.
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