Market analysis will always be important, but perhaps never more so than now. The coronavirus pandemic has changed the retail landscape so profoundly, that even brands who’ve traded successfully for years are having to reassess and change tactics.
It’s not just the economic environment that has changed; consumer behaviour has too, and it’s vital to get a handle on this in order to be able to plan strategies for things like marketing, distribution, pricing and business development. This is where market analysis comes in.
What is market analysis?
A market analysis is a quantitative and qualitative assessment of a market, providing your business with vital brand intelligence. It can include the market size, various market segments, consumer buying patterns, competitors in the market, and the economic environment.
Market analysis can vary greatly in scope. Research carried out to validate expanding into a new market or launching a new product will be highly detailed and usually take weeks to complete. But brands will also take quicker “pulse checks” to get market data as new trends or market shifts appear on the horizon. Market analysis can also be run annually to aid the planning process at the start of a new trading year.
Using market analysis to write a business plan
Another use for market analysis is forming the backbone of a business plan. A solid business plan is essential if you want to secure financial backing for your brand. The market analysis section of a business plan will define:
- External market conditions – including market size, market trends, growth rate, outlook and barriers to entry
- Your proposition – including market need and how your business idea meets it
- Your target market – including the demographics of your target audience and your anticipated market share
- Your competition – including similar products and a SWOT analysis of competitors’ strengths and weaknesses
- Risks and opportunities – including strategies for exploiting the opportunities and avoiding the risks
Using consumer data for market analysis
A range of market research tools and different data sources are used in the market analysis process, such as census statistics, focus groups or social media, but in this article, we’ll focus specifically on consumer data obtained through online surveys.
Consumer survey data can provide up-to-the-minute metrics that can be more reliable than long-term forecasts, especially when current events are changing the status quo. Getting feedback from real-life consumers can also help you spot new market trends more quickly.
Getting started with market research
DIY survey platforms like Attest make it incredibly easy to get started with market research. You can access more than 100 million consumers in 46 markets, meaning you can reach your target audience in any specific market. Choose from a variety of question types to build your survey and then select your custom demographics.
For a head start, you can use our market analysis survey template and tailor the questions to your needs. You can start receiving survey responses within minutes. And because the interactive dashboard lets you visualise your results, you don’t need to be a market research professional to uncover insights that are vital for your market analysis.
Conducting market analysis for changing market conditions
Market analysis is commonly thought of as a way to validate big new ventures (like international expansion or a business startup) but, actually, there’s huge value in carrying it out to guide more routine business decisions.
Since the start of the pandemic, Attest has seen a large increase in brands running market analysis surveys to gain consumer insight to develop their marketing strategy (including many COVID-19 impact surveys). The data they gather lets them be more agile, ensuring marketing efforts are responsive to changing market conditions – as they’re happening, not a year later when it’s too late.
A market analysis survey can help you discover things like:
- When consumers’ last purchased products or services in your category
- Consumers’ future plans to purchase products or services in your category
- How much they plan to spend and how often they plan to buy
- Which channels they’re using to shop and how they want to pay
- The reasons for any changes to their buying behaviour
- What challenges they’re facing
- Their priorities when selecting which brand to buy
- The brands they’re most likely to shop with
- Their perception of your brand (and your competitors)
- What type of content they want from brands
Having answers to these sorts of questions allows you to make even day-to-day business decisions much more strategically. And it’s especially valuable when there’s turbulence in the market – check out how Gymshark navigated their way through lockdown by using consumer data.
The benefit of regular competitive analysis
It’s not just changing consumer buying habits that brands should be keeping an eye on; it’s their competition too. If you don’t monitor your competitors, you won’t know when they’re gaining or losing share of voice, share of mind, or brand recognition (to name a few). And without that information, you’re not able to take advantage of opportunities – or take action to protect your position in the market.
As we saw in the last section, you can include questions to measure purchase history and purchase intent in a market analysis survey. By going into a bit more detail in your questionnaires, you can identify the brands consumers are buying and the reasons they’re buying them.
What are the traits they associate with your competitors? Perhaps they think another brand is better value, or more exciting, or cares more about the environment? On the other hand, maybe they think your brand is trendier or higher quality. By understanding how your brand is perceived in comparison to others, you can craft advertising messaging to change or build on your image. And this gives you a distinct competitive advantage.
Staying close to your target market
Another advantage of more regular market analysis is the chance it gives you to better get to know your target audience. The more frequently you “speak” to customers and potential customers, the more you come to know about them.
Through a market analysis survey, not only can you collect demographic data like age, gender, race and location, but you can also discover psychographic insight. This includes your audience’s personality traits, their values, attitudes, interests and lifestyles.
This information can be used to support audience segmentation and help you to build out consumer profiles. Being able to identify different customer segments with different motivations means you can target them with marketing specifically designed to appeal to them. Targeted marketing is generally much more effective, so it pays to really understand your target customers.
Achieving business growth with market analysis in 2022
Whether you’re a small business or a big one, industry analysis will be a vital tool for growth in 2022. With the outlook unpredictable, there will no doubt continue to be winners and losers as the economy recovers from the pandemic.
As Charles Darwin once said: “It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.” To make sure your brand survives and thrives, learn how to put consumer insight at the heart of your business decisions with our free-to-download guide to survey creation.