Every business, especially small and medium companies, will need a market analysis for a better understatement of the public to do their research about a target. Your business must have a solid base, where they do their research about products and services. Think about this, 80% of Instagram users have followed a business account, and 87% of mobile consumers use different search engines to address their needs.
That is the main reason to present today a guide for excellent market analysis; it doesn’t matter if you are a newbie or an experienced marketer. This guide will help you have a clear path to understand your product, target audience, and your business area.
What is a market analysis?
It’s the process of collect information about your business buyer persona, target audience, and customers to know how successful a product or service offered by your company would be within those persons. This study will also present where these possible customers are doing their researches, about services and products similar to the ones offered in your business.
The information provided by the market analysis will also show what are the trends nowadays in your industry, what the target audience wants and what their needs are around products and services like yours. It will include what is influencing them to make a decision and buy a product or request a service. There are five types of market analysis, divided into two categories: primary and secondary.
Primary Market Analysis
It is the pursuit of firsthand information about the market and customers. Here it’s regular to use personal interviews, online surveys, phone interviews, focus groups, and others to obtain live details on what your possible buyers want, with the brand awareness of your business. Here you can segment the market and defined the buyer persona with two types of research:
– Exploratory research: this is about potential problems that will arise and must be deal with as a team within the company. Usually, it is used as the first step in any market analysis because it can be done with open-ended surveys and interviews with a small number of persons.
– Specific research: this is the next step after the exploratory research, and it follows problems and more important opportunities that the business knows to be key to success. Here the marketing team can find a specific segment of their target audience and ask questions about problems around their needs.
With this research, the marketing team can use data and public records at the disposal of everyone, to make conclusions. You can find industry content, market statistics, trend reports, and the sales data from your business. Secondary research is perfect for analyzing the competition. These are the three types of secondary research:
– Public sources: these are the most accessible material and data while doing a market analysis. Usually, these are free to read, which is a plus for the analysis budget. The most common sources are Government statistics, for example, the U.S. Census Bureau and the Bureau of Labor & Statistics. Both can offer information about industries nationwide.
– Commercial sources normally are market reports that comprise industry insight compiled by research agencies such as Pew, Gartner, Forrester, and others. Typically to obtain this information, you will need to spend money, so try to have a good budget for the analysis.
– Internal sources: many times, these sources don’t receive the recognition they deserved, because it is the data that the business already has inside. Some examples of internal sources are average revenue per sale, customer retention rates, and other important information about new and old accounts. It will help the marketing team draw conclusions about what your clients want.
How to make a market analysis?
Of course, the market analysis is important for every business and their marketing teams, but it is sometimes more important to know how to do it right! Check out how to do it step by step.
Define your buyer persona
Above all, every marketer needs to understand who their customers are, even before knowing how and what they buy, to begin the primary market analysis. A buyer persona is the fictional representation of the ideal customer. It comes in handy to visualize the audience, set up the communications, and design a strategy.
These are the key characteristics to include in your buyer persona:
– Job titles
– Family size
– Major challenges
The principal point here is that this fictional persona will be the guide to learning about real customers in the market. The marketing team can use templates and tools to create buyer personas that will help organize audience segments and collect the right information. Just make sure to be thoughtful about that persona when planning content and campaigns.
Identify a portion of that persona to engage
Now that the buyer persona is created, it is time to find a representative sample of the target customers to understand buying habits, characteristics, and other points. They should be persons that recently made a purchase or decided not to make one. The principal ways to meet them is through:
– Focus groups with talks in-person.
– Doing an online survey.
– Individual phone interviews.
Some tips to get the right participants for the market analysis are:
– Ten participants per buyer persona, even when it is recommended to focus on one buyer persona if the team research multiple personas, it is better to recruit separate groups for each one.
– People who recently interacted with the business; this is because the questions will be very specific. It’s important to have fresh experiences, not longer than six months up to one year.
– Mix the participants; the group will be perfect if you can find your own clients, customers from the competitions, and people that didn’t purchase anything at all, this can develop a balanced view of the market.
Engage your market analysis participants
Regularly, marketing research agencies have panels of people when conducting an analysis. But individual marketers of small marketing teams don’t have that luxury. However, recruiting people exclusively for the study can lead to better participants. Check out these points:
– Make a list of customers that made a recent purchase; you can use a system that is becoming popular nowadays or work together with the sales team to get a list.
– Now focus on the list of potential customers, these can be clients from the competitors or persons that decided not to buy. This list can be obtained with any system that the sales department is using to track deals.
– Find participants in social media, contact persons that follow the business accounts but aren’t buying from you. There is a huge chance that few of them can talk with the team and explain why they don’t buy the product or service.
– Make a network, pass the word that your team is conducting a market analysis to your coworkers, LinkedIn connections, and former colleagues. Even when they don’t qualify with the buyer persona type, one of them can know more people that do qualify.
– Pick an incentive; people that will participate in the market analysis can feel more motivated if there is an incentive for them, but even if you are on a tight budget, be creative, reward the participants with free content or services.
Prepare the research questions
To get the most of the conversations within the analysis, you will need to prepare the questions before. This doesn’t mean that there will be a script, whether it is a focus group or an interview; the discussions should be natural and conversational to get better information.
And the best way to get the precise information is with open-ended questions, forget yes/no questions, they will never help to understand better the target audience. Check out these points for an in-person or phone interview:
– Background information: here, you can ask the typical information, but also fun facts about them to make the interview warm, about their jobs, lives, responsibilities, or challenges.
– Awareness: with this part, you want to know how they had a challenge or problem that needed a solution, whether or not they about the brand is not important here. So, present questions about the problem or need.
– Consideration: this part is all about the potential solutions for the problem or challenge that the participant is presenting. Ask about search engines, websites visited, magazines, people consulted, and others to have a good view of how they want to resolve the problem.
– Decision: here, the question must be focused on the decision to choose a product or services that will help with the solution of the challenge or product and the characteristics of their experience with them.
– Closing: This is about wrapping up the interview or process, knowing what could have been better for the participants. This is about their buying process and how they want to improve that process. Of course, never forget to thank them for their time and participation.
List your primary competitors
With this point, you can start the secondary market analysis, but keep in mind that competition isn’t simple as one company vs. others, a division of a company can compete with your main product. For example, Apple’s main products are its devices, but its music division, known as iTunes, competes with Spotify, a music streaming service that doesn’t produce devices.
This shows that a product or service from a company can overlap yours, even when it’s not quite the same thing, but the target audience is the same. To identify those competitors, you must determine the industry or industries that you are pursuing; that way, you can create a list of possible competitors that belong to that industry.
The best way to find that list is by using social media, market reports, search engines and even comparing your search results with those of your buyer persona from the primary analysis. You can know lots of things about the companies that appear in the searches, just a few days of dedication can present the competitors.
Summarize your findings
If you and your team are feeling overwhelmed with all the information that now you have, it will better to create a list of items for a report. You should use your favorite presentation software to add quotes from participants, diagrams, and even videos and pictures. Here is a basic outline:
– Background: the goals and reasons to conduct this market analysis.
– Participants: the persons that participate in the analysis, each group by persona and customer/prospect.
– Executive summary: the things that the team learns and the most interesting facts.
– Awareness: the common points that impulse people to participate in the analysis.
– Consideration: main themes and detailed sources that the buyers use.
– Decision: how the buyers made a decision and the influence that any product or service offered, with information to make or break a deal.
– Action plan: the analysis presents a few campaigns to run by your brand to get to the target audience effectively. Provide here a list for an action plan about campaigns.
Going with a market analysis can be a very interesting and productive experience for the company. It doesn’t matter if you think that your target audience is defined; the analysis will always discover new things, trends, and problems. It will help to improve campaigns and even processes and departments within the company.
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