Regular market research is an indispensable part of the activities undertaken by large companies. Their purpose is to obtain information on competition, growth potentials and consumer trends. How do you carry out a proper market analysis and why is it so important? 
Many companies forget how important it is to monitor the current situation of the market environment. Usually, the implementation of this type of activity also entails costs to be borne by the company. Saving in this area, however, can lead to significant losses. Without knowing the current needs of potential customers, funds can be lost by launching a product that will not be of sufficient interest.
What is market analysis?
Market analysis is an extremely broad concept. It includes all activities leading to an understanding of situations related to market processes, behaviour and relationships. In simple terms, it is about gaining information that minimises the risk of loss from a company's actions. Market analysis is directly related to demand, supply and the relationships that exist between them.
It is worth remembering that such a study is not only about the current market situation. It often makes it possible to anticipate, to some extent, changes that will occur in the near future. Such an assessment is called market forecasting. It is carried out on the basis of current events or data from previous years.
When do we analyse the market?
The first market analysis should be carried out even before the start of the business. This will verify the company's chances of success in the market. Knowing the competition and the opinions of potential customers helps to determine the right price for the product or service and to set prices.
In the later stages of a company's operation, a market analysis should precede any venture or investment that may significantly affect the existing operation of the company. For example, the expansion of an offer or area of operation, or the implementation of a new marketing strategy.
Market research methods
Today, there are many tools with which we can carry out market research. Four basic methods can be distinguished among them:
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SWOT analysis
A SWOT analysis aims to identify the strengths and weaknesses of any company or business. It assesses the opportunities and threats associated with the company's activities. It takes into account both the internal state of the company and the prevailing market situation.
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Product life cycle analysis
The purpose of a product life cycle analysis is to estimate the point at which a product is currently in existence and the time at which the product will be available on the market. The sequence is often compared to the human life cycle - a product is born, grows, matures and then dies. The duration of its presence on the market is usually determined by demand.
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Portfolio analysis
Portfolio analysis involves gathering information on the size of the market, its capacity, dynamics and the share a company has in a particular market category. It allows the planning of an appropriate growth strategy for the company. It is aimed at increasing profitability as well as gaining a competitive advantage.
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PEST analysis
The PEST analysis is a kind of complement to the SWOT analysis. It involves the juxtaposition of political, economic, socio-cultural and technological factors, and sometimes also environmental and legal factors. Macro-environmental analysis allows you to determine what has a key impact on the operation of your business, so it is worth performing even before you start your business.
We obtain a great deal of information about the market through consumer research. Surveys and in-depth interviews are an extremely effective, yet simple form of outreach. Opinions, as well as the needs of customers, are ultimately a key element in making decisions about offers.
Why perform market analysis?
Market leaders often allocate a large part of their budget (included in the business plan) to research of all kinds. Although this is very costly, it avoids the losses caused by acting blindly. It is worth noting that the costs of an advertising campaign or a new product launch are considerably higher than the cost of such a study.
With a market analysis, you can find out what actions you should take to prepare the right offer for potential customers, how to define your target group, and what price to set for your services and products. This will help you avoid mistakes that will slow down your business and expose you to unnecessary stress and financial losses.
Most often, market analysis is outsourced to external marketing research and consultancy companies. So if you are not sure whether you can handle conducting the research yourself, it is essential to seek the help of specialists. This will quickly provide you with an answer to the question of what strategy you should adopt at a given stage of your business development.
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