The Guide on How to Analyze a Market with Market Research Software

The Guide on How to Analyze a Market with Market Research Software

analyze a market

How to analyze a market is a legitimate business concern. After all, it would be unwise, if not downright dangerous to engage in any business operations without understanding the state of your market and all of its components.  

With the plethora of insights available through secondary market research, it can be difficult to understand where to begin on conducting a market analysis. It is especially hard to cut through the noise when there are so many sources at your disposal.  

Nonetheless, analyzing a market is critical for understanding how a business’s products and practices will exist in certain markets. It also brings insight into the heart of any business: the customers. 

63% of consumers expect businesses to know their unique needs and expectations; 76% of B2B customers expect the same. Analyzing a market will shed light on consumers, along with the market at large.

This article is centered around how to analyze a market, the concept of market analysis and how to use market research software to strengthen your analysis. 

Understanding the Concept of Market Analysis

A market analysis is a quantitative and qualitative assessment of a particular market

It involves observing the size of a market both in volume and in value, various customer segments, customer buying behavior, the competition, the economic environment, such as barriers to entry and regulation, supply and demand and new markets.

A market analysis is designed to be a thorough assessment of a market within a specific industry. It also involves studying the external factors that will directly affect the growth of your business. To this end, it involves examining the market in relation to the aims of your own business.

With this analysis, you’ll look into the dynamics of your market and various critical components. A precise marketing analysis should include the following topics: 

  1. The size of your target market
  2. Your main competitors, their offerings and marketing practices
  3. Your potential customers and their various segments and customer personas
  4. Your customer behavior
  5. Acceptable price points and ranges for your product for your target market
  6. Your competitors' strengths and weaknesses
  7. Industry barriers, rules and regulations

How to Analyze a Market 

Analyzing your market is a multi-step process that you can benefit from if you conduct it correctly, which involves covering all areas of the market. While this may appear to be time-consuming and difficult, studying each factor at a time and following the process gradually will ease the process.

Additionally, there are various tools you can use to soothe the process, along with deriving valuable insights for your market analysis. 

The following is a step-by-step guide on how to analyze a market. It will help if you seek how to do market research for a business plan, bolster your strategic planning process, use data for decision-making or generally validate any of your business actions. 

  1. Determine the purpose of your analysis.
    1. While a market analysis is a comprehensive process, your business may be more in need of a particular analysis, which is where it should focus on.
    2. There are many purposes and sub-campaigns you can conduct for your analysis, such as: gauging your competition, understanding a new market, finding product innovations, being acquainted with laws and more.
    3. Determine your purpose as soon as possible, as it will guide your market analysis.
    4. Begin by deciding whether your purpose is internal, such as to improve your cash flow or business operations, or external, like gaining a business loan. 
  2. Research the state of the industry.
    1. In this step, you’ll need to describe the state of your industry and where it’s headed.
    2. Use secondary resources to study its trends, size, projected growth, in-demand product and services and their innovations.
    3. Use secondary sources such as industry news sites, blogs, for industry reports, Ubersuggest for top industry players and SEO analyses and research associations such as Forrester
  3. Identify your target market and segment it.
    1. This analysis will point you to your ideal customer(s). 
    2. First, use some of the secondary research from Step 2, but to find the target market associated with your niche and business.
    3. You’ll need to understand your market size, who your customers are, where they live, their lifestyles and what might influence their buying decisions. Study the following factors:
      1. Age
      2. Gender
      3. Location
      4. Occupation
      5. Education
      6. Needs
      7. Interests
      8. Marital status
      9. Behaviors
      10. Views on current events, cultural trends, your industry, its competitors, etc.
    4. Next, segment your target market into smaller groups via market segmentation
    5. Consider creating a customer profile or persona that represents your ideal customer to serve as a model for your business campaigns.
  4. Study your competition.
    1. You’ll need a strong grasp of your competitors, as this will ensure you can take advantage of their weaknesses, which you can then use to show your target market why your business is the better choice. 
    2. Gather insights on both your direct and indirect competitors from the secondary research you conducted in a previous step. 
    3. Study the following aspects of your competitors:
      1. Market saturation
      2. Market capitalization
      3. Strengths, weaknesses, advantages and hurdles
      4. It will be useful to conduct a SWOT analysis on several competitors.
    4. Establish how your competitors are different from your business. Note the strengths you have to prevent new companies from competing with you.
      1. For example, a better location, business patents, lower prices, a better rewards program
    5. Rank your competitors from least to most threatening and use this document when comparing yourself and innovating on new products, services and experiences.
  5. Conduct further analyses in relation to your business.
    1. Learn how to perform a SWOT analysis on your own business; use it and compare it with that of your competitors, especially the ones you’ve run such an analysis on in Step 4.
    2. Form more granular analyses on your market, economy and consumers by using these secondary resources:
      1. U.S. Bureau of Labor Statistics
      2. U.S. Census Bureau
      3. State and local commerce sites
      4. Trade journals
      5. Use an online survey platform to distribute surveys to members of your target market and gain their thoughts on the market, along with their needs, wants, shopping habits and more.
  6. Map out your own products and prices.
    1. Consider your price; is it on the lower or higher end of the price range in your niche, or is it somewhere in between?
      1. To this end, mull over the message that your price sends to your market at large.
      2. High prices are usually associated with quality. You’ll need to make sure that your marketing signifies that you offer a high-quality product or service if you intend on using high price points. 
      3. High-priced goods and services need to come with a high-quality customer experience (CX).
      4. If your prices are lower on the spectrum, relay that in your marketing messages so that consumers will know you’re the low-priced brand. 
    2. Forecast your initial sales volume.
      1. After you categorize your pricing and map out a pricing strategy, assess how much you expect to sell. 
      2. Prior industry research will come into play in this step as you think about how much of the broader market you expect to capture. 
      3. You’ll need to examine factors such as location, niche and your target market to understand how much they typically spend to predict your sales.
      4. Your forecast should be a realistic portion of the total spending in your particular niche. Be realistic, as you won’t gain 50% of the market during your first year.
    3. When you create your forecast, use it as a business goal. Compare your actual sales with your forecast. 
      1. Tracking your progress will help you adjust your strategy accordingly and avoid sales disparities between your forecast and actual sales in the future.
  7. Analyze your data.
    1. After you finish collecting all your relevant data and ensuring its accuracy, analyze it so that it is actionable to your company.
    2. Organize your research into distinct, digestible sections, especially in a way that is specific to your purpose, target market and competition.
    3. Use the following elements to organize your findings:
      1. An overview of your industry's size and growth rate
      2. Your business's projected market share percentage
      3. Customer buying trends
      4. An industry outlook
      5. Your forecasted growth
      6. How much customers are willing to pay for your products or service
  8. Act on your analysis.
  9. After putting the final touches on your market analysis, use your research and findings to take action on business. 
    1. Use the intelligence of other businesses doing the things that you can implement in your business. 
    2. Implement marketing strategies that you’ve found to be effective in your analysis.
  10. Test your analysis and form hypotheses that you can use for correlational, causal and experimental research, if need be. 
  11. Take action on your findings by forming marketing, sales, PR and market research campaigns.
  12. Iterate different actions to see which garner the best results. 
    1. Apply survey research for all your iterations and further research endeavors.

How to Analyze a Market with Market Research Software

Market research software carries plenty of weight beyond market research alone. In fact, it powers many of the activities within a market analysis. As such, you can apply it to virtually any of the steps in the previous section, as long as they are relevant to the topic at hand and you know the population to study.

This is because surveys bring you direct intelligence into your target population. They allow you to frame your own inquiries so that you gain the exact insights you’re seeking. They also provide a means of standing out from your competitors, giving you the added edge of studying virtually any demographic, should the online survey platform you use allow it.

As such, you’ll be powered with original insights which you can then apply to your content marketing strategy, your PR market research study and virtually all other areas in which you can put original insights to use. When it comes to properly executing business initiatives, you’ll find that most campaigns benefit from original survey data, given how much you can fine-tune your survey to your intelligence needs.  

Then there’s the aspect of market research, the original space that makes use of survey software. Not to be confused with market analysis, market research focuses on studying a particular market with a focus on the customers in it. It is a major component of market analysis, however, as customers are the lifeblood of any business.

As a matter of fact, 52% of consumers (and 65% of B2B buyers) say they’re likely to switch brands if a business doesn’t personalize to them. Brands can only personalize to their target market effectively if they know who their customers are. This involves far more than greeting them by their name when they sign into a website. Businesses must be attuned to their behaviors, preferences, aversions and needs. Market research software such as an online survey platform is the ideal tool to use for tracking and using customer data

Whenever you’re curious about moving forward with any business activity, whether it is forming a new product innovation, launching a product or producing an ad campaign, you can always rely on using surveys to put your ideas to the test. 

An online survey platform provides you answers to any of your curiosities from your consumers themselves. However, a strong market research platform will grant you access to surveying anyone, from your customers, to your vendors, to your competitors.

Winning Over Your Market

Analyzing a market is no simple feat. However, by following the steps in this guide, you are set to form a data-rich market analysis. To reap the most quality market intelligence, you’ll need to use a strong online survey platform. 

As aforementioned, this kind of market research software opens doors to a large swath of insights on virtually any aspect of your market analysis process. From customers to competitors and everyone else, a robust online survey platform facilitates your entire market analysis.

This kind of survey provider should offer an agile platform, one that can easily allow brands to engage in an agile research strategy. It should be a mobile-first platform, as the use of mobile devices dominates the digital space.  

It should also include advanced skip logic to route respondents to relevant follow-up questions, use artificial intelligence and machine learning to automatically remove low-quality data, offer a broad range of filtering data options and engage respondents in their natural digital environments via random device engagement (RDE) sampling.

Most importantly, it should allow you to survey anyone. To achieve this powerful capability, you’ll need to opt for an online survey platform that deploys hundreds of millions of surveys to a wide network of digital publishers. Ideally, these are highly-trafficked websites and apps.  

Additionally, to achieve this end, the platform should offer the Distribution Link feature, which allows researchers to send surveys to specific targets, as this feature is a link to a survey.

You have full access to all of these capabilities on the Pollfish market research platform, which will set you up for success in conducting a market analysis.