The Complete Guide on Market Research vs Market Analysis
The Complete Guide on Market Research vs Market Analysis
Market research versus market analysis. This is a topic of contention for many in the business and research worlds. Both of these concepts yield critical data and intelligence for businesses and both of them are necessary to sustain a business.
Both market research and market analysis empower businesses to analyze areas of their industry, predict future trends, hone their business practices and lead organizations effectively. They both deal with big data problems from time to time. Both of these concepts also allow businesses to assess industry expectations and meet them.
However, although these terms are used interchangeably and offer similar business benefits, they are not the same thing, as each represents different key factors, processes, objectives and methodologies.
We’ve taught you about the differences in market research vs. user research. This guide lays out market research vs. market analysis, allowing you to understand all of their key facets and differences, so that you can understand when and how to apply both.
Understanding Market Research
Market research refers to a process that is far more specialized than market analysis, as it entails examining a specific market and its corresponding customers. It is usually bent on answering distinct questions regarding customer behavior along with all else that pertains to a target market, which is the group of consumers most likely to buy from a business.
Market research involves studying customers at an in-depth level, which therefore includes segmenting them into distinct groups and designating them with individual customer personas. This involves the practice of performing market segmentation, along with conducting secondary and primary market research techniques prior, during and after administering market segmentation.
Aside from referring to and implementing primary and secondary resources, market research encompasses both quantitative market research and qualitative market research methods.
Given that this kind of research is centered around customers, it examines a variety of customer traits and characteristics. They include the following:
- Customer buying behavior
- Customer preferences
- Desires and needs
- Customer aversions
- Opinions and sentiments in regards to
- Values
- Products
- Cultural trends
- Current events
- The industry at large
- Prices
- Lifestyles
- Behaviors
- Customer experience (CX)
- Views on the industry at large
- General feedback
Market research is a practice undertaken by business owners, researchers, analysts, marketing departments and even individuals. Essentially, market research is used to gather feedback and data directly from the customers, mainly to assess the viability of particular business decisions.
The Importance of Market Research
Market research carries a great deal of importance, as it empowers all businesses with critical data that steers them towards making the right business decisions.
Firstly, it’s important for startups and new businesses to conduct market research before launching their business or even innovating on a product. Although it is tempting to push a product to market, a lack of market research has grave consequences.
It is difficult to acquire new customers for established businesses, as it costs five times more to acquire a customer than it does to retain an existing one. Additionally, selling to a new customer has a low success rate of 5-20%, while selling to an existing customer has a success rate of 60-70%.
This environment exists for existing businesses. It is even more arduous for startups and yet-to-be registered businesses to gain a customer base. As such, these businesses must conduct market research. It grants them valuable knowledge about the particulars in their industry and most importantly, their target market.
Only when you understand your customers can you serve them properly. After all, you're not just selling a product or service. Businesses of the present can only survive if they provide a strong experience for their customers. 73% of U.S. customers say that CX is a very important factor in their purchasing decision. 1 in 3 custumers will leave a company after just one bad experience.
Clearly, customer experience is vastly important and in order to create positive experiences that not only draw in but retain customers, you’ll need to understand your customers at a deep level.
Market research makes this possible, as it allows you to learn everything about your target market, segment them into smaller, more distinct groups that you can dedicate to different campaigns and satisfy them continuously.
Understanding Market Analysis
Market analysis is the process of examining a particular market, industry, niche or segment. It is carried out by way of quantitative and qualitative assessments of a market.
This analysis relies on raw data that predominantly focuses on a market's size and potential. As such, it involves studying a market by observing various factors that involve these two concepts.
A market analysis involves observing the following aspects: market volume, value, its different customer segments and their customer buying behavior, economic conditions, regulations, the competition, barriers to entry and political, social and cultural trends, as they relate to the market.
A market analysis uses current and historical data to forecast future market events and outcomes. This data includes information on the above topics of observation. Businesses use market analyses so that they can understand how their products and experiences may exist under a certain environment.
This kind of analysis allows companies to plan ahead for the future in a strategic way, using data for decision-making. This is because it allows companies to get a plain understanding of the most important factors of their market.
A market analysis is an all-encompassing practice of examining a market, therefore, it uses a wide range of sources. This involves using market research to provide key information on customers and other aspects of the market. By relying on a vast number of sources, a market analysis can assess and predict all of a business’s growth options, as well as its possible stumbling blocks and limitations.
In short, a market analysis gives businesses a broader understanding of their market by relying on multiple means and sources of data that pertain to various aspects of the industry.
The Importance of Market Analysis
Market analysis is important for a variety of reasons. Almost every successful product or service of the present involves having conducted a thorough market analysis. This analysis is often the first and the most significant stage in the development of a marketing and business plan.
The process of a market analysis is important, as it allows business owners to evaluate whether their product or service will satisfy their customers’ needs. This way, they don't waste time on producing products, product updates and features that will perform poorly and generate few sales.
A market analysis helps gain insights into the shifts occurring in the economy. This can include changes in regulations that directly or indirectly affect your business. It also helps you stay aware of market trends, which puts supply and demand in perspective.
This helps you set reasonable prices that are commensurate with demand. It allows you to understand the desirable products and services along with those that drive little demand. These key aspects enable your business to become fully acquainted with the economy, along with the particular one of their industry.
In addition, this kind of analysis is important in that it provides insights into your target market, the segment of the market most likely to be your customers. It does so, as it involves studying your demographics along with their behaviors, traits and expenditures. In this sense, market analysis is critical as it implements market research.
Furthermore, a market analysis will help you plan the most promising strategy to market your product or service product. This is because when analyzing the key facts of your market, many marketing messages will come your way.
Even by casually browsing your competitors’ sites and social channels, you’ll discover various marketing techniques, from ads, to landing pages, webinars, promotions and much more. This will give you critical information on the kinds of marketing methods to test and try.
Given that a market analysis touches on so many components of a market, it equips businesses with essential knowledge for making auspicious business decisions. This kind of knowledge allows you to complete a business plan, as it has its own section, showing prospective and plausible investors that you understand your market.
The results that your market analysis draws enables your company to identify both the opportunities and risks of your particular market. All in all, this kind of analysis sheds light on all the foundational aspects of a business, along with its main ongoing concerns. This kind of knowledge will inform and bolster all kinds of business endeavors.
The Key Differences Between Market Research and Market Analysis
There is considerable overlap between market research and market analysis, given that some market research projects may include a market analysis and especially since market analysis encompasses market research.
Additionally, you can complete both a market analysis and market research for a business plan. You can use both of these insights-rich methods to support a wide array of different documents and reports. Both of these can point you to the appropriate action based on the data you collect.
However, these two terms are not the same and should, therefore, not be confused with one another.
The main differentiating factor between them is that market research is inclined on gathering customer-specific intelligence. Market analysis, on the other hand, seeks a far more expansive perspective of a market, thereby relying on more resources, to execute all the possible business forecasts and examine all growth options.
Whereas market analysis is broad, market research is much more specific and fine-tuned. Market research is therefore restricted by the population of studies, emotions and time, as well as different kinds of human interaction.
In contrast with market research, market analysis works by depositing large quantities of data into a large storage framework. Market research works by collecting specific data points necessary for answering certain research concerns.
Market analysis often yields results that last in the long-term, while the results of market research tend to be valid for several months to years, depending on the population and theme of the study, given that public opinion can change quickly.
In conclusion, market analysis strives to render a clear picture of the majority of a market, while market research is focused on understanding its customer base and those possible prospects.
Reinforcing All Your Research and Analysis Needs
Market analysis and market research are two exceedingly important processes of gaining information to bolster your business. Despite their similar nature and often conflation, they are two distinct practices and should not be mistaken for one another.
However, in order to conduct market research and even garner intelligence for market analysis, your business ought to use a strong online survey platform. It can be used to study your customers on a deep level, along with what people perceive in your market. You can also send surveys to specific people with Link Distribution, allowing you to better understand your market by surveying key players.
To do so, you ought to look into a strong online survey platform, the kind that operates via random device engagement (RDE) sampling, which reaches respondents in their natural digital environments, scaling back on survey bias.
You should also opt for an online survey platform that implements artificial intelligence and machine learning to disqualify survey fraud and poor-quality data and offer a mobile-first design.
Such a platform will ensure you gain the most quality insights on your market and customers in a timely way.
The Guide on How to Analyze a Market with Market Research Software
The Guide on How to Analyze a Market with Market Research Software
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:
- The size of your target market
- Your main competitors, their offerings and marketing practices
- Your potential customers and their various segments and customer personas
- Your customer behavior
- Acceptable price points and ranges for your product for your target market
- Your competitors' strengths and weaknesses
- 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.
- Determine the purpose of your analysis.
- 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.
- 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.
- Determine your purpose as soon as possible, as it will guide your market analysis.
- 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.
- Research the state of the industry.
- In this step, you’ll need to describe the state of your industry and where it’s headed.
- Use secondary resources to study its trends, size, projected growth, in-demand product and services and their innovations.
- Use secondary sources such as industry news sites, blogs, MarketResearch.com for industry reports, Ubersuggest for top industry players and SEO analyses and research associations such as Forrester.
- Identify your target market and segment it.
- This analysis will point you to your ideal customer(s).
- First, use some of the secondary research from Step 2, but to find the target market associated with your niche and business.
- 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:
- Age
- Gender
- Location
- Occupation
- Education
- Needs
- Interests
- Marital status
- Behaviors
- Views on current events, cultural trends, your industry, its competitors, etc.
- Next, segment your target market into smaller groups via market segmentation.
- Consider creating a customer profile or persona that represents your ideal customer to serve as a model for your business campaigns.
- Study your competition.
- 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.
- Gather insights on both your direct and indirect competitors from the secondary research you conducted in a previous step.
- Study the following aspects of your competitors:
- Market saturation
- Market capitalization
- Strengths, weaknesses, advantages and hurdles
- It will be useful to conduct a SWOT analysis on several competitors.
- Establish how your competitors are different from your business. Note the strengths you have to prevent new companies from competing with you.
- For example, a better location, business patents, lower prices, a better rewards program
- Rank your competitors from least to most threatening and use this document when comparing yourself and innovating on new products, services and experiences.
- Conduct further analyses in relation to your business.
- 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.
- Form more granular analyses on your market, economy and consumers by using these secondary resources:
- U.S. Bureau of Labor Statistics
- U.S. Census Bureau
- State and local commerce sites
- Trade journals
- 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.
- Map out your own products and prices.
- Consider your price; is it on the lower or higher end of the price range in your niche, or is it somewhere in between?
- To this end, mull over the message that your price sends to your market at large.
- 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.
- High-priced goods and services need to come with a high-quality customer experience (CX).
- 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.
- Forecast your initial sales volume.
- After you categorize your pricing and map out a pricing strategy, assess how much you expect to sell.
- Prior industry research will come into play in this step as you think about how much of the broader market you expect to capture.
- 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.
- 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.
- When you create your forecast, use it as a business goal. Compare your actual sales with your forecast.
- Tracking your progress will help you adjust your strategy accordingly and avoid sales disparities between your forecast and actual sales in the future.
- Consider your price; is it on the lower or higher end of the price range in your niche, or is it somewhere in between?
- Analyze your data.
- After you finish collecting all your relevant data and ensuring its accuracy, analyze it so that it is actionable to your company.
- Organize your research into distinct, digestible sections, especially in a way that is specific to your purpose, target market and competition.
- Use the following elements to organize your findings:
- An overview of your industry's size and growth rate
- Your business's projected market share percentage
- Customer buying trends
- An industry outlook
- Your forecasted growth
- How much customers are willing to pay for your products or service
- Act on your analysis.
- After putting the final touches on your market analysis, use your research and findings to take action on business.
- Use the intelligence of other businesses doing the things that you can implement in your business.
- Implement marketing strategies that you’ve found to be effective in your analysis.
- Test your analysis and form hypotheses that you can use for correlational, causal and experimental research, if need be.
- Take action on your findings by forming marketing, sales, PR and market research campaigns.
- Iterate different actions to see which garner the best results.
- 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.
