Whether you're starting a new business or improving existing business processes, you’ll need a detailed market analysis. Not having a proper assessment of your market will make it difficult, if not impossible, to achieve your business goals.
On top of that, you'll end up leaving money, customers and growth opportunities on the table. And your competitors will grasp it.
A market analysis tells you everything you need to know about your industry, competitors, customers that directly affect the growth of your business.
According to Think with Google, 40% of marketers leverage consumer research to make decisions. Getting it right with market analysis helps you make sound decisions, putting you a step ahead of your competitors.
Conducting a market analysis might appear daunting and complex. We've created this guide to discuss what a market analysis is, the components of market analysis and templates to help you create your own.
Here’s a short selection of 8 easy-to-edit market analysis templates you can edit, share and download with Visme. View more templates below:
A market analysis is an assessment of the industry or market for a product, service, or business. This analysis gives you an overview of all the elements that affect your specific market. Analyzing your market or industry helps you:
A market analysis isn't just for writing business plans or marketing plans. It can be conducted as part of activities for launching new products or services, diversifying into new industries, or revamping your current business strategy.
For example, let's say you're looking for a gap in the market to create a new product or service. A thorough market analysis can point you in the right direction of what's most in demand.
A market analysis isn't a one-time event. If you want your efforts to be successful, keep your market knowledge up-to-date using a marketing dashboard.
You can use a marketing analysis at different stages of your business. It can be helpful to conduct it once or twice a year to keep up to date with major changes in the market.
With a detailed marketing analysis, you can gather valuable insights into:
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A market analysis is valuable to your marketing deck. It provides a core understanding of your market and puts your business in the driving seat for success.
Here are some of the other reasons you need a market analysis for your business.
A market analysis gives you insight into market trends, competitors and key success factors. You're able to spot risks, threats and opportunities for growth. This information helps you develop a targeted business strategy and make the right decisions to drive growth.
By conducting market analysis, you can stay on top of industry trends and see what your competitors aren't seeing. Taking advantage of this information puts you a step ahead of other players in your industry.
Market research and analysis involve listening to the market and communicating with customers. While conducting market analysis, you want to identify these things.
You are better positioned to provide targeted solutions when you have a firm grasp of what customers want. Plus, you can use that information to tailor your business's offerings to your customers' needs.
While building your market analysis, use Google Analytics to assess how your website visitors are reacting to your product and service offerings. Analyze data like where they’re finding your products, how long they’re spending on your pages and where they’re dropping off. Visualize the Google Analytics data in your market analysis report with the help of Visme's integration with Google Analytics.
A market forecast is a critical component of marketing analysis. It predicts the trends, financial projections and characteristics of your target market.
This forecast gives you an idea of what revenue, cost and profit margins to expect. You can tweak your business plan and budget accordingly.
Without metrics, it can be challenging to gauge your business performance. This is where a market analysis comes in handy. It provides benchmarks for measuring your business performance against other companies in your niche.
A market analysis framework gives you a holistic view of the industries you’re interested in or currently operating in. The components of your market analysis should include:
Let’s look at each of these components in more detail.
When preparing your market analysis, you want to conduct an in-depth analysis of your industry to determine the current state and your industry's future.
This section should have the following information:
These measures give a broad overview of your industry. For example, let’s say your business is operating in the software industry. You'll want to describe how large the industry is, the current growth rate and the projected growth rate over the next few years.
To gather statistics, reports and studies about your industry, leverage credible sources like:
In this section, you want to narrow down your data to focus on the specific market you're operating in. This is very important when you're crafting a market analysis in business plans.
From the software example above, the target market could be a specific niche within the software industry, like the finance or productivity software market.
By digging into the specifics of your target population, you're able to forecast how viable the market is and how profitable it will be to sell your solution to these customers. You'll also decide the best strategy to get value from this specific market.
Notice how the infographic template below provides detailed market analysis data about the virtual reality (VR) market.
Once you grasp your market description, double down on the occurrences that impact your industry over time. These trends could be short-term, intermediate and long-term.
Here you want to hone in to see how your market started, how it has evolved and where it's headed.
Why is this important? Monitoring the trends that affect your business ensures you aren't caught off-guard. Plus, it keeps you a step ahead of your competitors.
Here are some of the trends you'll have to keep an eye on:
Not sure how to monitor trends unique to your target market? Here are some ideas:
Identifying market trends is mostly about keeping your ears to the ground and listening out for approaching shifts in your industry. As you explore these trends, you should track how your offerings align, fit in, or operate counter to the trends. You can use free market research tools to gain insights into industry trends and customer preferences without incurring costs.
Analyzing your competitive landscape involves identifying who your competitors are and where they stack up against you.
The competitive analysis gives a bird's eye view of:
The beauty of competitive analysis is that it gives you a clearer idea of what you're up against. You can identify aspects of your business that need improvement to enable you to measure up or stay competitive in your industry.
Here's an excellent example of competitive data for your market analysis.
Much like market trends, the competitive landscapes for various markets change over time. And depending on what metrics you're looking at, you may get different results. Hence the need to make your competitive analysis an ongoing process.
Let's look at the various ways you can analyze the competitive environment.
You can check out your competitors, websites, social media pages, news, press releases and other marketing content. You can even shop from them, read testimonials and reviews and conduct surveys. You're sure to have a clearer idea of why customers buy from them or what makes them stand out.
Porter's Five Forces analyzes five major competitive forces that shape every market. They include:
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Bargaining power of suppliers analyses the number of suppliers in your industry and how easy it is to raise their prices. Suppliers have more power when they are fewer and raising prices can impact your profitability.
Bargaining power of buyers examines the influence that buyers have on prices and quality. Consumers have control when they are fewer. And because there are multiple sellers, they can easily switch to your rivals.
Competitive rivalry describes how intense the competition is in your market. Here you want to find out the following:
The threat of substitute products examines how easy it is for customers to switch to competing products. Customers will often find cheaper substitutes that cut their expenses, which may, in turn, affect your profitability.
The threat of new entrants examines how easy or difficult it is for new businesses to join your market. The easier it is for new firms to enter your market, the greater the number of competitors and the smaller your market share.
A SWOT analysis is an excellent framework for evaluating your competitive position and making strategic decisions. This framework organizes your strengths, weaknesses, opportunities and threats to your business into a simple two-by-two grid.
Strengths and weaknesses are internal to your company. They include things you can change or have some control over. Examples include your team, intellectual property, patents, location and other resources.
Opportunities and threats are external. These are things that happen in the larger market. Essentially, you have no control over them. Examples include customer shopping trends, competitors, increasing demand for certain products, prices of raw materials and economic growth or decline.
Use the SWOT analysis template below as a guide to build on your strengths, address your weaknesses, seize new opportunities and minimize threats or risks.
