Previously, in this series, we have discussed the need for coming up with a viable business idea. This section is an off-shoot of the same and we will go into a bit more depth about how one can ensure their product/service will be able to find a place in the market.
The main tool any business owner has to get a clear understanding of where their idea stands is through conducting a market analysis.
This is the method of gathering relevant information from the market one is trying to penetrate. When embarking on any venture, and this is not limited to business alone, one has to test the waters and see what will be needed.
For example, if you’re going on a trek, you will find out what things you need to pack, which elements you have to weather and how to navigate your way through that space.
In business, the risky terrain you’re stepping into is the market so the preparation will involve collecting information on the competition and environment of that space.
Information to target during Market Analysis
It is easy to feel overwhelmed by the mounds of information available on methods to conduct effective market research. So, let’s start with the basics and list the things you absolutely need to know:
⦁ Target audience
⦁ Market rates
⦁ Marketing strategies being employed by competition
In this category lies all kind of information about the target audience. To name a few things you need to keep an eye out for:
1. The demographic: what age/gender/background of people are interested in what you’re planning to sell.
2. Location: where can these people be found geographically, so that you can focus on those areas
3. Social media presence: which platform do they use the most. For example, studies show that Generation Zers use 4 platforms a week on average, while Millennials use 6. This means that depending on who your target audience is you can conserve your marketing efforts and use your resources for maximum value and returns.
In terms of competition, these are the things you need to gather information on:
⦁ Main competitors
⦁ Market saturation
⦁ Product difference
⦁ Their marketing strategy
1. Main competitors: Find out who the big names are in that business are. Studying them will give you an insight into what works and what doesn’t.
2. Market saturation: If there’s too much of the same thing around, the audience for that product or service will be too thin. For example, if majority of the people are satisfied with FoodPanda or Uber, then new companies who want to start a food delivery or cab service will probably have a hard time making a place for themselves, unless of course they improve on the product/service and offer something better than what already exists.
3. Product difference: How is your product going to be different? If your service model as a cab service is exactly the same as Uber, why should anyone ditch a trusted old service for a new one? Plan your product/service around value addition.
4. Their marketing strategy: If your service is one that is completely new to the masses then you will have to find the best way to market it on your own. However, if similar services exist then you can take advantage of it and identify what’s working for them and what’s not. This is because you will be marketing to the same demographic and can expect a similar response for similar tactics.
This is self-explanatory. Knowing what rates similar products are being priced at will make clear the direction your brand is going to take.
This has been discussed before but some things that will become clear through studying marketing strategies are:
⦁ The medium
⦁ Brand image
1. The medium: Whether competitors are investing more on traditional marketing or digital marketing
2.Platforms: Which social media platforms and PPC channels are being employed and which is offering more returns.
3. Brand image: This includes everything from their customer service approach (the language they use, etc) to their brand aesthetic. Just by looking at the feedback similar brands to you are getting on social media, you can better understand the customer sentiment about the different approaches.
A thorough market analysis will inform critical decisions about your product and that is the best way to go about setting up a business.
Market analysis allows you to ensure your idea will work in the setting you’re in.
One thing to remember is to not obstinately follow what you set your mind on originally. Smart business owners adjust their strategy and approach with new information.
Research and revise. This is the key.
In the next piece we will discuss how to gather all this information. If that’s something you’re interested in, keep reading!
Previously, in this series, we have discussed the need for coming up with a viable business idea. This section is …