Developing a successful marketing plan involves taking several steps. One of the essential and, perhaps the foundational component in a marketing plan, is the market analysis.
Conducting a market analysis takes a combination of a few things - including skill, research, detail and savvy. When you begin your market analysis to include in a full marketing plan, keep in mind research is a primary component of doing a thorough market analysis. It is the research that will allow you to be about to more accurately describe the product or service that is the central point of your marketing plan.
Since research is such a key component of your marketing plan, you'll likely spend a lot of time doing it for a full market analysis. As a part of research, it is important to gain a full understanding of the product being launched or promoted with full perception on what the identified need to fulfill is going to be; without an identified need to fulfill, a product is likely doomed to fail before it even hits the shelves.
As the Small Business Administration notes, there are several key points to include in your research. 1 These include:
- Industry description and outlook
- Researching your target market
- Any distinguishing characteristics of your target market
- Size of your target market
- A look at how much of the niche market you can expect to gain
- Pricing of your products (or services)
- Regulatory restrictions
By doing enough research you'll not only understand your product (or service), potential market segments, and overall market which includes evaluating any competitors. Armed with this knowledge you won't blindly enter a market and miss your mark because you'll have a fuller perspective of what the company can expect.
Additionally, examining all angles of the entire market will help determine how much of a market share the company has and pinpoint ways to capture an even larger market share. Through this analysis you can discover what the market is lacking and how your product can fill any potential niche areas.
Write a Summary
Once you've done your research and evaluated your findings, the next step is to begin to put it all in writing. By carefully illustrating all you've learned through your research, you can effectively outline your discoveries, findings and plan of approach.
Helpful components to include in your market analysis section of the marketing plan are:
Description of the Product
A full description of the product (or service) being offered is foremost. Along with this, it is vital to include what kind of need the product will fulfill in the market. Consumers aren't likely to purchase something on the advertisement's say-so, so you'll have to provide more information by describing why the product is both useful and necessary.
Explain the Need the Product Fulfills
The item being marketed should effectively be able to be a solution to a problem; a solution people will want to purchase. As a part of this, it will be important to demonstrate why the product is different from the competition's item. A good marketer understands the focus should always be on customer needs. The product being sold should successfully be able to meet this need. When you can describe and present the item as a solution to the identified problem or need, then you know you have a potential good item (or service) to sell.
By doing a thorough analysis, you can see if your idea truly stands out from the crowd. In order to effecitvely compete, you'll have to present your product or conduct your service differently (and ideally, better) than your competitors. Research can help you determine if you've accomplished this goal.
Consider Potential Market Segments
When identifying market segments you'll need a description of each target segment and include all that group's attributes. This includes the number of potential customers, annual growth rate, annual spending, and market value. Do this for each potential market segment so you can narrow the one who will be more inclined to be attracted to the product.
Perform a SWOT Analysis
It's of significant worth to understand all of a company's strengths, weaknesses, opportunities and threats (SWOT). When conducting this part of the analysis, it is important to break down each piece to help get a clear understanding where the company stands on each part of SWOT.
The SWOT provides valuable insight in pinpointing where a company has superiority in a market and identifies areas where improvement would be helpful. Another benefit to conducting a SWOT in the marketing analysis is that it can help identify where risks and threats are that may be beyond control. The SWOT is a helpful tool in determining what can be gained through the marketing campaign.
A full analysis and clear plan can help avoid this.
Pull it All Together
Once you have all the information you need to begin the launch of a marketing campaign, you can begin to take tangible steps towards getting a product to market. The market analysis is a key component to help reach this eventual goal.
A market analysis is only one segment of a fully fleshed out marketing plan, but it is an important piece of the report. This analysis offers a lot of valuable information which helps determine the direction the other aspects of the marketing report and subsequent decisions made will go.
Most businesses, be it a sole proprietorship or a corporation , can benefit from having an plan in place as it provides a clear path which could ultimately tell you from the beginning whether the business has a strong position or not. If not, you can go back to the drawing board to start over and approach things differently before too much money and time is invested.