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A Market Analysis is conducted to define and determine the attractiveness of several potential markets, and to understand those markets’ evolving opportunities and threats as they relate to the strengths and weaknesses of a particular business. The focus of this section should be on your target market — or the people you intend to sell your products/services to. This can include individual customers, known as business to customer (B2C), or other businesses, known as business to business (B2B). In a way, the Market Analysis is the ground work for your company’s plan of attack.
What’s in It?
A Market Analysis summarizes the size and potential of your target market, describes current market trends, and gives demographic information about your target market. The demographic information you want to collect about your target market will vary depending on whether your company is B2B or B2C. B2B’s should focus on a target region, customers’ industries and size of companies. B2C’s should focus on their customers’ location, personal demographics (age, gender, educational background, income, etc.), as well as psychographic characteristics (interests, values, personality, etc.) that define why they are the ideal recipients of your product or service. This section should include a table that lists all of the potential market segments you will target, along with all of the information you have collected in your research. After you have studied your potential customers, you should look into past and future trends of the market, keeping in mind factors such as:
Demand for variety
Level of emphasis on service and support that your target market desires
Regional trends that affect only the members of your target market in a specific area
Why’s it Important?
Understanding who will buy your product and what motivates them to buy is the foundation for creating an informed and effective marketing strategy. Most of this information will have to be found internally by your firm by doing research of your past customers. If you are a new firm who doesn’t have any history yet, try finding the answers to these questions by contacting either a firm that is similar to yours, or a trade association related to your industry.