The success of an organization largely depends on how well it is able to deliver the right value to the right people. Typically, an organization selects a group of customers, identifies one or more of their needs and offers products or services which can satisfy them. The more valuable the products and services are for the customers, the higher sales volume it is likely to achieve, thereby leading to high revenue generation. Therefore, it is important for the companies to identify the most suitable market to cater to, through an in-depth market analysis. Analyzing the market can reveal some of the key factors that can influence a firm’s business operations, and enables companies to design their marketing mix strategies around those factors, for more chance of success. Analyzing the market is also a must-have skill for a business management student.In this article by PenMyPaper, we will show you how you can analyze any market for your business plan or any marketing essay.
In order to fully analyze a market, you need to first ask a few questions, such as:
These key questions form the foundation of market analysis. No matter which market you are going to analyze, you must answer these key questions, starting with identifying which market to cater to.
The first stage of analyzing a market is to first identify the market. Before we get into the details, let us first define what a market really is. Colloquially, a market is a place where buyers and sellers engage in business transactions. However, in this context a market can be roughly defined as the set of all actual and potential buyers of a product or service. A market is usually identified through market segmentation and targeting. Market segmentation involves segregating the market in to different groups of customers with different needs, preferences, characteristics and behavior. It is similar to that of writing cultural essays. Most commonly used segmentation variables are: geographic, demographic, psychographic and behavioral.
|Geographic||Countries, states, cities, urban, sub-urban, rural, etc.|
|Demographic||Gender, Income group, Age group, Education, Religion, Ethnicity, Profession, etc.|
|Psychographic||Lifestyle habits, personality types, etc.|
|Behavioral||Loyalty, usage rate, social interaction, word of mouth, etc.|
Each of these parameters or variables can help a marketer to decide which group of customers they should aim at. Different customer groups will have different characteristics and will largely affect their purchase and post-purchase behavior. When analyzing the market, the reliable essay writing services suggest narrowing down on a specific group of people that best suits your product or service. For example, you may choose to select region California (geographic), younger group of people with average affordability (demographic), prefers to eat out of home (psychographic) and are quite active in their social groups (behavioral).
After you have selected the market segment, you now will have to select the target market. Targeting involves a more streamlined selection of potential customers who share common characteristics. For example, it might have not been mentioned in Tesla’s mission statement, but its marketing strategy states that they are more dedicated to an audience who are wealthy and are considered upper-class individuals. The segmentation and targeting can help a firm to select a specific market segment and identify the potential customers.
In order for your product or service to be successful in the market, it must align with the existing trends. These trends determine the consumption behavior of the potential customers often highlight their preferences towards a particular product or service category. Companies often invest in conducting thorough market survey in order to determine the current trends in the market and also try to determine certain future possibilities. This allows them to get a clear understanding of how the market will respond to the introduction of their new product or their new marketing strategies. For your professional essay writing, you can use secondary data from reliable sources which highlights the key consumption trends in your chosen product category.
The given chart shows the per capita consumption of carbonated soft drinks (CSD) in the US for the past 10 years. This clearly suggests that there is a declining trend in consumption. Trends like these can be beneficial for you to choose the right product. In this given scenario, the rising health consciousness among the people in the US has resulted in the decline of CSD consumption. Therefore, a new beverage with low calorie content can attract more customers.
The cultural background of an individual or a group of individuals has a major role to play in their consumption and buying behavior. It is the responsibility of the marketer to thoroughly study the cultural aspects of the target market before introducing the intended product, service or marketing campaign. To get a clear understanding of the cultural background of a chosen market, you can use the Hofstede Cultural Dimension. In case you are unaware of how to write a college essay on this particular topic, consider a professional to do it for you.
The chart shown above showcases the scores on each cultural dimension of the United States. Based on these scores, you can make a rough estimate of the buying behavior of the people. For example, the US scores high on Indulgence, which means the customers are likely to spend more on leisure products and services. Moreover, the low uncertainty avoidance score suggests that people in the US show fair degree of acceptance towards new products, innovative ideas and technologies. These factors can play a significant role in determining the success of your product in the market.
While designing a new product or service, a company also must ensure that it does not come in conflict with the cultural sentiment of the people and are aligned to their customs and values. Any contradictions can lead to brand rejection, which can be detrimental to the company’s survival.
The business operations of an organization are significantly influenced by the external business environment. These factors can support or disrupt the operational activities, thereby making them quite essential for the marketers to identify. The PESLTE analysis is one of the most commonly used frameworks for analyzing these external factors present in the market. The PESTLE framework analyzes a market based on five key parameters such as: political,economic, social, technological, legal and environmental. Each of these factors can vary greatly from one market to another, thereby making one more suitable than the other. For example, a good political relationship between the home and the host countries, can help an organization to seamlessly expand into the international markets. An organization needs to identify these factors for a particular market, so that it can develop its products, services and marketing strategies around these identified factors.
The presence of other market players can be a significant threat to the growth of a company. The competing firms often try to offer superior value in the same product or service category in order to attract more customers and gain more market share. Therefore, a company needs to design its marketing strategies based on the nature of competition in the chosen market. The competitive forces present a market can be assessed by the porter’s five forces model. This framework allows a company to analyze the competitive forces based on five key parameters which are buyer’s power, supplier’s power, threat of new entrants, threat of substitutes and rivalry among firms. This also suggests that the threat of competition only comes from rival firms, but also comes from various other factors. While choosing the suitable market location, an organization can identify a market where these threats are minimal or manageable. Additionally, you can go through a SWOT analysis example to get a comprehensive understanding of your organization. This can help the firm to establish a strong foothold in the market.
For any assignment help, you can buy assignments online or seek expert help to assist you and now let us take a look at the key takeaways from this article. Analyzing the marketing in which a company is about to enter is extremely crucial for its success. Market analysis provides critical information about the chosen market such as specific market segment, characteristics of potential customers, business environmental factors, buying behavior and competition. A company needs to consider each of these factors before designing its products and marketing strategies. Since, these factors can have a significant influence in the business operations of the company, they should always be considered while taking any business decisions.
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