In today’s hyper competitive marketplaces, where customers are more curious and have more choice than ever before, getting ahead and remaining relevant is only possible if you have an in-depth understanding of your marketplace. That means learning about the size of the market and the characteristics of the key players, knowing who your competition is, and trying to anticipate their moves, and identifying any new trends or developments that are likely to affect the way you do business, and what your customers want. While this may all sound daunting—you can get a grasp on your market through a market analysis. In this guide, we’ll show you how to use surveys to help you identify how to better position your business to best serve your customers and get ahead of the pack.
Imagine you’re considering starting a new consultancy business, advising non-profit organizations applying for grants and sponsorships. Before launching your business, you’re likely to have a number of questions like:
A market analysis can help you answer questions like these and more. It involves conducting a thorough evaluation of the market that you’re currently operating in, or one that you’re considering entering, and typically producing a market analysis report. Using a market analysis, you’ll research the volume and value of the market, trends, patterns and behaviors of key players, including customers and competitors and other market dynamics. You can read more about market analysis, but in the next section, we’ll look at the various ways you can better define and clarify your market with a survey based market analysis.
One of the key outcomes of a market analysis is that it enables you to define the parameters of your market, and to understand its composition in terms of different characteristics like demographics and behavioral features. The value of this knowledge cannot be overestimated: once you know exactly what your market looks like, you’ll be able to craft products and services that meet their needs, and to develop marketing campaigns with impact. Let’s take a look at some of the different ways in which market analysis can help you define your market.
Unless you’re producing that rare bird: a mass market product that appeals to everyone, everywhere, you’ll need to know the size of your market in order to optimize production, reduce waste, develop an efficient distribution strategy, and make accurate forecasts about future sales and revenues. A market analysis can help you to understand the size of the market, whether small or large, and to estimate the likely demand for your products.
In addition, a market analysis can help you to learn more about the demographic characteristics of your customer base. Depending on the type of product or service you sell, it might be useful to know the gender diversity of your customer base, their ages, the types of home that they live in, their household income, and more. If you really don’t know where to start to learn about your market demographics, our SurveyMonkey Audience solution can help.
Another way you can define the market through market analysis is by understanding the geographic location of your market. In other words: where are the key players located? Are they concentrated in one particular geographical area, or are they more dispersed? Knowing where your customers are located can help you to formulate appropriate marketing and distribution strategies, while learning about the primary locations of your competitors can help you to be smarter in refining your competitive strategies.
Psychographics means understanding your prospective, current or previous customers according to their belief or value systems. If you can learn more about your customers in terms of their lifestyles, interests, habits, personalities, opinions, attitudes, and beliefs, you’ll be in a much better position to be able to connect with them through your advertising campaigns and other marketing messages.
A market analysis survey can tell you much about how your customers act and behave: crucial insight that you can use to better serve them and meet their needs. The types of behavioral insight you can glean through a market analysis survey include:
What new processes are shaping your market? Are there any new, exciting innovations on the horizon? Perhaps the recent growth in Artificial Intelligence (AI) is poised to disrupt the way your market works, or perhaps your customers and competitors are already shunning new technology and prefer tradition. Trends come and go, and the best way to find out the likely impact on your marketplace is through conducting a market survey and analysis.
Ready to learn more about your customers through a market analysis? We have some handy market analysis templates for you.
As well as learning more about your current and potential customers, a market analysis gives you insight into who your main rivals are, how customers perceive them, and the types of strategy they’re using—invaluable knowledge for crafting an effective competitive strategy. Your market analysis report should distinguish between direct and indirect competitors, identify your points of differentiation and any barriers to entry in the marketplace. Let’s take a look at each briefly.
Direct or primary competitors are those businesses that are offering very similar products and services to yours. Knowing who these competitors are is vital information because your prospective customers are probably already purchasing from them. Once you know who the main competition is, you’ll have the foundation you need to try to offset their strategies.
Indirect or secondary competition are the alternatives or substitutes to your products or services. For example, if you’re developing a new non-dairy milk made from oats, your direct competitors may be other oat milks, while your indirect competitors may be milks made from almonds, soy, or other alternatives. It’s important to ask your customers whether they see these substitutes as true competitors in order to develop a powerful marketing strategy.
Especially in saturated or very busy marketplaces, it will be crucial to find ways to stand out from the competition. Your market analysis survey can help you learn more about how your business, product, or service is different from what the competition is offering. This can be leveraged in marketing to better attract customers. Example points of differentiation include opening hours, product quality, diversity of services, ambiance, or price.
Barriers to entry are the obstacles that stop new players coming into an existing marketplace, and they can range from low to high. For example, if starting a new business in a certain industry is subject to heavy regulations and the need to obtain licenses, then the barriers to entry might be considered to be high. However, if anyone can easily set up a business like yours, then the barriers to entry are probably low. Knowing the difference is vital: if barriers to entry are low, you’ll need to create protections to prevent new businesses from entering and poaching your customers. That might include building brand equity through great service and aftersales, or taking a more formal approach, like obtaining a patent for a new product.
So what are the steps to using surveys for market analysis? Let’s take a look at two of the main ingredients: how to build an audience, and the types of questions you should consider asking.
Perhaps the most important step in using surveys for market analysis is to build the right audience. You’ll need to capture insight from an audience that represents your market if the data you capture is to be relevant and useful. For that reason, your audience will need to be similar to your market in terms of things like:
This means aspects such as gender, age, level of education and household income.
Location of your audience will be important if you serve a localized or a globalized market.
Your audience should be representative of your market in terms of values, beliefs, attitudes and opinions.
Finding an audience that looks like yours needn’t be difficult. SurveyMonkey Audience has readymade panels available that can be tailored specifically to represent your customer base.
Let’s take a look at some of the types of questions you should include in your market analysis survey.
Shopping or buying habits
Some questions you might consider asking in your market analysis survey include:
Sentiment of competitors
How are your competitors perceived by your market? The very best people to ask about this are your customers themselves. Include questions in your market analysis survey that will help you understand the reputation of your competitors, how well they are perceived by the market, what their strengths are and whether they are making any missteps you can potentially capitalize on.
If you’re just about to launch a new product or service, one of the things you’ll be interested in learning from your market analysis is the ideal price point for your goods. This incorporates insight into the prices that your customers are willing to pay, as well as how sales are likely to change in response to price shifts. Or, if you’re already selling, you might be interested in the impact of a discount or deal on customer demand. Through a market analysis survey, you can ask customers about their willingness to purchase (and the quantities they’re likely to purchase in) at various price points, which can help you optimize prices—and therefore, revenues.
To learn more about the types of questions to use in a market research survey, see our comprehensive guide.
So now you know how to use surveys to support market analysis, let’s take a look at some of the advantages of conducting a market analysis. And, there are many!
If you know your market well, you’ll be well placed to avoid some of the major risks and pitfalls that come with running a business. Understanding who the main players are in your industry, and what it takes to be successful, as well as the trends affecting your market will help you anticipate changes and to develop an appropriate strategy for responding. You can also use market analysis to identify the factors that impacted the sale of a specific product, which can give you insight when shaping future sales strategies, boosting their chances of success.
If you have a good understanding of what your customers are looking for, you’ll be in a much better position to serve them effectively. Market analysis helps you understand who your customers are and what they want: information you can use to tailor your business's offerings to your customers' needs.
Staying ahead in business is often about being the first to spot and capitalize on new opportunities or trends. If you perform comprehensive market analysis, you’ll be in an excellent position to spot new trends just as they emerge, giving you a head start to take advantage of this information.
Market analysis is often the first step in building revenue projections. After all, you won’t be able to predict future sales unless you know the size of the market, the likely demand for your products and services, and the extent of competition.
A market analysis provides benchmarks against which you can judge your business, product, service or brand, which gives you insight into how well you are performing compared to others in your industry. Regular market analysis can also help you benchmark your progress against future goals.
Want to learn more about conducting market analysis? Learn more about target market analysis, including some handy tips on how to find the right people to survey. Or, if you’d like us to take care of that part, SurveyMonkey Audience can construct a panel for you, ready to take your market analysis survey in just a matter of minutes.
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