Market analysis

Chapter 8
 A market analysis provides insights into

What is a potential customers and your

competition. The core components of
the market analysis are:
market • Industry analysis: Assesses the general industry
environment in which you compete

analysis? • Target market analysis: Identifies and quantifies

the customers that you will be targeting for sales
• Competitive analysis: Identifies your competitors
and analyzes their strengths and weaknesses
Industry Analysis

• An industry analysis is a marketing process

that provides statistics about the market
potential of your business products and
services.
• This section of your plan needs to have
specific information about the current
state of the industry and its target
markets.
• An industry analysis may contain
reference materials such as spreadsheets,
pie charts, and bar graphs to represent the
data.
 • Identify your industry and provide a brief
overview. –
Explore your industry on a local, regional, provincial,
national, and global level. Be sure to define relevant
industry codes. Provide statistics and historical data
about the nature of the industry and the growth
Industry potential for your business based on economic factors
and conditions.
Analysis • Summarize the nature of the industry.
Include specific information about growth patterns,
fluctuations related to the economy, and income
projections. 
• Provide a forecast for your industry.
Compile economic data and industry predictions at
different time intervals (5, 10, 20 years).
 Identify government regulations that affect the industry.
Include any recent laws pertaining to your industry and any
licenses or authorizations you would need to conduct business in
your target market. This section may include information about
fees and costs involved.

Industry Explain your unique position within the industry.

Once you have completed your Competitive Analysis (in the next
section) you can list the leading companies in the industry, and

Analysis
compile an overview of data of your direct and indirect
competition. This will help you communicate your unique value
proposition.

List potential limitations and risks.

Write about factors that might negatively impact your business and
what you foresee in the short-term and long-term future.  Outline
what you know about the driving forces: new regulations,
technology, globalization, competitors, changing customer needs.
 • A market analysis is a quantitative and qualitative
assessment of a market. It looks into the size of the
market both in volume and in value, the various
customer segments and buying patterns, the
competition, and the economic environment in
Target terms of barriers to entry and regulation.

market • Demographics and Segmentation

analysis • Target Market

• Market Need
• Competition
• Barriers to Entry
• Regulation
Market analysis
Benefit
• Spot trends and opportunities in your industry
• Differentiate your business from competitors
• Reduce the risks and costs of launching a new business (or pivoting an
existing one)
• Tailor products and services to your target customers’ needs
• Analyze successes and failures
• Optimize your marketing efforts
• Reach new market segments
• Monitor your business’s performance
• Pivot your business in new directions
 When assessing the market size, your approach will
depend on the type of business you are selling to
investors.

If your business plan is for a small shop or a restaurant,

then you need to take a local approach and try to assess
Demographics the market around your shop.
and
Segmentation If your business plan is for a big venture, then you need to
assess the market at a national level.

Depending on your market, you might also want to slice it

into different segments. This is especially relevant if you
or your competitors focus only on certain segments.
Types of
market
segmentation
Market analysis checklist

Use this checklist, along with the steps above, to guide your market analysis process.

1. Research your industry.- Gain a holistic understanding of everything happening in your industry and prepare to navigate it.

2. Investigate competitors.-Know, who the big players are, and how you can differentiate your brand.

3. Identify market gaps.- Know your customers’ unique characteristics and tailor your offers and marketing accordingly.

4. Define your target market.- Know your customers’ unique characteristics and tailor your offers and marketing accordingly.

5. Identify barriers to entry.- Know what stands in your way and address challenge head-on.

6. Create a sales forecast.- Estimate future sales and make confident business decisions.
Volume & Value

• There are two factors you need to look

at when assessing the size of a market:
the number of potential customers and
the value of the market. It is very
important to look at both numbers
separately,

• Market value 100 crores

• Potential customers 1crore
• Competition 10 competitors
Identify your
target market
• Identifying and understanding your customers is essential to
your business and marketing plan. Not everyone is your
potential buyer, so it’s important to understand your target
market early on clearly. Learn how to analyse your market and
define your customer segments.
• What is a target market?
• A target market is a group of potential customers that you
identify to sell products or services to. Each group can be
divided into smaller segments. Segments are typically grouped
by age, location, income and lifestyle. Once you’ve defined
your target audience, you’ll find it easier to determine where
and how to market your business.
 Are your target customers male or female?

How old are they?

Where do they live?

Who your What is their marital status?
customers Do they have children? How old are their children?
are
What is their education level?

What do they do for a living?

What is their average income?

Customer interests
and buying habits
• What motivates a customer to make a purchase?
• What are your customers’ common interests?
• Who makes the buying decisions?
• How often do they purchase a product?
• Do they shop online or prefer to see their product before
they buy?
• How long does it take them to make a buying decision?
• What form of media does your target rely on for
information?
• How far do they travel to make a purchase?
• What other products do they buy?
 market needs for their audience or product, they may follow a
few different strategies depending on their goals and
objectives. Some ways to define market needs may include:

1. Be introspective - reveal gaps in the market for various

Define products or for services that need improvement.

Introspection may be a valuable resource for helping you
determine what market needs exist for your business.
market 2. Conduct interviews- interviews are a qualitative method

needs
for learning what the actual customers think about your
particular product, service or marketing strategy.

3. Consider cultural components - cultures to have a variety

of needs, so it's imperative to analyse these components.
 Quantitative approach to Define
market needs

Correlational Comparative
Survey data: 
data:  data: