To start work, launch new products, maintain stable demand, increase sales, the company needs information about the business environment, competitors and consumers. The purpose of market research is to obtain as complete information as possible about the subjects and objects of the market, external factors and trends for making decisions in the production and sale of goods and services.
What areas does market analysis include?
To make a decision about the possibility of entering the market of goods or services, a detailed market study is necessary:
- Definition of its type.
- The study of market structure.
- Analysis of the situation.
- Highlight target segments.
- Positioning.
- Forecast of sales volumes.
If the market entry has already taken place, the company successfully operates and makes a profit, regular market research is still necessary. It may be incomplete, and include only information that is of interest to the moment, which will help to maintain and strengthen positions, provide for possible changes in demand.
Determining the type of market and its structure
At the very beginning of the study of the market of services or goods, it is necessary to determine the type of market:
- local, national or global;
- monopolistic, oligopolistic, with free competition;
- market of goods, services, raw materials, labor, capital, innovation, securities;
- Wholesale or retail.
- consumer or producer market; in the first case, the position of buyers is stronger than that of sellers, in the second - on the contrary;
- consumer or enterprise market (buyers are firms);
- indoor or outdoor.
In addition to determining the type of market, it is also necessary to characterize it. The market may be developing or dying, limited by legal regulations or economic conditions.
The next step is to identify the market structure, the division of consumers into segments, the study of the needs of individual groups. Market research at this stage aims to prepare information to identify the most attractive segments for a particular product or service.
Business analysis
Market research of goods (services) necessarily includes market research. This work is to identify and analyze:
- market indicators;
- market shares held by various enterprises;
- indicators of demand for a product or service;
- indicators of supply, production;
- pricing.
Market assessment is not limited to studying the internal characteristics of the market. For marketing, it is important to determine how conditions will change. Therefore, market research includes an analysis of external factors: the political, economic, cultural, social situation in the country, global trends in similar markets, new technologies, the state of the labor market, and the legislative framework.
It is extremely difficult to assess the influence of external factors and their intensity. For this, it is necessary to determine the set of the most important indicators and consider their impact on the market under study.
Identification of target segments
After market segmentation and market research, it’s time to select the target consumer groups. To determine the attractiveness of a particular segment, there are such criteria:
- intensity of competition;
- ease, accessibility of attracting customers;
- possibility of exposure;
- segment size;
- similarity of consumers from this group;
- growth rate of the number of segment representatives.
There can be several target segments. Each company seeks to increase sales, but there is a limit to opportunities. To determine the optimal number of segments that the company can serve, two methods of market development are used:
- The concentrated method involves the phased development of segments.
- The dispersed method consists in trying to master the entire market of goods or services and the further rejection of unpromising segments.
Market research involves regular analysis of the developed segments, potential customers who are already interested in the product and undeveloped “territories”.
Positioning
Market research allows you to determine what competitive advantages a given product or service has or may have. Positioning means the need to find a place in the market where products similar or similar in properties are already sold.
Research, analysis and the most professional marketing will not help to make a product more attractive in the eyes of the consumer if it does not satisfy their needs. But they grow and change, therefore, it is necessary to respond to these changes in time, to ensure that the competitiveness of the product on the market does not decrease.
Positioning can go in one of two directions:
- filling a market niche whose needs are not met by competitors;
- entering the market with the same or very close to one of the competitors advantages.
Sales forecast
The study of commodity markets will be incomplete without determining the forecast indicators of market development and sales volumes of a particular enterprise. It is the forecast that is the guideline for decision making. The needs and desires of consumers, the entry of new products to the market, the actions of competitors, external factors - all this is in constant motion and changes the conditions in the market.
If the forecast is not made on time and the relevant decisions are not made, then market research will become useless. In the long run and in business planning, 3 forecasts are compiled immediately: optimistic, most likely and pessimistic. For a complete picture, we can study the influence of certain factors on forecast indicators. For example, if you strengthen the sales system, how much money and time will be needed for this and how this will help increase sales and profits.
The forecast of sales volumes is the final stage of market research and helps to organize financial flows, production process, and marketing activities correctly.