What Is a Market Analysis?
A market analysis is the process of learning everything you can about your target market.
It’s like doing your homework to prepare before launching and growing your business.
Performing a market analysis has many benefits. For example:
You can identify your target customers and their needs and preferences. So you can develop the right marketing strategy to attract them.
You can estimate your market’s total size and potential. To determine whether your business will be viable and profitable.
You can analyze your competitors and their strategies. So you can formulate plans to outperform them and grow your market share.
In short, a market analysis helps you grow your business faster and smarter.
How to Do a Market Analysis
Follow our seven-step process to analyze any market.
1. Determine the Purpose of Your Analysis
Take a moment to ask yourself why you’re doing this analysis.
Is it because you’re launching a new product and need to evaluate the whole market landscape?
Or maybe you’ve already launched your product but are now looking to find the best channels for marketing.
Your purpose could be related to anything you want to learn about. And it's going to shape your entire analysis.
2. Research Your Market’s Overall Landscape
Now that you’re clear on why you’re doing a market analysis, it’s time to get a bird’s-eye view of your market using a market research tool. And gather information like market size, competitors, opportunities, etc.
You’ll get a high-level overview that touches on:
Market Consolidation: A low level of consolidation means there are many smaller businesses in the market, and you have a good opportunity to enter this space
Market Traffic: The total amount of potential website traffic in your market. The higher this number, the better.
Market Size: The total number of potential buyers in your market