Understanding how your market works and what customers want is vital. Industry analysis, desk research and customer research help you identify where to focus your efforts and how to maintain a competitive edge.
A full market assessment provides a wide range of information to help you plan your marketing strategy. While simple data such as market size may help you decide whether the market is worth investing in, you also need to know how the market works: for example, the main distribution channels and the key market trends.
You need to understand what customers want and how they behave. For example, you might use consumer research or industry analysis to investigate which factors influence purchasing decisions. Research into competitors and what they are offering can help you identify where the best opportunities are and how you can differentiate your product or service. You can also use market research to establish the best sales and communication channels for your target audience.
If you serve a niche market or a defined geographical area, some data may only highlight the big picture but ignore important exceptions. For instance, while there are currently widespread closures in the UK pub industry as a whole, those offering good food and ambience in the right catchment area are doing well.
Market intelligence like this helps you identify different opportunities and industry trends and so decide which market segment to target. Once you've decided on your target market, research can also help you identify potential customers and the best way to approach them.
Industry research and market surveys tie in with research into your customers. For example, your own customer data should help you understand which market segments your existing customers fall into and what you should be doing to build market share.
If you don't have all the information you need, you may want to carry out additional customer research. For example, you might measure customer satisfaction to see how well you are performing, or survey lapsed customers to find out why they no longer purchase from you.
For many businesses, published market reports are a first step in market analysis. They are widely (and often freely) available via libraries, business groups and trade associations. In addition, trade media, networking and customer feedback can all be useful tools for keeping up to date with changing trends or investigating new markets.
But while market reports can be helpful, they may need careful interpretation. Generalised industry research may not apply to your particular target market: for example, a large national (or international) market is no guarantee of local demand. It may also be out of date in a fast-changing environment. Where necessary, you should be prepared to carry out your own research or get help from a professional market research agency.