- understanding the target market;
- setting the right marketing objectives;
- developing a sales pricing strategy.
Market analysis is a comprehensive assessment of the business area in which a company plans to operate. It includes the potential value of the market, the needs and behavior of potential customers, a map of competitors, and your company’s potential market share.
Market volume analysis: methods and objectives
The entrepreneur demonstrates his business idea with market analysis with numbers, data, and facts. Through such research, it is possible to:
- assess the market’s ential quickly.
- see the knowledge gaps in a particular industry, and fill them in time.
- find out what comparable products are already on the market.
- predict the reaction of competitors (competitor analysis is carried out before entering the market).
Market volume analysis is necessary for those planning to start a new business. It is impossible to develop either a strategy or successful marketing without research. Thus, market analysis is a prerequisite for the success of any business idea.
The purpose of the market analysis is primarily to assess the direction in which the company will have to move. For example, suppose the business is territory-related (for example, a restaurant or retail establishment with a point of sale). In that case, you will need to determine the coverage area, describing the geographic area from which customers can come.
This preliminary study is conducted to analyze the target market and how the company will position itself against its competitors.
The number of potential customers determines the volume. It depends on what kind of business has been chosen. For example, if you need to open an online office furniture store, all the companies operating in your service area will be potential customers. Most companies are likely to have only one person in charge of purchasing, so the number of employees in each company will not be of interest when estimating the number of potential customers. Instead, this data will be relevant when assessing the value of this market.
Essential sources of information about the market, its volume, and its participants are:
- data in the Internet space: statistics from Google, social networks – something you can’t do without;
- secondary research (data from government statistics, agencies, and so on);
- information on forums and social networks;
- information from experts.
With the help of this research, it is possible to lay the foundation for determining one’s competitive advantage and position in the market. The entrepreneur can already understand which promotion methods will be the most effective at the initial stages.
Marketing analysis of market capacity on a concrete example
The iPapus Agency specialists collect keywords by searching in the selected business segment and expanding keywords based on organic output from competitors. An example of a case study on market capacity analysis is presented. The following data is provided for each phrase collected: frequency of impressions, cost per click in google ads.
Next, the analysis of market volume is carried out in several stages:
- Analysis of business opportunities for growth and market demand by Google Trends and market forecasts for the topic. Provides information on what language is being searched in which regions are most often searched for queries on the subject.
- Comparison of the three main competitors in terms of visibility in the Google search engine. As a result of the study, we get the following data: the number of keywords, domains, external links, pages in Google, categories, subcategories, texts, articles, and photos.
- Comparison of the primary traffic sources on competitors’ sites and their distribution.
- Google Advertising. Calculate the budget based on the calculation of indicators based on competitors;
- Analysis of the potential earnings month/year and the number of clients from the channels SEO, and PPC, taking into account the conversion rate in the application of 3% (from application to sale 50%) and the average bill for a particular product or service.
The following work is being done on social media:
- Analysis and collection of the main competitors from the top 10 activities in social networks.
- Analysis of the current profile to match competitors’ offers. This analysis makes it possible to determine how actively social networks take part in lead generation from competitors and how actively competitors lead profiles.
- Analysis of the types of current advertising campaigns compared to competitors and analysis of the types of advertising campaigns used in social networks.
- Analysis of the potential for lead generation processes and create a media plan based on the audit of competitors’ advertising campaigns.
As a result of competent analysis of the market and its key figures with the help of an analytics data site, social networks can determine an effective strategy for further development and ways to bypass significant competitors.