The last quarter of the year usually involves some kind of planning for the following year in most businesses. Some biz owners will update their entire business plan, others may simply create a vision board of what is important to them. Both a vision and a plan are important to consider, but unless they are grounded at least in part in facts, is it really more of a dream than an effective plan?
Your plan, and an implementation strategy, should include a review of where your business thrived, where it perhaps stalled, and how your marketing worked this year. In addition, while it’s crucial to look at and understand your data for the past year, it’s also important to take some time to do a Market Analysis – from the standpoint of business focus and growth for next year.
The Importance of a Market Analysis
Along with taking a look back, it’s also good to take a look around you. And, that’s where doing a market analysis happens. With a market analysis, you can get super deep and technical – to the point where you have to hand it off to a professional. But not all businesses need to go so deep or have the resources to do so. So, for this tip, because we believe in empowering people, let’s keep it on the simple side.
What is a Market Analysis?
A market analysis takes a deep look at the market in general within your industry. What’s happening within your industry? What is new or what has changed? Also, how are customers interacting with your industry?
If you Google “market analysis”, you’ll find a number of excellent articles, and they all point to key elements that we believe should be included in the thought and planning process for any marketing strategy. The majority of the questions are centered around your target market! Here’s a list from BusinessNewsDaily.com in their article on conducting a market analysis
- Who are my potential customers?
- What are my customers’ buying habits?
- How large is my target market?
- How much are customers willing to pay for my product?
- Who are my main competitors?
- What are my competitors’ strengths and weaknesses?
How to Do a Market Analysis
This is where it’s very easy to dive off into the weeds, the data, and the details. We’ll do our best to keep it simple.
The first step is deciding why you’re wanting to do the analysis. Perhaps you’re starting a new business, or you have a new product or service and you want to do a deep analysis… in which case, this may be the perfect time to reach out to a professional to help with a deep analysis. But in the scenario of this article, i.e. to build an effective strategy for the coming year, we want you to stay focused on what has changed that might affect your business next year. A great starting question to begin building that strategy is to ask yourself, “What do I need to know and implement in order to grow and meet my business goals?
Revisit Your Target Market
If you’ve followed our tips, you know we believe it is vitally important to know and understand who your customer is when creating or adjusting any business strategy. And, more than that, to climb inside their head to understand how they think and make decisions.
If you need a refresher on your target market, here are a couple of our tips:
Dust off the details that you’ve outlined about your perfect customer and take time to analyze if that has changed over the past year. Do you understand their buying process better now than you did before? Update the details. Has your market actually shifted to a slightly different demographic? If so, make note of that.
This information becomes a key element as you’re looking at your website and marketing collateral. Because if your market doesn’t connect to the message you’re putting out… you’ve got a problem!
Review Your Competition
Personally, we love the collaborative approach that some competitors take with each other. Why? Because everyone wins. But, it’s still important to stop and work through the elements that make you different from them. Why should people buy your product or service instead of someone else in the industry?
As you look at the competition, ask yourself these questions:
- Have they changed how they do things in the past year? (for better or worse)
- What are they really good at? I.e. where do they shine?
- What are they obviously doing wrong?
- Why do people buy their product or service?
It doesn’t hurt to ask yourself the same questions about your own business while you’re at it. A SWOT (strengths, weaknesses, opportunities, and threats) analysis never hurts.
Also, take a look at how many competitors are in the market. This doesn’t mean doing a Google search for “web designers” (where web designers is an example of a particular market) and getting overwhelmed at the billion results. It means looking at 1) your service/product, 2) your target market – and then at the competitors who fit within those two elements.
For example, we at Design! by Kiltz believe everyone should have a website – from the 5 year old with a frog to grandma who has a picture of the 5 year old with a frog. BUT, our target market doesn’t span everyone within that range. We work specifically with service based businesses that are engaged in building their businesses and understand that marketing is a living, breathing animal.
If you find that your market has become more saturated, you’ll want to revisit your Unique Value Proposition and clarify how you can continue to stand out.
Review the State of the Industry
How has your industry changed over the past year, and what are the predicted changes as you look forward to next year? What elements are growing or changing quickly? What is less important than it used to be?
A perfect resource for this part of the analysis is looking at trade journals. Or, in this digital age, digging into the industry related websites from leaders in the industry.
Collect & Organize the Data
As part of your market analysis, you should be collecting data on each of the following:
- Your customer and how they make buying decisions, and their buying trends
- With your market, how much are they willing to pay for your product/service?
- Your own projected market share and growth
- Your industries rate of growth and change
- An outlook of what is on the horizon for your industry.
Once you have all your data, organize the information into a document, and if you have a team, review it with them. Many times your team will have great ideas on how to make the changes needed that you’ve discovered as a part of the analysis.
Taking the Next Step
Once you’ve done a full market analysis review, it’s time to start putting your game plan for next year together. Stay tuned for our next tip where we’ll review the details to look at within your business and walk you through the process of creating your marketing calendar.
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