Marketing analytics is the science or study of analyzing the customer data covering marketing research, marketing strategy, and marketing plans. The objective of a marketing analysis is to identify the general interest of the buying public and understand the growing changes and possible threats of the company as they relate to the strong and weak points of the business in the industry.
The Need for Market Analysis
In the study of evaluating and investigating the market and how the market moves, a market analysis must be conducted by the company. The analysis helps an organization make planning decisions especially in the inventory, purchasing decisions, work force, promotional programs, branch expansion, and other aspects of the business.
Performing a marketing analysis is the initial step in identifying if the company should entertain new product ideas or if there is a specific market segment for a product. Whether your business is just starting out or introducing a new product, analyzing the market is an essential aspect in the preparation of marketing plans. If you understand the needs of your market and how they want to be catered, your company is bound to create effective strategies for marketing.
Basically, the essence of conducting a marketing analysis is to aid a company in getting ready to enter a new market, launch or promote a new product or service, and help get a business started. So the reasons for making an actual assessment of the market is to find out if there is a particular market that can take advantage of the products or services, to create the need of making a marketing plan, and to make sure that there is adequate market information that will contribute to sales and profit generation.
Dimensions of Market Analysis
The science of marketing analysis is classified into various elements: market size, market growth rate, market profitability, industry cost structure, distribution channels, market trends, and key success factors.
In assessing the market size, both the present or current sales and future or potential sales are to be considered. In identifying the market size, the company can derive data from sources like government, trade associations, customer surveys, and financial data from the industry’s key players.
Evaluating market growth rate may be conducted by basing it on demographic information and growth of sales in similar products. As for market profitability, certain factors are useful for the analysis and these are the consumer’s buying power, supplier power, threat of replacement products, competition among businesses, and hindrances in penetrating the market.
The market trend must be closely analyzed since the business world is dynamic. A company must be able to adjust to the changes going on in the market. Other factors needed in the market analysis that contribute to the success of business goals could be technological advancements, being able to take on the economies of scale, and availability of unique resources.
Complete Market Analysis Process
A marketing analysis is properly conducted when marketers follow a certain process. Just as in every study, marketing analysis starts out by defining the problem or issues that need to be scrutinized. Once these problems are determined, an analysis of the situation is the next step especially when the marketers are not familiar with the said situation. This can be done through informal gathering of information such as casual talks with people who are aware of the problem who, in turn, communicate with customers for data gathering.
Next, a formal and primary marketing research is conducted in order to gather primary data. Qualitative or quantitative form of research may be used. After a thorough research, the collected data is prepared for analysis and interpretation. Once research results are generated, the findings are used to determine the marketing strategies that will serve to be useful. Managers play important roles in this part because their decisions are highly considered.
The last step in the marketing analysis process is the creation of a marketing plan that is suitable to the customer’s needs as well as to a specific product or service. In the marketing plan, advertising and marketing campaigns are the primary points of discussion. Marketers talk about ways of marketing or promoting the product or service to the market.