Using Market Analyses to Drive Business growth
By Arlene Allen, Contributing writer
Successful businesses have extensive knowledge of their customers and competitors and a deep understanding of the market they are operating in. Whether you’re launching a new product or service or are looking to boosts your performance with existing products or services, a market analysis is the first step in equipping yourself with the right information to make informed decisions.
At its core, a market analysis is about knowing your customer and taking stock of your market. While knowing your customers’ demographics can help you develop more effective marketing campaigns and select ideal business locations, going beyond demo- graphics opens up new opportunities to grow and increase profits. The Canada Business Network, a business resource service run by the Government of Canada, points out four additional ways a market analysis can greatly improve the success of your business.
- A market analysis can identify opportunities to grow and increase profits by helping you recognize changes in demand. You can then offer new products or services to meet the new demand or find new markets within or outside your operating area.
- Being able to recognize and plan for industry and economic shifts is crucial to your business’ survival. A market analysis can let you know when it’s time to shift inventory, price and even staffing levels.
- Unless you’re a monopoly, staying on top of what your competitors are doing in the market is vital. First off, you need to know who your competitors are then you can find out how they operate and how customers are comparing your business to theirs.
- Lastly, knowing your market enables you to better mitigate any risk in your business decisions as you use sound information, not just intuition (a.k.a. a crystal ball), to drive your decision-making.
Experts assert that a regular flow of market research information can help businesses maximize the potential of their current business activities and create a roadmap for future growth.
“Gaining a deep understanding of your customers is a mandatory requirement for any company that wants to survive and thrive in the marketplace,” states Thomas Schinkel, an internationally recognized business adviser who works with chief executives of large and medium-sized businesses on strategic issues. Understanding your customers puts you in a position to gain new customers while helping you increase sales to existing customers,he continues, adding that sound customer knowledge also provides you with a basis for segmentation.
Once you know who you are dealing with, you can create different group segments to more effectively target your marketing campaigns or product or service offerings—know- ing who is buying what, for how much and how often, can make a huge difference to your bottom-line.
Schinkel recommends getting answers to some basic questions: Who is the purchasing decision maker? What kind of order size is typ- ical for a group of customers? Are there many small orders that give you work but no profit? These questions can help you define what ac- count profitability is all about and identify which customers contribute to the bottom-line and which ones don’t.
“Digging deep into all aspects of your business model, not just sales and marketing, helps you create a viable, 21st century company that is crisis-resilient and flexible toward shifting market needs,” concludes Schinkel.
THERE ARE TWO BROAD TYPES OF MARKET RESEARCH YOU CAN USE
Primary Research – Primary research is original information gathered through your own efforts, including surveys, observation, or experimentation. Some of the questions this type of market research answers include:
- Who are my customers and how can I reach them?
- Which products and services do buyers need or want?
- What factors influence the buying decisions of my customers?
- What prices should I set for my products and services?
- Who are my competitors, how do they operate and what aretheir strengths and weaknesses?
Secondary Research –Secondary research utilizes existing resources like company records, surveys, research studies and books. Some of the questions this type of market research answers include:
- What are the current economic conditions that my business is operating in? Are these conditions changing?
- What trends are influencing the industry my business operates in?
- Are there international markets for my products or services that could help me to grow my business?
- What are the demographic characteristics of my customers or where do they live?
- What is the state of the labour market? (i.e. Skills I require and wages for employees)
Thomas Schinkel is an internationally recognized business adviser who works with chief-executives of large and medium-size businesses on strategic issues that include corporate value improvement, exit planning and growth through acquisition.
This Article was originally published in the Summer 2017 Issue of Office Today Magazine