What is a market analysis?
A market analysis is a dynamic assessment of a business market. This includes things like the size and value of the market, any potential customer segments, purchasing behaviour, competition in the market, and business trends. A market analysis should answer the following questions:
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what is the size of the target market (ie of the pool of customers who may be interested in the business’ goods or services)?
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who are the business' target customers?
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what are the customers' buying habits (eg where, why and how they shop)?
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how much are customers willing to pay for the business' goods or services?
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who are the business' main competitors and what are their strengths and weaknesses?
Why carry out a market analysis?
Describing your business’ target market (eg young adults, pensioners, or vegetarians) in detail is an effective way of demonstrating your awareness of exactly who will be making up the majority of your customers. Your sales will largely be decided by the take up of your goods or services by this sector of the population.
Business success is often determined by the ability to tap into a niche market. Therefore, detailing any specific segments of your target market (eg urban-dwelling vegan pensioners or children who play the piano) that will be particularly attracted to your offering can provide a better idea of your business’ potential. It can also make it easier to draw up a marketing plan.
Digging deeper into the demographics of your chosen market segment will allow you to focus even more clearly on your goals and prove to an investor that you have done your research. There is a wide range of demographics to choose from, including gender, age and income range, occupation and level of education.
A market analysis can help you ascertain some of your financial projections by determining the value of the population that meets specific demographic criteria for your business. This can be done by multiplying the total number of people in the relevant demographic by the cost of your offering.
When should a market analysis be carried out?
Market analyses should be conducted during business planning or when exploring new business ventures.
A market analysis should be conducted as part of a Business plan if you wish to start a new business, to determine where the business fits into the market. A market analysis should also be carried out whenever an existing business wants to launch new goods or services, expand into different markets, make significant investments or simply engage in strategic planning sessions. Regular market assessments can also help businesses stay informed about the competitive landscape.
Regular and timely market analyses ensure that business strategies remain aligned with evolving market dynamics and customer needs.
What is a marketing strategy?
A marketing strategy refers to a business’ long-term plan for achieving its goals, through an understanding of customer needs and the creation of a unique and lasting competitive advantage.
A business’ marketing strategy involves various elements, including:
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identifying the business’ target customers
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selecting appropriate channels for reaching target customers (eg paid TV commercials, paid advertisements on search engines like Google, or sponsored social media posts made by influencers)
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defining the business’ market position (eg how the business, its brands, and its products/services are perceived by customers)
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determining what goods/services the business offers
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establishing strategic partnerships (eg collaborations with other businesses)
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outlining approaches to advertising and promotions
What is a go-to-market strategy?
A go-to-market (GTM) strategy is a comprehensive plan that outlines how a business will introduce and deliver goods or services to a target market, with the goal of achieving a competitive advantage and capturing market share. The GTM strategy encompasses various elements and considerations, including product positioning, target audience identification, pricing, distribution channels, marketing and sales tactics and customer engagement.
In other words, a GTM strategy is a subtype of marketing strategy focused on the launch of a new product.
What should a marketing strategy cover?
A detailed marketing strategy should cover the following:
Product
This is what the business is selling, whether goods or services. The product in question depends on what your business will provide to satisfy customer demand and/or needs. This may also include any unique selling points (USPs) of your products, including how you present and package them.
Pricing
This is the cost of the business’ goods or services. Determining your pricing strategy involves evaluating competition, demand, production costs, and consumer willingness to spend. Different pricing models should be considered, including the decision between one-time purchases and subscription models.
Choosing a sensible pricing plan is crucial and will often determine your success upon entering the market. Even if you offer superior quality or higher levels of service compared to competitors, initially you are likely to be judged on how your pricing compares. Once your business or your product/service has established itself, you can reassess these pricing levels.
Promotion
Promotions refer to a business’ deliberate and targeted advertising efforts to reach the intended market for goods or services. There is a broad range of marketing and sales techniques to choose from, including:
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advertising in newspapers and magazines and on TV
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working with influencers
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working with affiliates
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working with sales agents
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traditional direct mail advertisements
Certain forms of marketing will be more effective for a particular product/service and target market so you need to choose the most appropriate methods for your situation. When choosing the most appropriate types of promotions you should always consider costs. For example, unless you have a significant budget, TV advertising will be out of the question.
For more information, read Marketing and the law and Advertising regulations.
Sales process and place of sale
Separate from the marketing and sales techniques you deploy is the sales process itself along with the place of sale. If you run a shop or cafe, most transactions will probably be done over the counter. On the other hand, you may decide to have a purely online presence, solely operating your business online (eg via a website or app). Alternatively, you may wish to adopt a dual approach, allowing customers to come and view your goods in a store and go home and order for delivery on the internet or by phone. You can, of course, also engage a sales agent to sell your products/services in a defined geographical area or territory.
In all circumstances, you must have all relevant documents and contracts in place to help you make sales. While exactly which are needed depends on the specifics of your business, some of the most common documents include:
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Terms and conditions - standards terms under which your business sells goods or services to customers
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Website terms and conditions - governing the use of your website by visitors
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Invoices - requesting payments for goods or services
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Purchase orders - confirming orders for goods or services
For more information, read Running your business and E-commerce and follow our Run a business online checklist.
Potential customers
These are customers who may be interested in the business’ goods or services. They include any customers you think may be interested in your product (eg because they have shown an interest in similar or related products) and any customers who have already expressed an interest in your product. This is especially true if they have signed a Letter of intent expressing their interest in contracting with the business. If you are starting a new business, providing clear details of such interested customers as part of your Business plan is crucial as it may give investors confidence that your idea 'has legs'.
When should a marketing strategy be developed?
A marketing strategy should be developed in various business scenarios to ensure a proactive and well-informed approach to achieving your business’ goals. Key instances when a marketing strategy should be developed include:
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at business launch - when starting a new business, a marketing strategy is an essential part of every Business plan to establish a strong market presence from the outset
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at product launch - before your business launches new goods or services, a marketing strategy helps effectively position you in the market
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on market entry - when expanding into a new market, region or industry, a marketing strategy is crucial for successful market penetration
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for brand repositioning or revitalisation - a marketing strategy can help a business that needs to reposition or revitalise its brand, especially in response to changing market conditions
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at different stages of the product lifecycle - at different stages of a product's lifecycle, adapting marketing strategies can help a business maximise its effectiveness
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when budgeting and planning - marketing strategies can help businesses allocate resources effectively as part of annual budgeting and planning processes
For more information, read Marketing and the law and Co-marketing and co-branding. Do not hesitate to Ask a lawyer if you have any questions or concerns.
