How to Run a Market Analysis: Discover the Core Information Needed for Business Success! (No Doubt About That)
Here are a few steps savvy eCommerce entrepreneurs know to help validate their business idea and make sure there’s a customer base. The main business planning step can be conducting market research on the area you plan to expand into.|
1: What is market analysis?
Market analysis is an assessment of a specific industry, niche, or vertical market. Let’s say you’re starting a company and want to know the best business idea because there may be demand. Your market analysis helps you understand your target market and the competitive landscape, as well as where your brand and product fit in. Your market analysis helps you better understand the effectiveness of your product promotion and if you need to secure funding from external investors or lenders, it shows that you’ve done your research and can demonstrate the viability of your business idea and their investment. Find external investors or lenders here.
Your market analysis should identify the following:
⦁ Who your target customer is
⦁ Where, why, and how they shop
⦁ The size of your target market
⦁ What people are willing to pay for what you sell
⦁ Your competitors’ strengths and weaknesses
2: Learn how to do a market analysis
The 3 steps to completing a market analysis for your eCommerce business are:
⦁ Conduct research on the industry
⦁ Understand your audience
⦁ Know how you stand in regards to competitors
Conduct research on the industry
Get a brief overview of what the industry landscape looks like by considering the market size, market value, market demand, and market need. Here is a reputable place to check Federal Reserve financial data.
3: Understand your audience
Start by gathering research and understanding your target market. Focus on its needs to ship a product that resonates with them and communicate efficiently.
When researching your potential audience, you should know the following:
⦁ What age they are
⦁ Where they live, where they work, what they do
⦁ How much they make
⦁ How and where they shop
⦁ What they buy and how much money a person spends
⦁ What technology they use, their perception of brands, and the challenges they face
4: Know how you stand in regards to competitors
Various competitive market analyses can help you understand the competitive landscape. Knowing who your competitors are can help you figure out how to identify what makes your brand different and differentiate yourself from other players in the market. Build differentiation by differentiating yourself from other businesses or brands. This will increase perceived value and will push customers to purchase your options instead of the same or similar options from other brands or businesses. The first part of understanding how to differentiate involves understanding your brand and your business and what you bring to the table. A SWOT Analysis is a way to visualize your strengths and weaknesses, opportunities, and threats in the market to understand where you stand.
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