The better you know your competition, the better you can take advantage of any competitive advantage that exists between your business and the rest of the herd. Marketing serves the vital function of defining your point of difference while industry research provides the necessary foundation for making important strategic decisions.
But before your marketing efforts can fly, you have to first get off the ground. Whether you are starting a new business or launching a new product, conducting an initial marketing analysis is the first step in determining if there is a need or audience for your idea.
Knowing the market's needs and how it is currently serviced provides you with key information that is essential in developing your product/service and marketing plan. Too often, businesses spend thousands of dollars launching a "new" idea with a limited market because of competition. The owner is forced to reevaluate his strategy and determine if there is room for another player.
Although the quality of the product is critical, your development of the best product on the market will not necessarily correlate with the most sales. Up to 50 percent of a product's price can be used for marketing. The company who wins the marketing game generally will capture the larger share of the market.
For those small businesses without an in-house marketing group or even a marketing vendor or freelancer to rely on, conducting a market analysis will help you:
- Prepare to enter a new market
- Launch a new product/service
- Start a new business
Although the terms "marketing" and "marketing analysis" can both be described as games of information, they are not to be confused. Marketing encompasses all of the activities that go into promoting a product or service. A small business marketing analysis is the actual assessment of the target population, competition and needs for marketing that product or service.
A high-level look at the small business marketing analysis process can be broken down into six basic steps:
- Defining the problem
- Analysis of the situation
- Obtaining data that is specific to the problem
- Analysis and interpreting the data
- Fostering ideas and problem solving
- Designing a plan
There are entire books dedicated to explaining the various ways you can conduct a marketing analysis, but suffice it to say that when you finally gather and compile the results of your survey, ideally you'll have a better idea of which markets make the most sense for your business to target. And at that point, the "pure" marketing will begin.