Market analysis is the process of understanding customer needs, industry trends and external factors to inform strategic decisions that grow businesses. It provides evaluation benchmarks, contextualizes past mistakes and reveals opportunities for resource optimization. It also equips teams to adjust quickly to shifts in customer behavior, industry patterns or new competitive threats.
Understanding market size, sales and turnover are crucial elements for estimating future demand. Performing thorough market trend analysis ensures that your predictions are accurate and can be relied on to guide new product development.
For example, if you discover that health-focused meal kits are popular with urban professionals with limited cooking time, you can adapt your brand’s menu options, packaging and pricing to suit the trend. Similarly, if you’re launching into a new state and find that locals prefer low-alcohol options, market research allows you to customize your offering to the demographic.
Market research also informs you about supplier dynamics and the threat of substitution. You can assess the marketplace’s structure using a tool like Porter’s Five Forces to evaluate the level of competition and identify strategic supplier partnerships that can help you weather changes in the market.
Market research isn’t just for marketers; it should be regularly discussed and shared across your business to drive strategy and growth. Involving your sales, product development and other departments in the process fosters alignment and makes it easier to turn insights into action.