+ A | - A

Do You Know How to Analyze a Market?

If you're having difficulty with research and market analysis, don't worry you're not alone! There are not many people who actually understand the important process of research, and you should become one of those few who do.

Introduction

Imagine yourself looking at a math problem. The problem is difficult and you're trying to reach a solution by thinking of possible ways to solve it. "What is the solution?", you might ask. But the question should rather be "what is the problem?". You can only discover the solution inside the problem, that is: you can only see the solution when you understand what the problem asks of you.

If we knew what it was we were doing, it would not be called research, would it?- Albert Einstein

Any experienced designer or other Creative realizes that solutions don't come out of nowhere. Not even those ideas that seem to suddenly come from out of space. Ideas appear to you when you understand who you're talking and what their problems are. Sure, we all seem to have solutions, but shockingly not that many actually deliberately think about the problem first.

This is why market analysis always is the first thing you should dive into.

Begin the Research

To influence someone we need to understand that person’s set of values and beliefs. If you skip market research and launch your product with simple sales tactics, you will fail to reach a long-term audience who are willing to stick by you. Nobody wants to be convinced that your product is good for them when they believe the opposite. There is too much communication surrounding every consumer today, so to have a voice, we need to consider that the competition lies in who knows the customer best and not who has the best tactics.

An optional title for this post could have been: ”Do you know what value is?”
The understanding of value is a basic knowledge in economics. However, it is really this understanding that seems to be a bit problematic for most of us. For some reason we get confused by the definition of value, even when we go about life valuing most things around us, everything from products, arts, movies and relationships. But, if you are going to understand any market, you will need to (at least) have a conceptual understanding of what value is.

What your potential customer values in her life decides what she chooses to do during her day. This is the beginning of understanding wants/needs that are so overly emphasized in marketing books.

Learning whether your potential customer values quality over price is a good start, but one should dig deeper into why this is. Why is quality more valuable than price? And, how is quality defined to this particular group? These are for instance two simple questions that can get you going with the research. The answers to these questions can be found in forums, Google Adwords, comments/discussions on websites, different rating sites or available research papers and statistics.

One way to begin understanding a market is by looking at its historical growth rate to project a future outlook. You can do this by measuring your opponents’ sales rates and cash flows from year to year (or month to month). Or, you can find statistics on how much the population have increased (or perhaps decreased) in this specific market throughout the years to see if you can find a pattern.

Questions You should Ask to Reach Your Final Product

When you have made a market analysis, you can begin to plan out your strategy. Market analysis is what builds up your entire product, if you don't give people what they want, then obviously they are not going to buy it. Here are some questions you should ask yourself during the process of your research.

Choosing your Place:

• What are the activities in the marketplace?
• What are the midpoint problems?
• Is there a need or want that can develop into a new marketplace?
• What problems can I solve?
• How can the problem be stated?

Deciding Your Customer:

• Who do I talk to, where is he/she located?
• Why have I chosen to talk to this person?
• What are the needs and wants of this particular person?
• What are the frustrations?
• What are the beliefs?
• What's the normal day like for this person?
• How many customers are there and what are their budgets (what are they willing to pay)?

Communicating with Your Customer:

• How do I introduce myself?
• How do I locate him/her and begin communicating?
• In what ways can I communicate?

Analyzing the Research:

• How do I analyze the information I have collected?
• What worked and what did not work?
• How well did I capture the problem?
• How do I generate concepts based on the problem?

Tip 1
Asking questions can be easy, but then to reply them is not as easy. Hence, try to be flexible and don't repeat the same questions a million times over, instead, rephrase them. For example:

How do I introduce myself...or
In what ways can I introduce myself...or
If I were the customer, how would I feel most comfortable when being introduced to?

Tip 2
When you've done a lot of research, simply find a place where you can close your eyes and imagine that you're the potential customer. As you're following their life and activities in your mind, you'll start to understand their situation, feelings and problems much better. And this will also help you see what is unclear so that you can make further research.

Analyzing Your Competitors

Not only should you understand your customer to gain a strategy but you should always keep an eye on your competition's strategy.

Competitor analysis in strategy is a dissection of the strong points and weaknesses of competitors. This analysis provides the advantage of identifying opportunities and potential menace. If you overlook this, the risk is grand that you're in danger of getting beaten by your opponents. You cannot compete with someone you don't know. Depending on how your competition changes, the perception of value changes for your customers. If you don’t keep up with your opponents and blindly act on the research that was conducted a year ago, you will lose the consumer’s interest.

Best Areas to research on:
• Background (When did they begin, how did the market look then?)
• Finance (Return of Investment)
• Products (What are the flaws and benefits of what they are offering?)
• Marketing (Who are they talking to?)

Tip 3

One of Sun Tzu's sayings is "All war is deception" and a lot of companies take this piece of advice with them. By simply reading a company's description of what they stand for, will not make it very clear for you on where they stand. You must look at their actions.

Research for Quantitative or Qualitative Data

Do you usually use qualitative or quantitative research in your design projects? And which one should you lean on?

Which research method you're going to learn from should mainly depend upon the project you are pursuing. Qualitative researchers aim to collect an understanding of human behavior and their reasons. This method is good for usage when searching to answer the questions why and how. Qualitative data research is recommended when a project is in its early stages as it will aim on a complete detailed description.

With quantitative research you strive to classify features and construct them in statistical models which will explain what is observed by the research. Here you'll use questionnaires or other tools to ensemble numerical data. Quantitative data is more efficient after the qualitative because it is able to test your hypotheses.

So in short, qualitative research is best for generating ideas while quantitative research is best when verifying the ideas. Make sure to take good use of both because they are in the end simple tools that are guided by your stated problem.

Conclusion

Market analysis helps you come to a final product because you understand the situation and point of view of another person. This person is the one who will be taking out money from his/her pocket and give it to you for the product. So, of course, there need to be a lot of value in what you offer. It can only be valuable when you understand what value is for that person.

Timing

Before ending this section, we need to recognize a further crucial aspect of market analysis. That is timing! When you research, you need to understand when certain products are appropriate. You might have a great product in mind, but wait too long to implement it so that when it launches the interest is gone. Or, maybe you need to wait before the market-interest of your offer grows into a need/want. Always think of timing.


If you enjoyed this post, make sure you subscribe by RSS!




2 Comments


    Trackbacks / Pingbacks

    show trackbacks
    1. [...] You Should Know about Creating a Strategy You've done your market analysis, and you have understood what the problems, values and beliefs in the market are. Now, it's time [...]

    2. [...] business plan itself should contain an in-depth description and analysis of the market you propose to serve. It should include as much demographic information as possible. This will help [...]

    Leave a comment, or ask a question