Market Research

Situation Analysis:

• A situation analysis is broken down into several different areas. These are: SWOT analysis, Customer Analysis (to establish a target market), Competitor Appraisal, and resource Analysis.
• The business must make a Situational Analysis based on the influences of the Macro environment, as well as the proximate environment
• Market Segmentation (target market) involves dividing up groups of people into buyers of certain products/services.

Customer Analysis:

A target market can be established by looking at the following factors:

• Where it is accessible (both the product and message)
• The demography (the population in a group or area(s)) of an assortment of places
• What size should the market be - In numbers (Sizeable?)- And in boundaries (Measurable)
• What are the identifiable factors of this market (how it differs to other target markets?)
• Psycho graphically - Lifestyle based/image of the target market
• Geographically - Which regions/areas
• Benefit - Focus on the benefit the product provides, for this target market, not on the customer characteristics
• Size - Frequency of use/level of demand in the target market, being heavy, medium, or light
• Using the above factors in formulating a group which satisfy all of the above points, you have now established a target market

Competitor Appraisal:

Once a target market has been established you must then analyze the competition (if any). There two three types of competition a company can have:

• Direct Competition - When one business approaches the customers of another business and attempts to win them over. This only happens when two or more companies are producing the same product.
• Substitute Products - Another type of competition which can come from one company producing a substitute product of another company’s product line.

Competitor Monitoring: This is a vital part of the market research. The best form of competitor monitoring, is to calculate their market share by estimating the total value of the market. If a competitor is gaining a greater market share, it is time for the company to re-organise their marketing plan. Competitive advantage refers to all things an organisation can do better than its competitors.

Resource Analysis:

Once you have completed a competitor appraisal you must then do a resource analysis. The businesses resources are broken down into three areas, these are:

• Staff - The marketing plan should analyse the skills of every employee involved in marketing. Your staff should be promoting the image you wish the public to think of the company. They should be well trained in areas such as the art of selling, good customer relations, and more. The people should have the following skills: Alertness, good knowledge of product, good appearance, good communication skills, and dedication to maintain the product in a competitive environment.

• Finance- Finance is needed for different methods of advertising or promoting the product. These needs vary according to the life cycle of the business. Finance is necessary for the promotion or development of new products

• Assets - The fixed assets of a business will determine the capacity of the production system. A successful product can be stopped from greater production if resources are at full usage.

SWOT Analysis:

This needless to say means an analysis of the:

• Strengths - which areas a business excels compared to its competitors

• Weaknesses - which areas other businesses has to improve on in relation to its competitors

• Opportunities - All things which benefit the business

• Threats - All things which can threaten a businesses survival, or a product's survival

Aspects which influence a SWOT analysis are:

• Market share - Sales – Profits
• Competition - Advertising - Size of customer base
• Pricing - Innovative potential.
• Product characteristics (company reputation, price, design, colour uniqueness, quality, warranty, packaging, sales support, and positioning in market)