After the goals of market analysis are defined and the plan is drawn up, it is necessary to choose the methods of market research and tools for conducting it. In essence, market analysis is the collection of information and its subsequent processing. And to collect and systematize the necessary information, various methods of market analysis can be used. They can be roughly divided into three categories:
- quantitative. These are all data that can be counted and compared, such as survey results. Quantitative research allows you to understand the buyer, find out his opinion about the change in the range, price increases, the quality of goods and services. Calculations also help in the preparation of various forecasts and statistics. Quantitative methods are the most objective;
- quality. The results of using such methods are information that cannot be calculated. However, it should also be taken into account when developing a business development strategy. We are talking, for example, about the behavioral factors of the target audience, the opinion of analysts and competitors. Of course, this kind of data is subjective;
- mixed. There are times when it makes more sense to combine the benefits of quantitative and qualitative methods, including in terms of budget savings. Such mixed methods include hall tests, home testing, observation.
Quantitative research accounts for more than 80% of all data collected, qualitative research accounts for much less – less than 15%. To get a complete picture, when analyzing the market, it is worth using both methods of research.
What are commonly used data collection methods?
In depth interviews. Interviews with representatives of the target audience, that is, with consumers. Interviews are qualitative methods of collecting information, so they are usually used before conducting surveys. This method allows you to determine the underlying motivation, fears, barriers – in other words, insiders.
Expert interviews. The interview can be taken not from the consumer, but from the expert. It can be an analyst, a marketer, an employee of a company or an association, an industry union, a journalist studying the desired topic.
Focus groups. This is a kind of round table with representatives of the right audience. Consumers are asked to give detailed answers to all questions. To manage the discussion and voice questions, a moderator is assigned to the focus group.
Polls. It is better to ask the consumer directly about what the consumer needs. The survey can be conducted on the street, in retail outlets, by phone or online. In this case, representatives of the target audience or potential consumers will be involved.
observation. Observing the target audience allows you to understand their needs and desires. For business development, for example, information such as product selection criteria and frequently asked questions to consultants can be useful.
Desk research. On the Web – on the websites of statistics, official departments, tenders, industry communities, social networks – you can find a lot of useful information for analysis. This method also includes discussions among representatives of the target audience (including in social networks and forums), articles on topics related to the product or service, scientific research, and so on.
Benchmarking. This method of market research will appeal to those who believe that it is better to learn from the mistakes of others. Benchmarking is the study of business processes of competing companies (available for study by research methods).
Once the data is collected, you can begin to analyze and structure it. For this, the following tools are used:
Calculation of indices and indicators, including in dynamics. This part usually accounts for more than 80% of the data in a study report. As a rule, this includes:
- general overview of market indicators (capacity, market potential, niches and segments, market structure by segments, regions, competitors);
- consumer analysis (portrait, frequency of purchases, average bill, selection criteria);
- competitive analysis (market shares, customer satisfaction, geographic presence);
- brand or trademark strength (recognition indicators, advertising visibility, recognition of advertising, logo, name or slogan).
If you want to structure recommendations for further development, other tools are also used:
- SWOT analysis. The information obtained is entered into a table consisting of four columns. The first describes competitive advantages, the second describes weaknesses compared to competitors, the third describes opportunities, and the fourth describes threats and risks (for example, low demand, a large number of competitors, and so on).
- PESTLE analysis. Using this method, an assessment is made of the legislative aspect, economic (primarily the solvency of the target audience) and social factors (an analysis is made of the demand of consumers belonging to a specific population group). Geography, environmental conditions and technologies that need to be involved in business are also studied.
Porter’s Five Forces analysis. This method allows you to identify factors that affect the attractiveness of a product or service. The data is analyzed in five areas. Thus, the risk of substituting products appearing on the market, the risk of an increase in the number of competitors, the level of influence of suppliers, the level of influence of consumers and the level of development of existing competing firms are studied.
The results of any marketing research of the market should cover the set goals. If so, then based on the data obtained, an effective business development strategy can be drawn up.