Conducting regular market analysis has all sorts of benefits – so let's dive in.
Understanding market trends, consumer behavior, and the competitive landscape allows businesses to spot opportunities and navigate potential risks.
It can even give you some insights into potential products or services that would be received well by your target market.
Market analysis – or market research as it's often known – can tick a lot of different boxes.
Mastering market analysis is the key to success. Small businesses and entrepreneurs need it to break into their industries for the first time. Established businesses need it to confidently launch new products. PR teams need it to understand the challenges that lay ahead.
This quick guide expands on the core principles of market analysis and market research to offer practical steps and help you through the process. We’ll also share a few tools that will make it easier.
What is market analysis?
Market analysis is the close study of a market within a specific industry. It involves understanding the market's size, trends, customer behavior, and the competitive landscape.
Businesses need this information as it helps to forecast demand, spot market gaps, and determine the best strategies for expansion.
When done well, market analysis becomes central to your business plans.
Why it matters
Businesses must constantly adapt in an ever-evolving marketplace. Market analysis provides valuable insights that help businesses in all sorts of ways.
First of all, it can help you identify emerging trends. Whether it's new technology, shifting consumer preferences, or market shifts, proactively identifying trends allows businesses to plan accordingly and stay ahead.
Market research is also great for understanding customer needs and preferences. Through detailed consumer research, businesses can design products or services that meet the real demands of their customers, not just what they think will work.
In effect, market analysis helps you see what people want and need, so you don’t have to guess.
You can use it to evaluate the competition. Understanding who the competitors are, what they're offering, and how they’re positioning themselves in the market gives businesses a strategic advantage.
It will also help you mitigate risks. Analyzing the market helps businesses identify potential risks, including economic downturns, shifts in customer needs, or regulatory changes that could affect operations.
Finally, market analysis should align all the different parts of your strategy. By analyzing data, businesses can align their resources, marketing strategies, and product development with consumer needs and market opportunities, ensuring their efforts are as efficient as possible.
Types of market analysis
A thorough market analysis works on a few different levels, each providing different perspectives to aid in decision-making. Here’s a deeper dive into each type.
Industry analysis
Industry analysis provides an overarching view of your market. It includes assessing key drivers of change, overall growth projections, and understanding the various external factors at play.
For example, a company in the renewable energy sector might look at global industry reports to understand how government policies, technological advancements in solar panel efficiency, and increasing demand for sustainable energy solutions could influence their market strategy.
This kind of analysis not only informs business decisions but also positions companies to anticipate future market dynamics.
Market research reports can be a useful tool for this type of analysis. Sources like IBISWorld, Statista, or Bloomberg provide industry-specific insights, including market size, growth trends, and forecasts.
Competitive analysis
Competitive analysis is the examination of competitors within the market, focusing on their strengths, weaknesses, and market strategies.
By comparing your own business to your competitors, you can identify areas of improvement, differentiation, and potential threats.
For example, a new smartphone company might analyze its competitors to understand their product features, customer satisfaction levels, and market share. With this information, the company can differentiate itself by focusing on a unique value proposition, such as better battery life or superior customer service.
You can benchmark your performance against rival brands with competitor analysis software from Brandwatch.
Customer analysis
Customer analysis focuses on understanding your target market: the needs, preferences, behaviors, and pain points of your audience. This is crucial because meeting consumer expectations directly influences market success.
With this type of market research, if an online retailer notices through surveys that their customers value eco-friendly packaging and faster shipping, they can tweak their offerings to meet these demands, improving customer satisfaction and loyalty.
There are a couple of specific techniques that can help you with this. The first is segmentation analysis (dividing the market into distinct groups based on common characteristics).
The second is persona development (creating detailed profiles of ideal customers). Both of these help businesses tailor their offering to perfectly suit their audience.
Want to know more about your customers? Use a tool like Brandwatch's consumer research tool.
Market segmentation
Market segmentation goes hand in hand with customer analysis but focuses specifically on dividing the larger market into smaller, more manageable sub-groups.
This allows businesses to tailor their marketing efforts to each segment's different needs and desires.
For example, a global clothing brand might create distinct marketing campaigns for different segments. One targets young, style-conscious consumers, and another focuses on environmentally conscious buyers looking for sustainable clothing lines.
The goal is to segment your target audience so that you can deliver personalized messages and products that resonate with each group, leading to higher conversion rates and brand loyalty.
Real-world examples of market analysis
Understanding how market analysis plays out in the real world is a great way to understand its importance. Here are a couple of examples.
Ben & Jerry’s
Before launching a new ice cream flavor, Ben & Jerry's conducts extensive market analysis to gauge customer interest within their target market.
This includes analyzing customer preferences for flavor combinations, price points, and packaging. Their research allows them to select flavors that will appeal to specific market segments, increasing the likelihood of a successful launch.
Through market analysis, Ben & Jerry’s can forecast demand, determine the best way to market the product and ensure it meets consumer expectations.
Amazon Prime
Amazon continuously conducts market analysis to improve its Prime membership.
By evaluating customer data and feedback, Amazon identified that free and fast shipping, along with exclusive media content, were the main drivers of Prime membership renewals.
This information helped Amazon improve the service, leading to its expansion and increasing membership numbers.
In this case, market analysis provided Amazon with the data it needed to refine its product and enhance the customer experience, which in turn drove business growth.
Conducting market analysis step by step
Market analysis generally follows a fairly predictable process. This is so that you get the insights you need and don't miss any important points of research.
Below are detailed steps to help you conduct a thorough market analysis.
Step 1: Define your objective
What are you trying to achieve with your market analysis? Whether it's entering a new market, launching a product, or assessing the competition, defining your goal will help focus your efforts and determine the data you need to collect.
For example, a company launching a new product might aim to identify the demand for the product, potential customer segments, and key competitors.
Step 2: Collect data
Data collection is critical for any market analysis. Use both primary and secondary sources:
- Primary data: Gathered directly from surveys, interviews, and focus groups.
- Secondary data: Data collected from external sources, such as industry reports, social media platforms, and government statistics.
To analyze customer sentiment about a product, companies can conduct online surveys or analyze social media conversations using social listening tools like Brandwatch Consumer Research.
Step 3: Analyze the data
Once data is collected, it’s time to dig into the information. Use various market research methods like SWOT, Porter’s Five Forces, and PEST (Political, Economic, Social, Technological) to gather and make sense of the data.
For example, Porter's Five Forces looks at five specific areas to determine whether there's enough room for a new company to succeed in a given industry.
Those five forces are the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products or services, and the rivalry among existing competitors.
Step 4: Interpret your findings
Draw insights and determine implications for your business strategy based on your analysis. This may involve identifying opportunities, potential threats, or areas that require improvement.
For example, if a competitive analysis reveals that your competitors have a stronger online presence, your company might focus on improving digital marketing efforts.
Step 5: Formulate strategies
Based on your analysis, decide what actions you should take to achieve your business goals. This could include adjusting pricing strategies, enhancing customer experience, or refining product features.
So, say you've identified some specific market segments using customer analysis – you might then decide to launch a targeted marketing campaign to capture that part of your audience.
Tools for market analysis
Having access to the right tools helps streamline your market analysis.
Brandwatch Consumer Research allows businesses to monitor social media conversations, track sentiment, and analyze consumer behavior across digital channels. It's ideal for identifying trends, measuring brand health, and tracking competitor performance.
Another tool that could be helpful in market research is SEMrush. Great for competitive analysis, SEMrush provides insights into competitor websites, SEO strategies, keywords, and traffic sources. It helps businesses identify gaps in their digital marketing efforts and areas to outperform competitors.
Integrating Brandwatch into your market analysis
Brandwatch Consumer Research helps you conduct comprehensive market analysis in several ways.
By tapping into vast amounts of social media data, Brandwatch enables you to monitor your brand health and track public perception and sentiment around your brand.
The tool's social listening capabilities will help you understand exactly what your customers are saying about your brand – whether it's good or bad. You can use this to make decisions about what you do next.
You can identify market trends with Brandwatch. It's not just about listening to what people are saying about your brand – it's also about tuning into wider emerging trends and shifts in consumer behavior.
You'll find plenty of help with conducting competitive benchmarking. Get the data and analysis you need to understand your own brand's performance, and Brandwatch will help you compare it against your competitors.
Finally, the Brandwatch Consumer Research tool will also help you understand audience demographics. This feature will give you a clear picture of the demographics and interests of your audience and allow you to target your marketing campaigns more accurately.
Integrating Brandwatch into your market analysis process can provide a data-driven foundation for strategic decision-making.
The last word on market analysis
Whether you’re running a small business and launching a new product or tasked with assessing industry trends for a global brand, market analysis offers a comprehensive framework for informed decision-making.
A little market research will give you a competitive advantage over other brands and might even lead to some new business ideas.
It will also help with customer segmentation. This way, you can target your audience more effectively and hopefully boost sales and social media engagement.
On an industry level, you'll be better able to predict future trends and better understand the factors that drive consumer spending. This should all combine to improve your advertising efforts.
With tools like Brandwatch Consumer Research, companies can dive deeper into social media insights, uncover consumer sentiment, and tailor strategies that resonate with their target market.
By integrating these steps and tools into your business strategy, you’ll be able to unlock new opportunities, mitigate risks, and drive growth in 2025 and beyond.
