How to Gather Market Information
The aim of a market assessment, customer identification and targeting, and competitive examination is to gather the information that provides knowledge of both the potential customer and the marketing channels as the basis for a successful marketing strategy. It’s also necessary to predict the demand and revenue generated to set the targets for the post-launch analysis of the success of the marketing.
The first questions you are trying to answer will identify market size and focus areas and indicate the necessary scale and timing of the investments: How big is the overall market today? How rapidly is it growing? And what segments are most interesting?
You must distinguish between the addressable and available markets. The addressable market is the total revenue opportunity for the products and services. The available market is the portion of the addressable market for which you can realistically compete. This is based on many factors, including geography, resources, capacity constraints, etc. You will focus on collecting data to size the addressable market. Much of this can be done online. Sources include market studies, journals, and government reports.
You should begin by quantifying and segmenting the market using spreadsheets for each market segment and listing key variables. Using the variables you collect, you will estimate the available market. The goal is to determine which market segments you should pursue.
The questions you are looking to answer are:
- Who are your potential customers, and where can they be found? What is the size of the market? How fast is the market growing? Can the market be segmented? What types of people will pay for this product and service? Do the product and service have limited appeal based on geography? What is their purchasing/adoption process?
- What competition is out there? Is it direct or indirect, local, national, or international? Who are the competitors, and why are they successful? What do potential customers like about the competitive products/services? How do competitors reach the market? Are the competitors making any changes? How are competitors’ fees, operations, and marketing structured? What types of marketing strategies are prevalent with competitors? Is there customer loyalty within the industry? What are the financial characteristics of competitors and the industry? What are the predicted competitive reactions? What are the expected market shares?
- What challenges do people face in using existing products/services, and what requirements are not being met? To what extent are users of current products/services satisfied with these products/services and their suppliers? (This will identify any gaps in the market.)
- Can the product and service stand the test of changing trends or take advantage of it before it dies out?
- Does the law of the land allow for such a business to be established? What regulations affect the industry?
You will also analyze customers’ current purchasing/adoption process for competitive projects to enlighten your understanding of the stages a prospect goes through from understanding they need your offering, evaluating offerings, purchase/adoption, and renewal. For each stage, there will be factors that will move the prospect to the next stage more quickly and factors that will cause the prospect to slow down or drop out of the purchasing/adoption process altogether. Early identification will inform the creation of your marketing materials and conversion funnel later on.
In performing the competitive analysis, you will include any competitors that you have already identified, in addition to any others that you discover while conducting your exploratory research.