Your comprehensive guide to market analysis

Long decades ago, companies did not care much about understanding their customers and their target audience in general, or what we call market analysis today. Due to the few or no options available to customers at times! Consumption was almost guaranteed, and competition was limited to a few companies in the market.

But with the multiplicity and abundance of companies, and most countries of the world adopting the open capitalist economic approach, competition intensified and it became necessary for everyone to understand who they will deal with to satisfy and meet their desires to win, then new terms and concepts such as (buyer personality, target audience, improving user experience) appear, and accordingly we will try today Simplify the steps of market analysis by focusing on how to understand the target audience in particular.

table of contents:

What is meant by the term market analysis?

It is an overall and comprehensive assessment of the market related to the field of activity of the company, and it is one of the elements of the project feasibility study, and it may sometimes be a step before it or an action after it to break into new markets or develop certain products. This assessment includes several aspects, the most important of which are (the size of the target market, segments of potential customers, and the study of competitors).

Although it may seem to some to be a somewhat complicated process, it is very necessary to understand the target market, the target audience segment, and the rest of the other elements. In fact, any business owner can conduct a market analysis himself in a few steps, as we will see. In other words, it is more technical (an analytical process for available data about the target market) using statistical and inductive mathematical methods.

The importance of market analysis

In general, the goal of analyzing the target market is to upgrade and prepare your company's business activity, enhance competitiveness, and serve potential or actual customers in the best way (or what is called (improving user experience), in addition to:

  • Highlighting your experience in the market, and its attractiveness to you.
  • Efficient sales forecasting, which allows for determining the appropriate budget for the work.
  • Improving the quality of products and services, while improving conversion rates.
  • Improving the efficiency of the decision-making process and defining future visions and perceptions.
  • Achieving the best possible marketing plan, which is accurate and not random or general.
  • Creating a competitive advantage to outperform competitors and remain in leadership, and is called (competitive analysis).
  • A deeper understanding of the target audience after defining it, especially the part related to their desires and aspirations.
  • Increasing the company's profits, and is one of the indirect benefits that most of the company's vital functions fall into.
  • Reducing risks and protecting work, especially by conducting a SWOT analysis to identify strengths, weaknesses, opportunities, and threats to work, and to avoid wasting time, effort, and money on meaningless operations or expansions.
  • Evaluating the performance and profitability of the activities practiced as “feedback” and identifying past mistakes to avoid falling into them again, correcting and amending what is required, preserving the gains, and canceling and writing off what should be canceled.

The benefits of conducting a market analysis are not limited to the later stages of projects and businesses. Rather, market analysis is part of the business model and feasibility study, and is not linked to a specific time stage in the life of the company. It is preferable to conduct market research periodically as needed every “one or two years…” to keep abreast of developments in the market, work, and information technology environment.

Market analysis steps

As we mentioned above, the process is not that complicated, but only requires research efforts and time allocated for that, and in general, it can be said that what is agreed upon in the field of entrepreneurship is that the following steps must be passed:

First: What exactly do you want from your market analysis?

That is, you must identify all the motives that drive you to study the market. For example, do you aim to achieve external goals that are more market-related or internal to the organization? Or both, and here are examples of both goals:

  • External goals: such as identifying who your competitors are and studying and exploiting their strengths and weaknesses, identifying who are the potential customers you want to target, or preparing a comprehensive and strong file to persuade those you wish to borrow from or attract investment.
  • Internal goals: such as improving one of the internal functions of the company as a process (production, marketing, sales forecasting, or improving financial liquidity).

In addition to that, identifying the strengths and weaknesses of your organization, the opportunities available to it, and the threats it faces, and if the aim of this market study is to do so, it is better to rely more on conducting a SWOT analysis.

Second: Draw up a detailed outline of the stages of your work

It means being precise in describing the stages of your work since it began: Where was it and where did it arrive, i.e. today and where is it heading? In this, you will need all previous data related to your business and current data to measure the volume of previous sales, for example, the volume of internal vital operations, and other things related to measuring the business growth curve, then predicting the future to orient the future and developing a special vision, all of this will facilitate the following for you later:

  • Attracting and persuading investors.
  • Gaining a competitive advantage.

Third: Targeted Audience identification

And by them we mean the target audience that you will deal with, that is, the candidates to acquire your products or benefit from your services, who are supposed to be on a narrow and not open targeting range. Because opening targeting, although it is tempting and attractive on the surface, is in fact a waste of time and marketing effort in particular, because everyone can't want what you offer, otherwise the business will become easier than drinking water. Accordingly, focus your efforts on one category and follow these steps to identify the target customer segment, then make an effort to understand them well, and this is achieved by knowing:

1. Geographical scope

Where are your customers? Where is their geographic area located (country, county, city, etc.), and again (the narrower the targeting, the better the results). For example, if you own a chain of gas stations, you will have to conduct market research at the national level, not just the local level, that is, according to the need and the spread of your customers.

2. The demographic aspect

It includes information such as: (age, gender, religion, …) and everything related to population and demographic statistics that you will often find in official statistics carried out by governments or unofficial ones carried out by local, regional, or international organizations, and other secondary sources for target audience analysis.

3. The technical side

It is necessary to know what kind of electronic devices potential customers use and their operating systems, such as: Do they use smartphones more than computers? And if the answer is yes, what is the most popular operating system among them (Android or IOS) and so on. Because technical differences make the difference, especially with the increasing importance of digital work, for example, the structure of displaying an online store on the phone differs from the computer in terms of image dimensions, available buttons, advertising banners, and so on.

4. Personal traits

It includes: the nature of the customers’ lifestyle, their social classes, their financial capabilities, and their personal beliefs - not necessarily religious - then we have the customs, traditions, cultural backgrounds, academic qualifications, etc.

Example: Zaid wants to establish a start-up meatpacking company in Switzerland, knowing that the percentage of vegetarians is very large. Would this be a better option for him than if he did it in a country like Indonesia or Brazil, where the percentage of meat consumption is high and the percentage of vegetarians is low until it is almost non-existent!

5. Behavioral traits

At this stage, all you have to do is observe and measure users' reactions and interactions with your products or services, by (analyzing the data of your marketing campaigns, conversion rate, and traditional or digital surveys such as Survey Sparrow...)

You can resort to technology because it has made it easier than before, and you can use tools to measure interactions with what you offer, such as Facebook Insights, Google Trends, Google Analytics, or keyword-finding sites that show audience trends and what they are searching for the most, such as SEMrush or Ahrefs.

According to the American entrepreneur “Seth Godin”, although it is important to define and understand your target audience, you should not neglect designing an appropriate user experience and then constantly improving it, and he adds:

Don't look too much for customers for what you offer, but create products and provide them with good services

6. Monitor your competition

It will also help you identify potential customers and understand them well because if your activity is similar to that of your competitors, it will be obvious that you participate in the same customer category with a very large percentage.

The most important benefits of target audience analysis

It is represented in the ability to price products as best as possible thanks to knowing the purchasing power of potential customers and facilitating access to customers after knowing where they are located, whether spatially, by phone, or electronically, in addition to all of that, determining the proportion of demand in the market, as well as the size of supply. Here are also these tips and guidelines that would be good to take while analyzing the target audience:

  • Create a buyer persona profile

By visualizing your ideal customer persona and modeling it for your other customers, not a single buyer persona. Rather, it is preferable to prepare two or three files as a precaution and diversification, and for a better understanding of the clients who are impossible to be alike in their group, due to their different tastes, personalities, motives, and capabilities.

  • Change your customers

Keep in mind that your potential or current customers will not necessarily always remain loyal to your brand, due to the intensity of competition or poor user experience that they may experience at some point, or to change their tendencies, trends, and tastes. Whatever the reason, try to keep them as long as possible, by enhancing contact with them and following up on their aspirations - improving the user experience - while preparing a plan (b) to attract new customers when it becomes necessary.

Fourth: Competitive Analysis Scheme (Watch your competitors)

No offense. The beginning will be by identifying your competitors: their number, type of activities and degree of closeness to your activities, and their scope of distribution, then arrange them based on direct and indirect competition, analyze their behavior in the market, and their reactions, and finally try to identify their strengths, weaknesses, opportunities available to them and the threats that they may encounter. And that is bypassing the data that you will get all on the (SWOT) test, to then be able to identify your competitors who are the most threatening to your business and the least dangerous ones, exploit their pitfalls and discover their gaps and fill them in your work.

For example, you can simply acquire a product for one of your competitors, then analyze it in terms of price, quality, components, how it is shipped, and whether there are additional services provided after selling it, such as maintenance or consulting services. You can also enter your competitors' accounts on social media to analyze their paid and free advertising campaigns, the number of their followers, the nature of their publications, the ways they interact with their customers, the discounts and discounts they launch, specifying their seasons, times and size, and the extent of professionalism of their logo and visual identity, as well as the matter for their website if they have one. or their online store and so on.

Fifth: Analyze the data you collected

Before that, if you think that it is still possible to collect more information and data, then there is nothing wrong with more of it. Data is your strategic ally in the journey of conducting a market analysis, and the more available it is, the better and more accurate results you will get. Now, before analyzing the information you have, check that it is:

  • It is not based on emotion or prejudice.
  • Accurate and detailed rather than general.
  • Realistic, measurable, and practical.
  • Closely related to work and not too far from your field.

Now classify and then arrange them under different names in several sections and paper files or in electronic documents, then summarize them to make them easy to view and understand, especially if your goal is to study the market externally, such as attracting investors. Of course, saving it is more than important, because you need it later in future market research that you may do.

After the general analysis, you should find yourself answering the first questions and confirming or denying the hypotheses that you put forward, such as:

  • How big is my business? What are the opportunities available for your project?
  • How much will your business grow? What are the prevailing buying trends?
  • Is the market ready to accept the new product that I intend to launch soon?
  • Do potential clients want to do business with me? And what will prevent them from doing so? And what about the investors?

And other basic questions under which most of the other sub-elements related to the market and its size fall.

Types of market research

Or rather, the sources of data and information used in market analysis, which are many and varied, differ according to the different types and fields of markets but often do not deviate from the framework of these types and the following sources. It should be noted that primary studies are preferred over secondary ones, as we shall see:

1. Primary studies (internal sources of data)

It means the process of collecting data by the company in person or electronically, such as conducting direct or electronic surveys about one of your products or services, or personal meetings with several potential or actual customers and asking them about their opinions and taking their impressions and writing down their aspirations and desires. These sources also include the conversion rate, click rate, access rates to landing pages, completion of the purchase process, positive or negative interactions with the project pages on social networking sites... and other parts that allow the user experience to be measured electronically.

2. Secondary Studies (External Sources)

You can obtain it by searching government or unofficial reports, field academic studies in particular, magazines, newspapers, and data that competitors have by looking at their sales volume and customers, and these sources, despite their importance, may not be a substitute for primary sources that remain more accurate because their targeting range is narrower. And its circle is smaller. Also add infographics, websites, and large TV channels.

Relying on primary studies more than secondary ones does not mean neglecting the latter. Rather, it is preferable and strongly advised to rely on both sources to conduct market research as it should be to overcome the obstacles of market analysis.

Target audience analysis methods

Conducting interviews, whether in person or remotely, using visual communication, will allow you to read the client's body language while answering these questions, and will give him more room to express his opinions and aspirations than chatting, and all you have to do before that is:

  • Prepare questions

Let the questions directed to your customers be more detailed and specific, to avoid getting answers such as “yes or no”, but rather more accurate answers that contain new points of view, justifications, and ideas.

  • Choose a customer sample

Especially those who are more commercially loyal, because they are more knowledgeable and aware of the company's products and services, then summarize and classify the answers after customers answer them and arrange them, and finally extract general ideas and develop a plan of action based on the results of those personal meetings after analyzing them.

  • focus group method

Similar to the method of conducting interviews one difference is the selection of th. These customers are in the field of the company's activity, such as if your company specializes in the production of office chairs, so specific samples consisting of (decoration engineers, office staff, orthopedists, etc.) are selected. These are related to the office chair product When produced, the aesthetic aspect of decoration, the practical aspect of the experience of office staff, and the health aspect of orthopedic and joint doctors must be taken into consideration, because it may cause back and neck pain.

  • Opinion poll

Mostly electronic, polls are conducted via websites or social media pages, such as Facebook or Instagram, or via email lists. Previously, it was conducted through newspapers and magazines, and field statistics teams. You can use an office or experienced individuals to conduct operations, such as personal interviews, questionnaires, etc., and this may be a good option if you do not have enough time or experience.

The main obstacles to market analysis

Not all of them will affect you negatively because sometimes their presence is positive! Yes, as I heard, because its impact will not be on you alone, but on your competitors as well, which may prevent them, even temporarily, from expanding and growing rapidly, meaning that it may protect your business from fierce competition, the most important of which are:

  • The need for very large or long-term investments.
  • The need for very advanced technologies, and here we do not mean only digital technologies and equipment.
  • The very high cost of marketing is aimed at promoting and promoting the brand.
  • Some local laws and licenses govern your business and industry.
  • The need for greater and more privileges, such as access to large suppliers and contracting with exclusive distributors.

And because these obstacles and barriers are related to the performance of the work team, the quality of your business activity, and the pattern of administrative management, it is very difficult to give general advice to overcome them. So the only advice is to try to take advantage of these obstacles and invest them in finding appropriate answers to each one of them separately and not to take them as a whole or try to overcome them all at once!

Porter's five forces model

It appeared in 1980 by Michael Porter, a professor at Harvard Business School. According to the model, Porter assumes that 5 major competitive forces represent almost every business field. The role of this model is similar to the SWOT test, whereby these five forces can measure the intensity of competition and market attractiveness. And the size of the expected profits, and these forces are:

  • The degree of competitiveness: that is, the number of direct and indirect competitors, and their influences, capabilities, and capabilities. The more intense the competition, the lower the company's chances in the market, and vice versa.
  • Market barriers: The larger and stricter they are, the more difficult it is for new entrants to enter the market, and this makes the company indispensable for facing new competitors, and thus greater flexibility and longer control. For example, the conditions set by the Stock Exchange for new companies wishing to be listed to trade their shares and raise their value in front of investors.
  • The number of suppliers: the greater their number, the lower their power and influence on companies, and the companies become more powerful, because there are multiple options, unlike if the number of suppliers is less then their power increases and they become one of the controllers in the markets by imposing their prices and conditions.
  • Customer Influence: The larger the customer base, the less able they are to negotiate and impose their terms. So companies increase their strength and make them more flexible and controllable in everything related to customers.
  • Alternative products: Although they are not necessarily similar to the company's original product, they may represent an increasing threat at some point.
  • Official authorities: It is considered an influential force, but not independently. Rather, it is affiliated with the previous powers that we mentioned, and Porter added it as a secondary force.

After we have seen the most important stations of how to analyze the market and study competitors, it becomes clear to us the importance of this vital process, to which many internal and external operations of the company are linked. Perhaps the most important thing to focus on when conducting market research is “understanding the target audience” because it is the cornerstone of business activities. all of which.