How to Do a Market Analysis (Step by Step)

This station volition springiness you a wide and applicable model for conducting a marketplace analysis.

We’ll commencement with the basics first. Then determination connected to discussing the nonstop steps you request to instrumentality to analyse immoderate market.

Let’s begin.

What Is a Market Analysis?

A market analysis is the process of learning everything you tin astir your people market. It’s similar doing your homework to hole earlier launching and increasing your business.

And performing a marketplace investigation has galore benefits. For example:

• You tin estimation your market’s full size and potential. To find whether your concern volition beryllium viable and profitable.
• You tin place your people customers and their needs and preferences. So you tin make the close selling strategy to pull them.
• You tin analyse your competitors and their strategies. So you tin formulate plans to outperform them and turn your marketplace share.

In short, a marketplace investigation helps you turn your concern faster and smarter. 

But however bash you execute a marketplace analysis? And what are the champion tools and methods to use?

Let’s find out.

How to Do a Market Analysis

Follow our seven-step process to analyse immoderate market.

1. Determine the Purpose of Your Analysis

Take a infinitesimal to inquire yourself wherefore you’re doing this analysis.

Is it due to the fact that you’re launching a caller merchandise and request to measure the full marketplace landscape?

Or possibly you’ve already launched your merchandise but are present looking to find the champion channels for marketing.

Your intent could beryllium related to thing you privation to larn about. And it's going to signifier your full analysis.

Here's the champion mode to nail down your purpose:

1. Grab a pen and insubstantial (or unfastened up a caller Google Doc)
2. Write wherefore you privation to bash a marketplace analysis. Don't overthink it—just constitute immoderate pops successful your head.

For example:

You’re doing a marketplace investigation to motorboat a caller accounting software. And your extremity is to find answers to these questions:

• How large is the accounting marketplace and does a concern accidental exist?
• Who are your perfect customers and what are their unsocial characteristics?
• Who are the existing players successful the marketplace and however bash they presumption themselves?
• What are the champion ways to scope and pull your imaginable customers?

Based connected the analysis, you’ll determine the champion mode to motorboat and turn your business.

2. Research Your Market’s Overall Landscape

Now that you’re wide connected wherefore you’re doing a marketplace analysis, it’s clip to get a bird’s-eye presumption of your marketplace utilizing a market probe tool. And stitchery accusation similar marketplace size, competitors, opportunities, etc.

Use Semrush’s Market Explorer instrumentality for this.

Open the instrumentality and prime the “Analyze Category” tab. 

Then, take your manufacture from the drop-down paper and click “Research a market.”

You’ll get a high-level overview that touches on:

• Market Consolidation: A debased level of consolidation means determination are galore smaller businesses successful the market, and you person a bully accidental to participate this space
• Market Traffic: The full magnitude of imaginable website postulation successful your market. The higher this number, the better.
• Market Size: The full fig of imaginable buyers successful your market

Remember: 

You’re not deep-diving into details astatine this stage. 

You’re getting a high-level presumption of your industry. To amended recognize its dynamics and however your concern could acceptable into this bigger picture.

You’ll besides spot which countries contiguous the champion opportunities for your concern erstwhile you scroll down to the “Market Geo Distribution” section.

Use this accusation to find which markets are worthy pursuing. And cognize that markets with a precocious magnitude of postulation are apt to beryllium much lucrative. 

You’ll besides spot existing players successful the market.

Don’t look into excessively galore details yet. Just get a wide thought of who you’re competing against for now.

We’ll behaviour an in-depth investigation of these competitors successful the adjacent step.

3. Analyze the Competition

A large portion of doing a marketplace investigation is studying your competitors.

Having a heavy knowing of your competitors’ merchandise offerings, pricing, and selling tactics helps you spot gaps successful your marketplace and beforehand your products effectively.

Here’s however to analyse your competitors:

First, sojourn their websites. 

Learn astir which products oregon services they connection and however they presumption them. And look for gaps oregon areas wherever your merchandise could supply unsocial value.

Second, look astatine their pricing. This volition springiness you an thought of however you comparison to akin products oregon services successful the market. 

And third, survey which marketing channels competitors are using. If definite channels are already moving good for your competitors, they’ll astir apt enactment for you, too.

Use Semrush’s Traffic Analytics instrumentality to spot which selling channels your competitors are using.

Open the tool, participate a competitor’s website, and click “Analyze.”

Then, spell to the “Traffic Journey” tab. You’ll spot which selling channels are driving the astir postulation to your competitor’s website.

If you spot astir of the postulation is coming directly, that means they’re heavy focused connected branding and accepted advertising.

But if you spot a important chunk of postulation coming from integrated search, it indicates they person a strong SEO strategy successful place.

And if email is simply a large source, it’s evident they’re leveraging email marketing effectively.

This accusation is large for your selling analysis. So usage this information to prioritize your ain selling channels.

4. Get to Know Your Target Audience

The adjacent measurement is to absorption connected radical who truly matter—your target audience.

Successful businesses lick a occupation for someone. Your occupation is to fig retired who that idiosyncratic is. To debar wasting your resources.

So, wherever bash you start?

Use assemblage probe tools like One2Target.

This gives you each the accusation you request to amended recognize your people audience.

Open the tool, participate astatine slightest 1 competitor’s website, and click “Analyze.”

You’ll archetypal spot demographic accusation astir this audience’s age, gender, and location:

Go to the “Socioeconomics” tab to larn astir their household size, income level, employment status, and acquisition level:

You tin adjacent spot which societal media platforms they usage by going to the “Behavior” tab.

How tin you marque usage of each this information?

Let’s interruption it down:

• Age and gender: This gives you an thought of the benignant of connection and references you should usage successful your selling materials. For example, if your assemblage is predominantly millennials who are women, that lets you cognize what types of examples volition beryllium astir applicable to them.
• Household size and income level: These tin bespeak your audience’s purchasing powerfulness and lifestyle. For example, an assemblage with a little income whitethorn request much convincing astir your product’s worth for the terms it commands.
• Employment presumption and acquisition level: This tin springiness you insights into however your assemblage mightiness marque purchasing decisions. For example, a highly educated assemblage mightiness admit much detailed, method accusation astir your merchandise oregon service. 
• Social media level use: This tells you which societal media platforms to absorption on. If your assemblage spends astir of their clip connected Instagram, it doesn’t marque consciousness to enactment each your effort into X (formerly Twitter).

Understanding these assemblage characteristics helps you tailor your marketing. 

The much you cognize astir your audience, the amended you tin marketplace your product.

5. Gain Deeper Insights Into Your Audience’s Needs and Preferences

Now that you recognize who your people assemblage is, it's clip to excavation deeper into their needs and preferences. So you tin presumption your merchandise oregon work arsenic the cleanable solution for them.

There are a fewer ways to uncover your audience's needs:

• Online surveys: Create a abbreviated survey asking radical astir their needs and preferences. Offer an inducement for participating and administer it via integrated societal oregon adjacent paid ads. You tin usage tools similar SurveyMonkey oregon Typeform to make surveys.
• Focus groups: Bring unneurotic six to 8 radical from your people assemblage and mean a treatment astir their needs. Watching them interact provides qualitative information nary instrumentality tin springiness you.

Once you've gathered each this data, look for communal themes to place your audience's halfway needs. 

For example, if you support proceeding they privation much flexibility oregon convenience, those are problems your merchandise should solve.

This accusation besides allows you to tailor your messaging. By including their desired benefits prominently successful your selling copy. 

The much you tin presumption your concern arsenic the reply your assemblage needs, the better. 

6. Perform a SWOT Analysis

After researching the wide market, the competitors, and the people audience, displacement your attraction inward by performing a SWOT analysis—a method that helps you measure your ain strengths, weaknesses, opportunities, and threats successful narration to your market. 

It tin assistance you place what makes you basal retired from your competitors, what areas you request to amended on, what opportunities you tin pursue, and what risks you request to avoid.

To execute a SWOT analysis, you request to inquire yourself immoderate questions astir each of the 4 categories:

• Strengths: What are your advantages? What bash you bash good oregon amended than others? What unsocial resources oregon capabilities bash you have?
• Weaknesses: What are your disadvantages? What bash you request to amended oregon avoid? What are the gaps oregon limitations successful your resources oregon capabilities?
• Opportunities: What are the favorable trends oregon conditions successful your market? What are your customers’ unmet needs oregon problems? Which caller oregon emerging technologies tin you leverage?
• Threats: What are the unfavorable trends oregon conditions successful your market? What are the challenges oregon obstacles that you face? Which caller oregon existing competitors endanger your position?

Identifying marketplace trends is hugely beneficial for doing a SWOT analysis. Which you tin bash by speaking to experts successful your niche, attending conferences, and studying manufacture reports similar those from IBISWorld, Statista, and industry-specific publications.

Then, you tin signifier your answers successful a array similar this:

This measurement tin assistance you summation insights into your marketplace and your competitory position. 

You tin usage it to make strategies that leverage your strengths, code your weaknesses, capitalize connected your opportunities, and mitigate your threats.

7. Put Your Findings to Work

Take everything you learned from the probe you’ve done and use it to your company.

The extremity of a marketplace investigation isn’t conscionable to cod data—it’s to usage that information to marque smarter decisions to turn your business.

Here are a fewer ways you tin bash that:

1. Refine your unsocial selling proposition (USP): Use what you’ve learned astir your contention to sharpen your USP. Did you uncover a diagnostic that your contention doesn’t offer? Maybe that’s worthy highlighting connected your website and successful your selling materials.
2. Improve your selling transmission mix: Use your insights astir wherever your assemblage spends clip online and which selling channels your contention uses to amended scope prospective customers. It’s each astir reaching the close radical astatine the close spot with the close message.
3. Mitigate risks: Leverage your SWOT investigation to expect challenges and physique contingency plans. By acknowledging your business’s threats and weaknesses, you tin make a strategy that includes ways to flooded these obstacles earlier they adjacent go issues.
4. Seize opportunities: Use the trends you've identified to enactment up of the curve. If you've spotted caller technologies oregon shifts successful user behavior, see however you tin accommodate your merchandise oregon work offerings to align with them. 

And support this successful mind:

Doing a marketplace investigation isn’t a one-time exercise. 

Your marketplace is ever changing. So, you request to regularly show it to stay competitive.

Conduct Your First Market Analysis

Now that you cognize however to behaviour a marketplace analysis, instrumentality the adjacent measurement and effort it for yourself.

It’s not rocket science. With the close tools and framework, anyone tin bash it.

And Semrush has a suite of marketplace investigation tools that tin assistance you done astir each measurement progressive successful doing a marketplace analysis.

Sign up today.