Market intelligence is an important tool for any trader. Without knowledge of the industry, it is impossible to achieve spectacular success. By acting in the dark, you can easily make a mistake that will cost your brand a lot.
There is always some risk involved in starting a business in an unfamiliar area. Developing a competitive advantage and achieving the set goals requires making the right decisions and thoughtful steps based on the market realities. That is why market recognition is so important. What is it and how to conduct it? We advise!
What is Market Recognition?
According to Jerzy Dietl, a professor of economic sciences, market recognition is "a complex of activities leading to the knowledge of market phenomena, factors and processes, their origins, current shape and development trends".
Market Recognition is thorough research that evaluates the market in terms of attractiveness. In other words - it is obtaining data on market mechanisms, phenomena and processes taking place on the market, and trends that govern it.
The analysis shows how a given market works - it determines whether it is worth investing in it. The research should take into account such elements as:
- the size and pace of market development,
- ways of operating and profitability of typical activities on the market,
- entry costs and costs of possible exit from the market,
- preferences and expectations target audience,
- sales systems and distribution networks,
- the actions of competitors and the characteristics of successful businesses.
The key to success, apart from the analysis itself, is to draw logical conclusions and use them in the company's development strategy.
Why is it worth doing a market analysis?
In order to achieve the set goals and be successful in the industry, a company needs a decent one development strategy. The strategy should be detailed, well-thought-out and… based on a thorough market analysis.
A carefully conducted diagnosis is an opportunity to learn about the specificity of the market - it allows you to gain comprehensive knowledge about all areas of the market as well as the mechanisms and processes that take place there. Drawing conclusions from the study is a way to minimize the risk of making business mistakes that may have a negative impact on the functioning of the company. Thanks to this, you can gain a competitive advantage and strengthen your market position.
Market intelligence is also a way to forecast demand, and therefore sales support, the basis for establishing an appropriate marketing strategy and help in determining the direction of further development of the company.
Who is market recognition for?
Recognition of the market can be used by both start-ups and those that have been in the industry for some time. For the former, it is a good preparation for entering the market - checking their real chances for development and profit. For others, it is a way to improve their business by adjusting their activities to the realities of the market, new situation or competition.
Market intelligence is a useful tool also for the company that is planning launching the product on the market or entering new markets. The data obtained from the analysis will enable the company to better plan its marketing strategy. Recognition may protect the company against potential mishaps - e.g. failure to launch a product, loss of a stable position on the market, and even bankruptcy.
Market recognition methods
We can analyze the market in several different ways. The choice depends on the needs of the company and the information it wants to obtain.
There are 3 main methods of market recognition:
- desk research,
- market interviews,
- research with clients.
- Desk research
Desk research is a research method consisting in collecting and processing data from publicly available sources. It is called the analysis of existing data.
Data for the study can be obtained from such sources as:
- reports,
- statistical yearbooks,
- market reports,
- press materials,
- competitors' offer catalogs,
- industry analyzes and publications.
The advantage of the desk research method is easy access to many sources of information and the credibility of this information. However, this method will not work for companies operating in niche markets where the data is incomplete or does not exist at all.
2. Market interviews
Market interviews are a way of identifying the market by interviewing experts in a given field. This method allows you to learn about market opportunities and threats as well as prospects for a given business in the near future.
Information about a given market can also be sought from industry journalists who know the specificity of the market very well and are at home in a specific field.
3. Research with clients
Market recognition is also a broader look at customer needs. Quantitative surveys (e.g. surveys), which can be prepared and sent to recipients via the Internet, are a great way to conduct research among customers.
Draw conclusions
Market analysis methods will be effective if the company draws conclusions from the collected information and makes appropriate statements and reports. A great idea is to use a SWOT analysis, which will show the general situation of the company on the market, by identifying the strengths and weaknesses of the company, as well as opportunities and threats arising from the environment. It is worth repeating the SWOT analysis on a regular basis to easily plan short-term goals and modify long-term goals to adapt them to the realities of a changing market.
The data obtained from the above market intelligence methods can also be used for portfolio analysis. In this case, consider:
- market size - how many potential customers are there,
- market capacity - how many products can be sold in a given time,
- market dynamics - how will the sales index change in specific time intervals,
- market share - how you have to sell a company to total sales.
Portfolio analysis shows what strategy the company should follow in order to achieve maximum profits.
Proper market recognition is the key to success.
We effectively conduct market analyzes in every industry!
How long does market research take?
The duration of the market analysis is determined individually for each company and primarily depends on the problem under consideration. Other aspects that influence the duration of the market research are: the number of consultants implementing the project, the amount of information to be obtained, data availability and the selected analysis method.
Recognition of the market is not the duty of every entrepreneur, but it is undoubtedly worth doing - especially today, in the era of enormous competition, which may effectively hinder the construction of a satisfactory recognition. Detailed market research is now the basis of a successful business. The data obtained from the study will allow you to prepare an action plan that will improve the functioning of the company and facilitate its way to the top.