Companies need information about the market and the surrounding business environment to maintain success. Various methods of market analysis are available so that companies can gather the necessary information for external factors. Common market analysis options include surveys, focus groups, observations, field trials, or other methods. Regardless of the approach used, market analysis methods should provide valuable information that the company did not previously have. The data collected should also enable a company to improve operations and be stronger than competitors.
Surveys are among the most common market analysis tools.
Businesses can send mailers and emails or use telephone surveys to collect consumer data. Survey information typically provides information about consumers’ wishes, perceptions, and desires. New products, product quality or product lines are often the result of this information. These surveys can also reveal information about other purchased products.
Focus groups are a little more personal than standard surveys. Companies often select a few people to come in and discuss or test a new product. The information here allows a company to review consumer feedback and ask questions of focus group participants. While focus groups are a little more expensive than surveys, these market analysis methods can gather more information. A disadvantage for focus groups can be internal distortion in any individual in the group.
Observation can be among the simplest methods of market analysis. In essence, internal stakeholders are limited to looking at the market and business environment what other companies are doing. A review of competitors and other successful products can help a company determine the future of the market. A flaw of this method is the inability to apply quantitative analysis to the analysis process. The observation may not even determine the internal profits a competitor earns from its products.
Field trials are typically one of the most expensive methods of market analysis available to the company. The company can create a small group of products and test them in select markets in the larger region. Information from each test market allows a company to assess how general consumers react along with any associated marketing or other associated programs with the product. If successful, market analysis can help a company complete a nationwide implementation. Since the company already has a partial system for distributing goods, a full launch is typically easier to process after a field trial.