Conducting a Market or Segment Analysis

 

The purpose of conducting a market analysis is to understand the market your business will operate in. Understanding the demands, gaps and competitors efforts within the market will help position your company for success.

What is a market? A market is any place where buyers and sellers meet to trade or consume products or services. Any business in a marketplace is likely to be in competition with other firms offering similar products. For example, banking.

What is a segment? A segment is a group of people who share one or more common characteristics, lumped together for marketing purposes. For example, using banking as a market, it could include retirement planning, mortgage loans, commercial loans and credit cards.

What is a demand? A demand is anything the consumer seeks in a given market. For example, “digital, on-demand access to banking information.”

What is a gap? A gap is an unmet demand for which no solution exists. For example, 100% online mortgage loans.

What is a response? The products or services businesses offer to fulfill a demand or gap. For example, digital forms that can be populated and printed prior to signing for a mortgage loan.

The process of conducting a market (or segment) analysis can be time consuming. It requires the business to accumulate as much consumer, competitor, tacit, intellectual and expert data as possible and then to methodically organize and collate that data into information.

STEP 1: Research both historical (last 4-5 years), current and predicted (3-5 year outlook) information about your market. You’ll need to find 4-5 sold resources. Some great places to learn about your market or segment include:

• U.S Census Tools
  • Identify the NAICS codes you and your competitors use and research any government census data that may give you visibility into trends
• Google specific search phrases to accumulate broad trends: [market/segment title] “trends”, “market size”, “business growth”
  • E.g, “consumer loan market size”
• Search data aggregators such as statista.com
  • Pew Research Center
  • Alex Market Research
• Social Mention to see what keywords are trending
• Lookup your top competitors and see what they’re doing and any press releases they may have issued
• Research Google Finance and other business reporting sites especially for publically traded companies
• Research / contact vendors who support your market or segment. What are they saying/seeing in the industry?

STEP 2: Organize your research into demands, gaps and competitive responses.

STEP 3: Collate & Develop Themes

• What are you seeing frequently in the research?
• Are you seeing a trend toward specific consumers?
• Where are your competitors researching or investing in?

STEP 4: Capture demands, gaps and responses by identifying specifics that relate to your business.

STEP 5: Time-bound the demands, gaps and responses

• Demands: when you believed consumers sought the capabilities (service, product -& 3 years is adequate). How long do you expect the demand to continue (3-4 years is adequate).
  • For example: “Approximately when did demand for online banking begin and how long do you expect it to continue?” Thus, the start for online banking would be 1/1/1995 and is expected to continue through 2025.
• Gaps: when did the market/segment fail to satisfy the demand? How long do you believe the gap will exist before the market/segment can fulfill the need?
  • For example: “Approximately when did the demand to transfer funds from person-to-person without the need for paper checks or cash start and when was it resolved?”
• Response: what and when did the market attempt to satisfy the demand and need?
  • For example: “Approximately when did banks implement text-based fund transfers?”

STEP 6: Enter the information into Strategile and relate each demand, gap and segment to each other where applicable. The purpose is to relate them with each other to ensure demands, gaps and responses have been covered in this and future steps.