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Market analysis: How to research and your market

journal-sm-marketWhat separates good product plans, product ideas and business cases from ones that are doomed to failure?

Often the difference can be traced back to whether they were based on solid groundwork – researching the market, analysing the options and making the right decisions. This article looks at the overall market analysis process and where we fit as product managers and product marketers.

Industry comment

“Companies must be market led. Often that means freeing product managers from operational responsibilities so they can spend time engaging with market touchpoints: customers, competitors and understanding market trends.”

Mike Beech: Head of Product Marketing, RM

The scope of Market Analysis

Market Analysis is a broad topic that includes the worlds of market research and strategic analysis. The diagram below shows the 5 areas that need to be considered.

market_analysis_landscape

Understanding our competitors, markets and how customers perceive our products is fundamental to market analysis. Other factors may only impact us from time to time but can still turn the market upside down, e.g. the introduction of new technologies like tablet computers or macro market changes such as the current economic recession.

When starting any market research you will need to judge the focus you give to each of these areas according to the challenges you face with your product.

Strategic market analysis

Strategic market analysis looks at the big picture for a company and its markets. It’s an ongoing process of monitoring business unit success, reviewing product portfolios, identifying major new opportunities and deciding where to invest resources. It drives new product innovation, take-over and company strategy. Although we are impacted by the outcome we’re not often involved in the activity.

Industry comment

“When analysing your market it’s just as important to be clear on who you’re not selling to. Companies can be dazzled by sales opportunities in non-core areas and end up wasting precious resources that are needed to get traction in their key markets.”

Martin Saunders, Product Director, Claranet

Market Analysis triggers

The reality for many of us is that market analysis work gets triggered by some request.

market_analysis_process

These are specific questions that we or others have about our product and the market. For example, we’re developing a business case and need to get some data on market sizing and competitor pricing to validate our forecasts and assumptions.

However we should really see these ad-hoc requests as part of an ongoing process of market research, analysis and proposition development that helps develop our product strategy.

Building a product strategy

Product strategy is about working out what the right product is for the business. Market analysis is a critical component. It includes segmenting the market, deciding which customers to target and providing the input needed to develop product propositions. It is important to think of this as an ongoing cycle of activity. As markets change and new competitors emerge we need to evolve our product strategy.

market_analysis_cycle

What it means to us

In our roles as product managers and product marketers we should either own or contribute to this work of research, analysis and proposition development.

But it’s not easy. Our research options are always limited by time and budget and most of the decisions we make depend on an incomplete understand of an evolving market. It can be tough to find the insights we need at the point we need them. That’s why it’s good to set up a way of drip-feeding market information into the business.

Wise Words

“If Unilever only knew what it knows, it would double its profits.”

Former CEO, Unilever

Conclusion

When you’re busy there’s always a temptation to make decisions based on ‘gut feel’ but put the effort into market analysis and you’ll improve your decision making, have more successful products and be able to defend your decisions!

 

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