MARKET

ANALYSIS
Lesson 5
MARKET ANALYSIS
 IS A DETAILED ASSESSMENT OF YOUR BUSINESS’
TARGET MARKET AND THE COMPETITIVE
LANDSCAPE WITHIN A SPECIFIC INDUSTRY.
 THIS ANALYSIS LETS YOU PROJECT THE SUCCESS
YOU CAN EXPECT WHEN YOU INTRODUCE YOUR
BRAND AND ITS PRODUCTS TO CONSUMERS WITHIN
THE MARKET.
What is an Industry Overview?
■ An industry overview is a document providing some basic information about an
industry of interest. People use overviews in research when they are making decisions
about investments, entering industries, and other activities. A number of publications
produce industry overviews for their readers,.
■ An industry – or sector – is the whole of all economic activities by companies, people,
and organizations involved in the production of goods and services for a particular field.
■ Industries are usually categorized by the goods and services they produce.
Example,
The pizza industry is made up of all producers who produce and
sell pizza in the market. It is important to note that for a pizza
maker to belong to the pizza industry, he or she must sell the
product they make in the market. A person cooking pizza at home
for their children would not fit under this description as they are
not selling any products or services.
Target Market
■ Market Targeting is a sage in market identification process that aims to determine the
buyers with common needs and characteristics. Prospect customers are a market
segment that an entrepreneurial venture intends to serve.
■ In targeting a specific market, it will exclude people if it will not fit your criteria.
Rather, target marketing allows you to focus your marketing money and brand message
on a specific market that is more likely to buy from you than other markets.
■ Choose a product that is more affordable, efficient, and effective to reach potential
clients and generate business.
Commonly used methods for segmenting
the markets are follows.:
1. Geographic segmentation – the total market is divided according to geographical
location. Variables to consider
a. Climate b. Dominant ethnic group c. Culture d. Density (either rural or urban)
2. Demographic Segmentation – divided based on consumers Variables to consider
a. Gender
b. Age
c. Income
d. Occupation
e. Education
f. Religion
g. Ethnic group
h. Family size
 Use these general terms as linchpins/word) in research data for the market analysis
section of your business plan, and to identify your target market
Gender Are you targeting men, women, or both sexes?
Age What age range are you catering products/services to?
Kids? Adults? Seniors? Gen X? Millennials?

Marital status Are your target customers married or single, or

divorced?

Family What is their family structure (number of children,

extended family, etc.)?

Location Where do they live? Are you selling locally? Regionally,

nationally, or internationally?

Education How much education do they have?

Income What is their income?
Occupation What do they do for a living?
Religion Are they members of a particular religious group?
Language Are they members of a particular language group?
Lifestyle What is their lifestyle like?
Commonly used methods for segmenting
the markets are follows.:
4. Behavioral Segmentation – divided according to customers’ behavior pattern as
they interact with a company. Variables to consider
a. Perceptions
b. Knowledge
c. Reaction
d. Benefits
e. Loyalty
f. Responses
Commonly used methods for segmenting
the markets are follows.:
3. Psychological Segmentation – divided in terms of how customers think and
Believe Variables to consider
a. Needs and wants
b. Attitudes
c. Social class
d. Personality traits
e. Knowledge and awareness
f. Brand concept
g. Lifestyle
■ But don't stop here. To succinctly define your target market, poll or
survey members of your prospective clients or customers to ask
specific questions directly related to your products or services.
■ For instance, if you plan to sell computer-related services, ask
questions relating to the number of computing devices your
prospective customers own and how often they require servicing.
■ If you plan on selling garden furniture and accessories, ask what
kinds of garden furniture or accessories your potential customers
have bought in the past, how often, and what they expect to buy
within the next one, three, and five years.
■ Answers to these and other questions related to your market are to
help you understand your market potential.
What is a competitor analysis?
■ A competitor analysis, also called competitive analysis and
competition analysis, is the process of examining similar
brands in your industry to gain insight into their offerings,
branding, sales, and marketing approaches. Knowing your
competitors in business analysis is important if you’re a
business owner, marketer, start-up founder, or product
developer.
■ A competitive analysis is the process of gathering information
about your competitors and using it to identify their strengths
and weaknesses. This information can then be used to develop
strategies to improve your own business and gain a
competitive advantage.
Benefits of conducting competitor analysis
A competitor analysis offers several benefits, including:
• Understanding industry standards so that you can meet and exceed
them
• Discovering untapped niche markets
• Differentiating products and services
• Fulfilling customers’ desires and solving their problems better than
competitors
• Distinguishing your brand
• Standing out in your marketing
• Measuring your growth
How to do a competitor analysis
■ The sections below provide a competitor analysis framework for evaluating your
industry’s competitive landscape. Return to this framework regularly and apply the
insights to develop your business.
1. Find out who your competitors are.
2. Analyze your competitors and their business structures.
3. Evaluate your competitors and their value propositions.
4. Evaluate your competitors’ marketing efforts.
5. Audit your competitors’ brand identities.
6. Follow each competitor’s customer journey.
7. Examine audience engagement.
8. Conduct a SWOT analysis of your competition.
Competitor analysis key takeaways
■ Competitor analysis key takeaways
■ Remember that conducting a competitor analysis is a crucial
step in developing your business. It can help you
differentiate your brand and present your products and
services as the best on the market. Return to your competitor
analysis efforts regularly, such as every quarter, six months,
or year, to account for shifts in competitors’ tactics and new
competitors that arrive on the scene. Always look for ways to
give your brand and products a competitive edge.
How to write your competitive analysis

■ Once you’ve done your research, it’s time to present your findings in your business
plan. Here are the steps you need to take:
1. Determine who your audience is
2. Describe your competitive position
3. Visualize your competitive position
4. Explain your strategies for gaining a competitive edge
1. Determine who your audience is

■ Who you are writing a business plan for (investors, partners,

employees, etc.) may require you to format your competitive analysis
differently.
■ For an internal business plan you’ll use with your team, the competition
section should help them better understand the competition. You and
your team will use it to look at comparative strengths and weaknesses to
help you develop strategies to gain a competitive advantage.

■ For fundraising, your plan will be shared with potential investors or as

part of a bank loan. In this case, you’re describing the competition to
reassure your target reader. You are showing awareness and a firm
understanding of the competition, and are positioned to take advantage
of opportunities while avoiding the pitfalls.
2. Describe your competitive position

 You need to know how your business stacks up, based on the values it offers to your
chosen target market. To run this comparison, you’ll be using the same criteria from the
competitive framework you completed earlier. You need to identify your competitive
advantages and weaknesses, and any areas where you can improve.
 The goal is positioning (setting your business up against the background of other
offerings), and making that position clear to the target market. Here are a few questions
to ask yourself in order to define your competitive position:
■ How are you going to take advantage of your distinctive differences, in your customers’
eyes?
■ What are you doing better?
■ How do you work toward strengths and away from weaknesses?
■ What do you want the world to think and say about you and how you compare to
others?
3. Visualize your competitive position
■ There are a few different ways to present your competitive framework in your business
plan. The first is a “positioning map” and the second is a “competitive matrix”. Depending
on your needs, you can use one or both of these to communicate the information that you
gathered during your competitive analysis:
■ Positioning map
■ The positioning map plots two product or business benefits across a horizontal and vertical
axis. The furthest points of each represent opposite extremes (Hot and cold for example)
that intersect in the middle. With this simple chart, you can drop your own business and the
competition into the zone that best represents the combination of both factors.
■ I often refer to marketing expert Philip Kohler’s simple strategic positioning map of
breakfast, shown here. You can easily draw your own map with any two factors of
competition to see how a market stacks up.
■ It’s quite common to see the price on one axis and some important
qualitative factor on the other, with the assumption that there should be a
rough relationship between price and quality.

■ Competitive matrix
■ It’s pretty common for most business plans to also include a competitive
matrix. It shows how different competitors stack up according to the
factors identified in your competitive framework.
■ How do you stack up against the others? Here’s what a typical
competitive matrix looks like:
 4. Explain your strategies for gaining a
competitive edge
■ our business plan should also explain the strategies your business will use to
capitalize on the opportunities you’ve identified while mitigating any threats
from competition. This may involve improving your product/service offerings,
targeting underserved market segments, offering more attractive price points,
focusing on better customer service, or developing innovative marketing
strategies.
■ While you should cover these strategies in the competition section, this
information should be expanded on further in other areas of your business plan.
For example, based on your competitive analysis you show that most competitors
have the same feature set. As part of your strategy, you see a few obvious ways to
better serve your target market with additional product features. This information
should be referenced within your products and services section to back up your problem and
solution statement.
THANK YOU
Prepared: Ms Eroma