Identifying market opportunities is critical to the development and survival of an enterprise.
When identifying new market opportunities, managers need to examine a variety of factors involved in entering or not entering a market including the market's structural barriers to entry and the competition.
A good market analysis should include:
Information on industry strengths
Assessment of major competitors and their strategies
Review of channels of distribution
Wide variety of data on current and potential customers.
Most market analysis begin with a broad study of the overall industry and conclude with a narrow definition of the company's target market.
Philip Kotler in his book "Marketing Management: Analysis, Planning and Control" states the following as the essence of strategic marketing planning: 1.Analysing market opportunities from the explicit and implicit data surrounding us. 2.Developing market strategies in which strategic options are based upon organization's objective, strengths and weaknesses. 3.Shaping the market offering so that the chosen strategy is translated into a complete offering to the targeted customers. 4.Managing and delivering marketing programmes in which the product is delivered to the market place.
Once the opportunity is identified the market analysis should demonstrate why the target market chosen is more favourable than other segments since the company will be investing its limited resources in marketing to that target market.
Market analysis can be broken down into these steps.
1.Establish demand type
2.Assess correct size of the market
3.Analyse the growth rate of the market
4.Establish whether the buyer trends are favourable