Strategic analysis of the market

A market analysis will consist of a range of factors relevant to the particular situation under review, but this range typically includes the following areas:

Actual and Potential Market Size: Estimates of total market sales allow an organization to evaluate the realism of specific market share goals. Identifying the major sub-markets and potential growth areas of this market is important for developing a marketing strategy, as is establishing whether any areas are declining.

Trends: Analyzing general trends in the market identifies changes that have actually occurred. This can help to trace the causes of these changes and reveal the critical drivers in the market.

Customer: The analysis requires identifying who the customer is and what criteria they use to judge product offerings. Information on where, when, and how customers purchase a product or service allows an organization to begin to understand customer needs. Identifying changing trends in consumer behavior can indicate potential market developments and opportunities.

Customer Segments: Identifying current market segments and establishing the benefits each segment requires allows an organization to find out if it has the ability to meet specific customer needs.

Channels of Distribution: Identifying changes in the importance of channels of distribution based on growth, cost, or effectiveness allows a company to evaluate its current arrangements. Establishing key decision makers within the distribution channel also helps inform strategic decisions.