Market analysis is the first step you must undertake before you start creating and promoting your product to potential customers. It’s no surprise that the success or failure of your product depends on how well you implement this analysis.
This step is a highly calculated estimate. This is because business-related strategies and decisions are determined based on this analysis.
Including the number of products made, estimated target market, capital, profits, and product distribution locations.
So, What Is Market Analysis?
So, market analysis or another term market analysis is a series of processes carried out to identify and assess the market qualitatively and objectively to ensure its alignment with your business.
The goal is to assess current market developments and identify potential new markets. Market analysis is essential, especially when developing business plans, promoting products, or expanding your network.
When connected to the competitive aspect, companies will usually conduct a SWOT analysis and analyze their business model to determine the brand position and make policies.
However, it’s important to note that market analysis is not the same as market research. The two are differentiated by their focus.
Market analysis focuses on gathering information related to new markets, while market research focuses on gathering information that can become business solutions.
The Importance of Understanding Market Analysis for MSME Entrepreneurs
It could be argued that market analysis is crucial, especially for businesses whose profits or decision-making are related to marketing concepts. A thorough understanding of the market is essential to make efficient decisions.
In addition, here are several reasons why market analysis is very important for MSME entrepreneurs:
- Checking the market structure, especially determining the products that can be made to meet important demands while analyzing consumer capabilities in purchasing products to be able to determine prices.
- Establish appropriate market boundaries, especially those of competitors. For example, brands or businesses that produce products targeting the same market.
- Conducting an analysis of who, why, and how consumers purchase products on the market is one component of market demand analysis.
- As an analysis of brand demand, namely understanding how customers choose one brand over another.
- Recognizing market and industry potential through business research.
How to Conduct Market Analysis
In order to conduct market analysis properly, here are several ways you can do it:
1. Apply the request approach steps
The demand approach is a potentially effective way to identify the conditions and potential of a specific target market. This approach focuses primarily on human needs that are still unmet, or that have been met but not optimally.
2. Pendekatan penawaran
Next, use a supply-side approach. This method is based on the producer’s capability to produce products and provide services, whether in the form of goods or services. Based on this, entrepreneurs can begin to identify potential target markets.
However, ensure you always understand the needs of your target market. Before starting a business, you need to determine whether potential customers have the purchasing power to justify your price.
3. Observing the needs of potential customers
Before producing a product, you need to understand your potential customers’ most crucial needs. A simple example would be the need for daily necessities or basic necessities.
Additionally, you should also be aware of seasonal needs, such as goat during Eid al-Adha or chicken and beef during Eid al-Fitr.
4. Choose the right time
Timing also influences the success of market analysis. If you offer a product at the wrong time, it’s possible that potential customers won’t be interested, leading to losses.
This is the reason why you should look for what customers always need and when is the right time to sell it.
5. Create products that suit the customer’s profession
In relation to this step, you need to start by identifying the professions of the majority of your target market. This way, you can offer products that meet their needs and generate significant profits.
For example, if you’re opening a shop in an area where farmers are the primary profession, you could sell agricultural products or equipment. Or, if you’re looking to start a business in a water area, a fishing equipment and supplies store could be a great source of inspiration.
6. Conduct a market survey
Before starting to offer products in large quantities, entrepreneurs generally begin with a market survey. This step aims to understand market conditions and is another fairly effective method of market analysis.
You can conduct a market survey using a questionnaire or short interviews with potential customers. Based on the survey results, you can pinpoint market needs. The more comprehensive the survey, the more accurate the results will be.
7. Observe market developments
In addition to surveys, market analysis can also be conducted by examining current market developments and trends. You should perform this step while analyzing existing products for comparison.
Don’t forget, you need a thorough assessment of the product you want to create. This will help you more easily predict potential failures and losses when you finally sell it.
8. Market testing
Before releasing a product in large quantities, it’s a good idea to test the market in several locations. Through testing, you’ll learn how the market responds to your product. To do this, leave the product in stores or give it away for free. Ask customers for reviews or suggestions for consideration.
Don’t forget to also study competitors’ products in your area. You can innovate or add aspects to your product that your competitors don’t have, thereby increasing its selling point.
Besides conducting market analysis, businesses also need to manage transactions and finances. The Labamu app offers a practical solution that offers this convenience through its available features.
Through Labamu, you can manage your raw material inventory and track billing status more easily. Furthermore, the POS Cashier feature helps maximize transactions with a wide selection of payment methods.
Plus, the Reports feature makes it easier to record all your transactions. Visit Labamu page for more complete information!
