How to Perform Marketing Analysis | 7 Dimensions for Every Market

Summary

In this tutorial, Dr. Fred Oberland explains how to conduct an effective marketing analysis for your business. He outlines seven key dimensions: understanding the market size, growth rates, trends, profitability, key success factors, distribution channels, and industry cost structure. These factors help businesses formulate successful strategies and make informed decisions about pricing, competition, investment, and resource allocation. The video encourages viewers to subscribe for more insights and provides valuable information on how to analyze and navigate the complexities of the market.

Takeaways

• 😀 Marketing analysis helps you understand market dynamics and is essential for creating a successful business strategy.
• 😀 Understanding the market size is crucial—larger markets have more competitors, making it necessary to differentiate your product.
• 😀 Pricing strategy must be balanced—too high risks losing customers, and too low can devalue your product.
• 😀 Growth potential of a market should be assessed to determine if it's worth investing in or if you should reconsider your strategy.
• 😀 Stay updated on market trends to know what products or services to offer, but be aware trends can change quickly.
• 😀 Profitability analysis is key—if the market is not profitable, investing in it could be a waste of resources.
• 😀 Key success factors such as technology, economies of scale, and resource utilization play a big role in standing out in the market.
• 😀 Effective distribution channels are critical for delivering your product to customers; assess whether existing ones are sufficient.
• 😀 Industry cost structure impacts profitability—identify ways to reduce costs without increasing prices to maintain competitive advantage.
• 😀 Conducting a thorough marketing analysis using these seven dimensions will help you formulate effective strategies for your business.

Q & A

What is the purpose of conducting a marketing analysis for a business?

The purpose of a marketing analysis is to understand the dynamics of the market in which your business operates. It helps in formulating strategies to run your business successfully by analyzing various market factors such as size, growth, trends, profitability, and more.

Why is understanding the market size important in marketing analysis?

Market size is important because it indicates the level of competition and helps in setting the right pricing strategy. A larger market means more competitors, so your products need to stand out, while a smaller market may allow for higher prices but fewer customers.

How does market growth influence investment decisions?

Market growth directly impacts investment decisions. If a market is expected to grow, it presents a good opportunity for investment. However, if a market is stagnating or declining, investing might not be wise, as it could limit potential returns.

What role do market trends play in marketing analysis?

Market trends help businesses understand consumer preferences and predict future demand. By identifying current and emerging trends, businesses can adjust their product offerings, pricing, and marketing strategies to capitalize on opportunities or mitigate risks.

How can market profitability affect business decisions?

Market profitability is crucial for determining whether a business venture is financially viable. If a market is profitable, it encourages investment. However, if profitability is low, the business may struggle to generate returns, making it less attractive for investment.

What are key success factors in an industry, and why are they important?

Key success factors are elements such as technology, processes, economies of scale, and resource utilization that are essential for business success. Identifying these factors helps businesses compete effectively and differentiate themselves from competitors.

Why is understanding distribution channels critical for a business?

Distribution channels are the means through which products reach customers. Effective distribution is key to ensuring that products are available to the target market. A poor distribution strategy can lead to inefficiencies and lost sales, so it's important to assess and optimize these channels.

What is the significance of analyzing the industry cost structure in marketing analysis?

Analyzing the industry cost structure helps businesses understand the expenses involved in producing and selling products. This knowledge allows companies to find ways to reduce costs, improve efficiency, and increase profitability without raising prices.

How can changes in market trends be both an opportunity and a threat for businesses?

Changes in market trends can present opportunities if businesses can adapt quickly and align their products with new consumer demands. However, they can also pose a threat if businesses fail to respond, causing them to lose relevance in the market.

What is the relationship between market size and pricing strategy?

Market size influences pricing strategy. In larger markets with more competitors, businesses need to carefully set their prices to remain competitive. In smaller markets, there may be more flexibility in pricing, but businesses should still consider customer perception of value.