Whenever you are eager to enter a new market, you will require doing thorough market analysis. Not only that, whenever you’d like to introduce a new product in the market, you will have to deal with market analysis. It will help you to define the current situation of the market. Further to market analysis, industry analysis and also SWOT analysis can disclose your true position in the complete industry. You’ll learn what decisions you can take regarding entering with your business model. That’s the starting process to determine markets attractiveness and to determine the strategies which can be used in the market.
There are various factors you definitely require to analyze in order to complete your market analysis. Let’s cycle through these factors now:
Market size: Before you enter the market, you require learning the actual market size. Well, market size is crucial whether you’re going for a niche marketing strategy or a mass marketing strategy. Furthermore, it’s also the first step in market analysis. It’s because if the market size isn’t up to mark, then it makes no sense to enter the market.
Growth rate: It’s apparent that the growth rate of different markets is different. As you might have already guessed, the growth rate of Great Britain, USA, South Africa and India, are all different. Therefore, when doing a geographical market analysis, you’ll rate USA market above South Africa. As you see, growth rate needs to be taken into consideration when conducting your market analysis.
Profitability: Profitability actually depends on such crucial things as competition, brand equity and so on. Of course, you wonder what your profitability could be when you enter the market and how you could increase or maintain the overall profitability of your company once you enter the market. All these questions closely connected with profitability are answered by the market analysis.
Cost structure: We can explain the whole importance of cost structure via an example of Walmart. For any retailer to take on the likes of Walmart, decent costs control will be required. Moreover, the retailer won’t survive. Therefore, before entering the market, you require analyzing the cost structure and whether it’s going to be possible for you to survive in the tough market. Apart from that, the cost structure helps to determine the profitability.
Distribution channels: The key problems present in African countries such as Nigeria and Ghana is lack of distribution channels. A great number of companies are ready to invest, although there’s no distribution channel because of rampant thievery as well as bad business environment. So, before you enter the market, you require defining a distributors profile as well as the ideal distribution network.
Whenever you are eager to enter a new market, you will require doing thorough market analysis. Not only that, whenever you’d like to introduce a new product in the market, you will have to deal with market analysis. It will help you to define the current situation of the market.