market study

Y-Negocios

2022

We explain what a market study is, what this review is for and the types that there are. Also, the steps you use and examples.

A market study determines whether or not an economic activity is profitable.

What is market research?

A market study is a review made by companies in a niche market, to determine how viable it is and how convenient, therefore, it would be to invest their money in developing it.

In short, it is a preliminary exploration that the Business to determine whether or not a given economic activity is profitable or sustainable enough in the weather to be convenient for you.

This type of studies involves both the productive sector and the service sector, and provides companies with all the information possible on patterns consumption of a specific niche in a specific geographic and social location. Market studies are not universal but particular and have a specific validity.

That is why market studies are usually done twice a year (semi-annually), to monitor how current markets move and what possible markets are born, in order to foresee opportunities and, also, risks to come and get more out of your assets.

In this sense, these analysis tend to be interdisciplinary, involving specialists from applied economics, philosophy, the statistics, the communication, the management and management, among other specific areas.

What is a market study for?

This type of review has the task of informing companies as much as possible about the behavior of their markets of interest, that is, their eventual or current consumers, to help them define their strategy business.

If a market study shows scenarios of much gain and growth in a new area, the company can invest money in that market niche; if instead it throws data dangerous, the company will act more cautiously. Market studies are key in the decision making.

Types of market research

A casual study explores the relationships between the sale and its possible objective causes.

There are three basic types of market research:

  • Exploratory. Collect initial information on a specific market situation, based on secondary sources such as magazines, publications, or interviews with experts.
  • Descriptive. Undertake market segmentation through processes of identification and quantification of consumption, that is, it makes a reading of the current state of the matter and expresses it in economic and business indicators.
  • Casual. It seeks to establish causal relationships, that is, of cause and effect, in the phenomena observed in a market. Above all, it explores the relationships between the sale and its possible objective causes.

Steps of a market study

Information needs to be processed to move towards concrete conclusions.

Roughly speaking, the steps to do a market study would have to involve the following:

  • Collect information. This implies going to different sources (digital, written, face-to-face) both in public and specialized media, always starting from the information that the company already has on the subject.
  • Observe the demand. This means measuring what is happening in the market, to get an idea of ​​the state of matter. Surveys, visits to the competition and real contact with the customers is key at this stage.
  • Analysis of the offer. Once you understand the behavior of the market, or its main trends, it is convenient to take a look at the competition to see what they are doing well and what they are doing wrong, where they are right and where they are wrong, and what their weaknesses are.
  • Define the objective. From all of the above, the objective of the study and break down the information based on the possible conclusions that can be obtained from it. That is to say: process the information taking into account what it is that we are asked to understand, in order to move towards specific conclusions.
  • Preparation of a final report. Finally, the whole process will be presented, emphasizing the analysis and the conclusions, to the client. This report may include a SWOT analysis or the four “Ps”, or any other convenient method.

Market study example

A quick example of a market study can be, in the case of a toy store:

  • Review the documentation on toy stores, the toy sector and the children's public, both in specialized books and in reports and other informative material.
  • Attend the toy store and conduct opinion surveys, surveys and a study of the number of buyers vs. number of visitors, to know how many customers who enter the store really buy, and why.
  • Repeat a similar study in two nearby competing toy stores, if possible. Check your promotional strategies with those of the toy store analyzed, detailing, for example, promotional days, sales seasons, etc.
  • Process the information collected to reach conclusions significant. For example: your competition attracts twice as many customers to your store, which is brighter and has a window up to date with the characters of the moment. However, it sells a similar number to what the others sell.
  • Offer conclusions based on the analysis: the advantage of the competition is the appearance, but it does not sell more due to its high prices. An investment in decoration could attract much more public and be paid for not with price increases but with sales volume.
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