market analysis

Market Analysis

Marketing Assignment Course

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Market analysis is used to determine the attractiveness of a market and to understand its evolving opportunities and threats as they relate to the strengths and weaknesses of the firm.

Market Analysis


The factors that are needed to be considered while analyzing a market are:

Market size (present and future)Market growth rateMarket profitabilityIndustry cost structureDistribution channelsMarket trendsKey success factors

Market Analysis


Market sizeThe size of the market can be evaluated

based on present sales and year by year data can be used to predict the future sales.

The data can be obtained from the following sources: trade union associations, consumer surveys and government data.

Market Analysis


Market Growth RateThe Growth rate of a market can be

calculated by estimating the future sales. For this purpose the sales of previous

years can be taken and a trend analysis can be prepared to forecast the future sales, in this way the percentage growth of the market can be calculated.

It gives the company a picture about how to prepare for future sales.

Market Analysis


Market ProfitabilityProfitability is an important factor which

needs to be considered in a line of business. Any company likes to invest in a business which yields good profits.

They don’t invest in a loss-yielding industry.

For ex: with iPods and personal music players coming up no company wants to invest produce tape cassettes or Phonogram records, because those products are outdated and people don’t want them.

Market Analysis


Market Profitability (Contd)Yes, of course Phonograms and records are

for vintage collectors. But, companies do no produce them for

the sake of collectors. Moreover the percentage of collectors is

not more than 1 or 2 percent of the whole market.

Market Analysis


Industry cost structureCost of the industry is also a important

factor to be considered. If the initial cost of setting up the

industry is exorbitantly high many small and mid-sized companies cannot enter that industry.

Ex: There are not many companies which produce commercial flights. Only Boeing and Airbus are the companies which successfully produce commercial flights.

Market Analysis


Distribution channelsDistribution channels are the media

through which the company supplies its goods to the final consumers. These mainly include the Dealers—Wholesalers--Retailers. Any company which produces goods that are consumed common public has to go through the above mentioned channels and finally reach the consumers. This increases the selling costs and increases the selling price of the product.

Market Analysis


Distribution Channels (Contd)Due to the lobbying of dealers some

companies have chosen not to take the dealer, wholesaler route but instead choose the direct road to consumers.

That is direct selling. Amway, Tupperware are two such companies which pioneered in the field of direct selling.

Market Analysis


Market trendsA company which correctly reads the market

trends and responds and gets ready with the products for the future is a good pioneer in the industry.

Nokia is one such pioneer as, the company introduced models which the consumers couldn’t even think that such innovations could be put into a mobile and were available for a comparatively lesser cost.

Market Analysis


Key success factorsCompanies have to take a deeper look

internally about the best feature in their product and identify a USP (Unique Selling Point).

They need to develop in such a way that even without a unique product they can survive in the market. Not just survival but also reap profits from it.

Market Analysis


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