Companies need information about the market and surrounding business environment in order to maintain success. Various methods of market analysis are available so companies can gather the requisite information for external factors. Common market analysis options include surveys, focus groups, observation, field trials, or other methods. Regardless of the approach used, the methods of market analysis should provide valuable information the company did not have before. The gathered data should also allow a company to improve operations and be stronger than competitors.
Surveys are among the most common market analysis tools. Companies can send out mailers and e-mails or use telephone surveys to gather consumer data. The information from the survey typically provides information on the desires, perceptions, and wants of consumers. New products, product quality, or product lines are often the result of this information. These surveys may also reveal information on other products purchased.
Focus groups are a bit more personal when compared to standard surveys. Companies often select a few individuals to come in and discuss or test a new product. The information here allows a company to review consumer feedback and ask the focus group participants questions. Though focus groups are a bit more expensive than surveys, these methods of market analysis can glean more information. A drawback to focus groups can be the internal bias in any individual in the group.
Observation may be among the easiest methods of market analysis. Essentially, internal stakeholders simply look around the market and business environment at what other companies are doing. A review of competitors and other successful products can help a company determine the future of the market. A flaw in this method is the inability to apply quantitative analysis to the analysis process. Observation may also not determine the internal profits a competitor earns from its products.
Field trials typically represent one of the most expensive methods of market analysis available to the company. The business can create a small group of products and test them in select markets around the larger region. Information from each test market allows a company to assess how general consumers react along with any associated marketing or other programs attached to the product. If successful, the market analysis can help a company complete a rollout in a nationwide sense. As the company already has a partial system in place for distributing goods, a complete rollout is typically easier to process after a field trial.