Market analysis is a detailed assessment conducted by Product Managers to gather useful insights about customer preferences and market drivers. Your business plan’s market analysis segment offers proof that there is a market niche your product/service can take advantage of. This research also offers the framework for your marketing and sales strategy.
According to the 2022 State of Product Management Report, the product team (50%), executive leadership (31%), and the marketing and sales team (12% each) are the decision-makers in terms of when a product is announced or launched. Therefore, there’s a strong need for market analysis by project managers. Now, you can easily predict an answer to the question, “How important is market analysis for Product Managers?” Let’s understand it in detail.
Market analysis is a comprehensive study of a market in a certain sector. It includes potential clients and their purchasing patterns, rivals, as well as their strengths and shortcomings. Product managers use marketing analytics to decrease company risks, efficiently connect with their target audience, deliver suitable products, and stay on top of market dynamics.
For example, Sarah gave her handcrafted bags to friends and family to obtain comments before deciding whether to sell them. They responded well, but she decided to conduct a bit more study.
She surveyed her social media channels to see how many people preferred handcrafted bags. She studied reviews for similar things on e-commerce websites at the same time. It assisted her in understanding what clients wished.
Following her market analysis, she discovered that customers appear to be content with handcrafted soaps, but only if the packaging is eco-friendly. Thus, Sarah chose to concentrate on packaging design while keeping market viability and customer behavior in mind.
In this article, you’ll understand “what market research is, why a market analysis is essential for the business, and how the Product Manager unveils to conduct a marketing analysis.
Whether a business or a Product Manager wishes to know the purchase behavior of customers or what competitors are offering at what price, market research helps in drawing noteworthy findings.
Depending on the processes and tools required, the following are the different types of market analysis:
1. Brand Research
Brand research assists in creating and managing a company’s brand or identity. The visuals, storylines, and traits people identify a company with form its brand.
Brand research can be applied at any point in a company’s lifespan, from conception through new product releases and re-branding. There are at least seven different kinds of brand research:
2. Competitive Analysis
Competitive analysis helps you to examine the competitor’s strengths and weaknesses in the market, giving the capability to create a competitive edge.
No firm survives in isolation—competitive analysis is essential to any business and market strategy. A competition study will be essential whether you are just getting started, entering a new market, or doing a health check on the brand.
3. Consumer Insights
Consumer insights research indicates more than just who the buyers are and what they do. It explains why customers act the way they do and how you can use that to fulfill the business objectives.
Knowing your clients is essential for developing a comprehensive marketing approach. This form of market analysis can assist the Product Manager in anticipating customer demands, sparking innovation, customizing your marketing, resolving company constraints, and much more.
4. Customer Satisfaction Research
Customer satisfaction research is a kind of market research that examines how buyers’ experiences with goods or services meet, outperform, or fall short of their expectations.
Customer retention and overall business performance are strongly influenced by customer happiness. Customer satisfaction research should assist you in learning what your consumers appreciate, hate, and think should be improved. This kind of market research can be used to examine product design and quality, delivery time and efficiency; personnel and service dependability, competence, and politeness; market pricing; and price effectiveness.
5. Customer Segmentation Research
Customer segmentation studies seek to separate markets or users into smaller groups or profiles with similar traits so that focused marketing can be carried out. You can determine how each category affects revenue by studying how people in each category interact.
The target market’s customers are not all the same. The better you comprehend each profile, the better it is to concentrate on providing individualized marketing, building loyal relationships, competitively pricing goods, and anticipating how new goods and services will succeed in each segment.
6. Product Development
Market research for product development includes leveraging customer data to guide the whole process of developing or upgrading a product, service, or software and delivering it to the market.
It is difficult to innovate. A short Google search reveals that between 80 and 95% of new products fail each year. Conducting product research for product and app development decreases the chances of a new product or modification failing in the marketplace. Market analysis research can be used at four different stages:
For Product Managers, it is critical to make sure they offer a product that can thrive and have a convincing competitive edge over others in the marketplace.
So, how do Product Managers do market research to evaluate competitive edge? By doing a comprehensive competitive analysis.
Competitive analysis is identifying and analyzing the rivals’ strategies to assess their shortcomings and strengths compared to your goods or services.
1. Competitive Product Research
Every business or product is formed on the desire to solve a compelling need. As a result, a significant amount of market and user research is conducted. Companies that thrive are those that consistently refine and enhance their offers and overall service—in other words, the user experience of their product.
Conducting a deep dive and analyzing the competition can help the Product Manager develop a stronger product or custom design approach. Discovering the why, what, and how behind the rivals’ goods and services is an essential competitive analysis practice.
2. Prepare a Competitor Analysis Report
A basic competitor analysis report includes a thorough examination of the selected rivals. The report should emphasize important instances where rivals failed as well as where they excelled.
A few key points that should be included in a competitor analysis report are as follows:
The following are also included in the competition analysis matrix:
3. Competitive Intelligence Updates
Competitive intelligence collects meaningful data from a wide range of published and unpublished sources efficiently and ethically. A company would effectively deploy competitive intelligence by creating a thorough enough image of the market to predict and respond to difficulties and issues before they occur.
Competitive intelligence is a comprehensive review activity in which firms learn about their rivals’ business plans, including the clients they service and the markets in which they operate. Competitive intelligence also examines how certain events affect competing firms. It also shows how distributors and other stakeholders may be affected and how new technology can swiftly render every hypothesis wrong.
After obtaining all of the findings, the Product Manager can start working on the product strategy by soliciting ideas and perspectives from all team members.
4. Transforming Competitive Intelligence Into Action
The intelligence you acquire should have a direct impact on the actions and tactics implemented by your business. You’ll see your competitors pass you by if you collect data merely to store it. However, if you actively apply the knowledge you’ve learned, you’ll come up with greater enablement, more successful sales teams, and, eventually, higher win rates.
Decision-makers in a company will use the insights to develop business plans that will drive the organization on a suitable path. The Product Manager should give them timely and relevant information and do it through the right channel.
The product team utilizes CI to enhance their goods or services and collaborates with the marketing department to position the product/service to persuade customers/clients to purchase it.
The market analysis does not necessarily assist the Product Manager in creating a unique product; rather, it empowers the Product Manager to make evidence-based decisions and prioritize tasks on the roadmap. It provides important reference points and assists Product Managers in visualizing their aims and objectives.
A competitive analysis, when done effectively, can significantly boost customer satisfaction and conversion rates while also ensuring that the product stands out from the competition. Check out UNext Jigsaw’s Integrated Program In Business Analytics if you’re interested in an in-depth understanding of business tactics. PG Certificate Program in Product Management is a great choice for a flourishing career in Product Management.