Every marketing expert will tell you that before launching a product it is fundamental to analyze the targeted market:
“What is the market size?
How is the competitive environment?
What is the benefit of the new product?”???
These analyses principally lean on the results of studies (customer tests, sample group of distributors, analysts’ reports…) which cost can represent a real obstacle.
This is why a lot of companies evade this step. Then, they take the risk of a commercial fail and of a resources waste.
The lack of budget for marketing studies is not a fate. It is possible to realize a relevant market analysis by using a cheap alternative approach.
Product Managers present you this approach.
1. Precisely identifying the targeted market
The first step consists in defining the market you want to analyze: the targeted market. The pursued goal is: do not dissipate your energy in too much research, but, on the contrary, focus on one precise market. During this step, it is recommended to make a lists of the key words associated with the targeted market. They will be very useful for your Internet search.
2. Multiply your information sources
Depending on the targeted market, the information sources are more or less abundant. Among the major information sources, there are:
- The distributors’ or manufacturers’ websites : information on the organization, the products and services
- The press releases: news of the competition, market trends…
- The companies’ financial statements: you usually find market data and strategic orientations and trends
- Institutional websites or Statistical Institutes (Insee, Eurostat, Ined, CCI…) : a lot of basic information is available for free or at a very cheap cost.
- Specialist press, online or hard copy
- The sector’s experts (business institutes: GfK, Gartner, Jupiter Research) : they publish articles that contain key data to promote their studies.
- Customer Forums; easy to access, this is a gold mine of information on the existing products and the customers’ expectations. But, bringing together the information can be a difficult task.
Depending on the sector, you will have to favor quickly some sources more than others. For example, if the market is a niche, data may be very difficult to find. Then, there is nothing better than interviewing an expert of the sector.
3. Leaning on the Internet search with relevant key words
The key word search on Internet can help you find a lot of information. But, it requires a choice of relevant key words. So, sometimes you will have to use technical vocabulary specific to the market, or search in the English sources, or using the names of the directors for your search.
The key word search is also helpful to identify new information sources to which you didn’t think about.
For example, the search “2007 mobile world sales”, refers to a huge number of specialist press or general public websites, and also to wholesalers’ websites, manufacturer’s or operators. These different types of websites have to be explored to obtain additional information.
4. Do not forget to interview market experts
There is nothing like interviewing a specialist of the sector. For example, a specialized journalist will give you a detailed picture of the market; a distributor will give you the latest sales trend.
Be careful to not take everything at its face value! The sales of one retailer in Paris do not represent the sales of all the retailers in Paris let alone represents the French sales.
5. Synthetizing heterogeneous information and updating it regularly
Internet is a never-ending source! Conducting a market analysis is more a data processing problem that an availability of the information problem. Evaluating the relevance of the data, prioritizing the different sources, selecting the most relevant data, are tasks that the analyst will have to do carefully. His expertise will be a fundamental asset to achieve it.
Furthermore, a market analysis is a process and not a one-time task. You need to update it regularly.
For that, it is recommended to subscribe to the newsletters or the RSS feeds and to refer regularly to some websites.
Over time, the analysis will become keener and the understanding of its market by the company will be better.
You need to stay lucid: without budget, it is hard to obtain an acute view of the market.
How can you know the best seller of a market without a distributor sample?
How can you validate the interest of the customers for a product without an ad hoc study?
However, you can obtain relevant results with a good method and some experience. These results are always better than launching a product without knowing anything about the market.
The risks you could meet
- Too much time spent:
it is really easy to spend many days on a market study without collecting any results. This is usually the consequence of a search with a lack of focus. The solution: establish clearly, before starting to search, the pursued goal and the list of results you want to obtain.
- Vague results:
some markets are difficult to define. Ex: estimating the market for a transverse software (ex: management of the information). Quantifying this market is a real challenge. The solution: Sort the more attractive sectors (a priori) and do not hesitate to establish hypothesis (ex: this sector devotes X% of its turnover for this kind of product).
- Results difficult to justify:
The goal of evaluating a potential market is to have a keener view, not to become all-knowing. The first estimate will have to be checked against the reality of the market and shared with other actors of the sector. Then, they will be modified, updated, enriched and validated. The view will become keener as time goes by. The company will be able to establish marketing predictions.