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Why do we need to understand the market?
Why do we need to understand the market?
A market analysis is an assessment, which allows you to determine how suitable a particular market is for your industry. You can use market analysis to evaluate your current market, or look at new markets.
Whether you are a startup, looking to expand, or reevaluating your current market, a market analysis helps you to identify the attractiveness of a market. It also detects current and future risks of operating in that location.
Market analysis provides you with a holistic, or well-rounded picture of the markets you are interested in operating in. The components of the analysis include several evaluation tools, including a discussion of your industry and its outlook in the market. It also analyzes the target market, conducts a competitive analysis, and identifies cultural and legal regulations.
source: https://study.com/academy/lesson/what-is-market-analysis-definition-examples.htmlBut what is the market?When we talk about "the market" we generally mean the place where buyers and sellers meet to exchange goods and services for money. And this is not a bad starting point for our thinking.In our course, we think of the market as the total number of potential customers for your product.
In our course, we think of the market as the total number of potential customers for your product.
Background Reading
Background Reading
This article summarises nine lessons learnt by the author from their experience of launching a startup.
While all of the lessons are good, there are some that are very relevant to the topic of market analysis.
These are:
- Lesson 2 - know your industry and market
- Lesson 3 - talk to your customers early (and often)
The purpose of a market analysis is to develop insights and understanding about what is happening in your products market as well as related markets. It is important to think of related markets as well - as these can have a major impact on your market.
This can be extended to understanding customers, because they form a significant part of any market!
Article - 9 Lessons from Founding a StartUp Experience.pdfA Simple Exercise
A Simple Exercise
How did you decide and choose what to wear to school today?
A class discussion...Choosing what to wear is the result of your own mini market analysis.
You have to think about what is fashionable (trends, tastes, preferences), what your customers will think (the people who you are trying to impress with your sense of style), what products work with each other (nobody wears two pairs of shoes at the same time for example), what the market conditions are (the weather for example), what is simple and easy (customers don't like complexity), what resources are available (what is in your cupboard)...
Article: Determining Market Size:
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