The Market Analysis is the section of a business plan which shows the business’s research into their potential market, and analyses how to break into that area. While these documents are vital parts of business plans, they should also be conducted every year so the company can keep track of changes in marketing trends and consumer habits. This document is also a vital part of a business’s attempt to find new markets to branch into.
Elements of a Market Analysis:
A market analysis should answer the following questions for a business:
- Who is our target market?
- Where can they be found?
- What do they need or lack?
- How do they make buying decisions?
- Where do they shop most often?
- What are the best marketing tools to reach them? Sales, flyers, online ads, etc.
How to Write a Market Analysis:
These sections are the most common parts of a market analysis, and will require significant research before any conclusions can be drawn.
- Industry description and outlook: look as past trends in your business’s field, and describe how your business works (or will work) in that industry.
- Information about your target market: narrow the market to a manageable size so you can understand why you should go after it.
- Distinguishing characteristics: based on figuring out what your potential market needs, you can answer with how they are distinct from other target markets, and how your business uniquely solves their problems.
- Size of the target market: what are the age range, gender, nationality, special interests, and other distinguishing characteristics of your target market that you can advertise to, or build products for?
- Expected gain in the target market: over the next several months, year, and multiple years, how much of your primary target market do you expect to become interested in and loyal to your business?
- Pricing and gross margin targets: the entire point of running a business is to make money, so analyze how much money you expect to need and earn over the next months and years.
Why Should I Use a Market Analysis Template?
A market analysis is not a simple document. You need to gather and keep track of lots of information, and analyze the information in order to write about it. When you use a template, the outline format can help cue you on what steps to take next. The format can also keep you on task, and focus on clear, professional writing. Download our free market analysis template today to get started!