What characteristics of this fast-growing suburban population made hospital administrators envision a potential market? The primary objective in analyzing any market is to determine the potential demand for some good or service being offered to that market.

The market analysis process typically determines the size and composition of the target market and profiles the identified area in terms of its demographic and socioeconomic characteristics. The market is also typically profiled in terms of such health-related characteristics as disease incidence, utilization rates, and referral patterns.

The initial market analysis attempts to estimate the market potential. The analyst will typically determine, for example, the age distribution, racial characteristics, and marital status of the target population, along with such socioeconomic characteristics as income levels, workforce characteristics, and educational levels. Through this process, the analyst compiles all of the information necessary to determine the potential market for the goods or services being offered.

Years of experience with market analysis suggest that such characteristics need to be verified from as many perspectives as possible and interpreted on the basis of any information on the community that may have a bearing on the issue. An analyst must be able to read between the lines and capture the essence of the market, which may not be obvious from the raw data.