Dimensions of Marketing Analysis

There are different dimensions that help perform a marketing analysis. These dimensions allow for the understanding of the market for better operation. The dimensions include:

Market size

Growth rate of the market

Market trends

Market profitability

Key success factors

Distribution channels

Industry cost structure

Market Size

The size of the market is a big key factor in the market analysis. The bigger the market is the more competitors you are likely to have. For a big market, you need to make sure that the products and services that you are providing stand out against the competitors. Otherwise, customers might make a switch to the rival product. Also, the bigger the market, the more you need to rethink pricing. Setting the price of your product too high could lead to a loss in customer base. Setting the price too low could make customers think that you are providing them with cheaper, poor quality products. If the market size you are in is small, then it is likely you can get away with charging a higher price. All of the considerations help fuel the marketing plan, which will discuss more in the next module.

Growth Rate

The growth rate of the market is another big factor in any sort of marketing analysis because it will tell you how long this market is projected to last. Before making the investment, you will need to analyze the growth rate of the market. If the market is likely to grow over time, then you can comfortably invest more in it. If the growth is lower or non-existent, then you and other investors are more likely to be discouraged from investing in the company at all. Therefore, how much time, effort, and importance are put into your business and your product depends on the growth rate of the market.

Market Trends

Market trends help decide which product you will sell. When starting a business, it is important to know what the current trends in products are. When investigating trends, you may want to ask yourself these questions:

What is the thing that customers like?

What do customers need?

How much are they willing to spend?

What other trends may capture their attention?

However, keep in mind that these trends can change at any moment. This could end up being an opportunity for your business, or it could be a threat. If you are comfortable producing only one type of market trend, then the shift in trends could affect you and your business the most.

Market trends help the producer know which of their products will do the best in the market.

Market Profitability

The drive for most companies to get into business is the promise of profit, making them "profit-motive businesses". Before getting into a business, you need to analyze the profitability of the market. With a good opportunity for profitability, you will be more willing to invest heavily. Otherwise, it would be a waste of your time and capital. To be sure to calculate the profitability of a market accurately there are a few things you will need to consider, such as buyer power, supplier power, barriers to entry, and so on and so forth.

Businesses and investors want to invest in products that will do well on the market with a high chance of profitability.

Key Success Factors

Key success factors are the elements that help the business to achieve great success in the market it enters into. These elements are required to stand out among competitors, things that you and your company have done well that have enabled you to produce great results. Those elements include:

Technology progress

Economies of scale

Efficient utilization of resources

Distribution Channels

The distribution channels (which we discussed in greater detail in module 6) are also an important player for your business. Without distribution channels, you would be unable to get your product to your customers. This is why it plays such an important role in marketing analysis. You need to assess how well the channels are and if current channels are good enough for your business or if newer ones need to be developed.

Industry Cost Structure

The industry cost structure helps the investor see how much cost is required for your product's production. Sometimes, companies can come up with ways to decrease the cost and thereby make a bigger profit without increasing the market price. By doing a market analysis, you can come up with newer ways to reduce the cost of production. It can also help create strategies for developing competitive advantages over your rivals.

Cost structure helps the business owners and investors identify how much the product will cost to make, how much the product is worth, and how much they can sell the pro.

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