Market Analysis - a framework for structuring the marketing plan

The Market Analysis

What is it?
The Market Analysis section includes the Competitive Landscape analysis, the target
market, and detailed customer analysis.
Understanding the competition propels a business to identify competitive advantages
and formulate a marketing strategy.
Why do I need it?
The Market Analysis begins with analyzing the Competitive Landscape and identifying
significant competitors in the market.
The competitive analysis provides an overview of the competition, and the subsequent
Competitor Analysis will provide a deeper understanding of the direct competitors'
companies.
What do I include?
Include main competitors and describe their business model. Explain how they compare
to your company's business model. Selecting two to three competitors for this section
demonstrates that you, as the business owner, understand your competition.
Knowing your competitors helps you to understand how your business compares and
helps you strategize your business model. The marketing plan will focus on how you
plan to differentiate your products/services from competitors.

Market Analysis: What It Is and How to Conduct One

A market analysis is a detailed assessment of your business’s target market, which
lets you project the success you can expect when you introduce your brand and its
products to consumers.
What is market analysis?
When a company wants to sell a product, it must first consider the market (or
marketplace) where similar products are sold. A market analysis examines factors like
market size, competitors, pricing, and customers. It includes both quantitative data,
such as the actual size of the market you want to serve and prices consumers are
willing to pay, and qualitative data, such as consumers’ values, desires, and buying
motives.
In researching this topic, you may come across terms with similar meanings, including
market research and marketing analytics. Here are some important distinctions:
 Market research is the process of gathering information about a target market,
including its customers’ needs and behaviors, in order to market products more
effectively.
  Marketing analytics is the process of studying the metrics of specific marketing
efforts, such as landing page sign-ups and social media engagement, in order to
increase return on investment.
Benefits of a market analysis
Conducting a market analysis can benefit you in several ways by helping you to:
 Spot trends and opportunities in your industry
 Differentiate your business from competitors
 Reduce the risks and costs of launching a new business (or pivoting an existing
one)
 Tailor products and services to your target customers’ needs
 Analyze successes and failures
 Optimize your marketing efforts
 Reach new market segments
 Monitor your business’s performance
 Pivot your business in new directions
How to do a market analysis in 6 steps
This section covers six main steps of market analysis, including the purpose of each
step and questions to guide your research and reflections.
1. Research your industry.
The purpose here is to gain an understanding of your industry at large so that you know
how to enter it, can spot trends, and compete with other brands.
Here are questions to get you started:
 What statistical information can you gather about your industry from sources like
the US Bureau of Labor Statistics, BMI Research, and professional
associations?
 How many businesses are in this industry?
 What’s the market size in terms of the number of potential customers?
 How much revenue does the industry generate?
 What are the industry standards by which companies and consumers operate?
 What external factors affect how businesses in this industry operate, including
laws and regulations, new technologies, world events, and economic and social
change?
 Where do you spot opportunities to innovate within the industry?
2. Investigate the competitive landscape.
This next step takes you from broad industry insights to looking specifically at brands
you’ll be competing against as you seek to attract potential customers in your target
market. Here are questions to guide your process:
 What brands are the most well-known in your industry? Who sets the trends and
captures the attention of customers?
 What are these brands’ offers, price points, and value propositions?
 What sales tactics, technologies, and platforms do these brands use to create a
customer journey?
 How do these brands use content to educate and engage an audience?
 What can you learn from customer reviews of these brands?
3. Identify market gaps.
With insights into how competing brands fare, you can find market gaps, differentiate
your products and services, and stand out within your industry.
Market gaps are needs that are currently not being filled by existing brands. For
example, in the online education industry, learners might be interested in topics that
existing courses do not cover, in which case you could develop a course to fill this
need.
Here are some questions to help you identify market gaps:
 Looking back at your industry research findings, what will external factors like
social change and new laws mean for developing products and services?
 Ask consumers directly: “What do you want or need that you currently can’t find?”
 How specifically do competitors’ products and services fall short?
 In what ways would you be able to create better products and services, given
your strengths and expertise?
4. Define your target market.
Now that you know your industry, the competitive landscape, and the market gaps you
can fill, the next thing to do is get specific about the kinds of customers you want to
serve. Define your target market according to the characteristics that make individual
consumers more likely to purchase products and services from you:
 Of the potential customers in your industry, which specific market segment can
you target effectively?
 How can you describe this segment according to their demographics (age,
ethnicity, income, location, etc.) and psychographics (beliefs, values, aspirations,
lifestyle, etc.)?
 What are their daily lives like?
 What problems and challenges do they experience?
  What words, phrases, ideas, and concepts do consumers in your target market
use to describe these problems when posting on social media or engaging with
your competitors?
 What are the features and benefits of your offers, and how will these provide
solutions to your target market’s needs?
 What marketing messaging can you use to appeal to this target market and
exhibit empathy and understanding?
5. Identify barriers to entry.
As you’re getting to know your target market and tailoring your offers and messaging to
consumers, it’s important to have a clear sense of factors that might prevent you from
entering your market successfully. That way, you can devise a strategy to address
challenges.
Here are some questions to make barriers to entry more visible:
 What are the startup costs of building your business, including product
development, technology, suppliers, patents, and certifications?
 What legal requirements will you need to fulfill before launching?
 What political, economic, and social factors might affect customers' behavior and
their likelihood of purchasing your offerings?
 How much do your top competitors spend on their advertising to earn customers'
loyalty?
 What will you need to do to present your offerings as better alternatives in terms
of value, price, and ease of purchase?
6. Create a sales forecast.
Sales forecasting is the process of estimating future sales so that you can make
confident business decisions or secure funding from investors and lenders. You may
find it useful to create forecasts for specific increments of time, such as the next three
months, six months, or a year.
To generate a sales forecast, answer these questions:
 What products and services do you intend to sell?
 How many units do you expect to sell during each increment of time, based on
your market size and the behaviors of your target market?
 What prices will you assign to each product or service?
 What is the cost of producing and advertising each offering?
Use this formula to quantify your forecast:
(No. of units to sell X price for each unit) – (cost per unit X No. of units) = sales forecast
Marketing Strategy: What It Is and How to Create One
A marketing strategy is a long-term vision outlining a business’s value proposition to its
customers. Rather than describing the concrete actions required in specific advertising
campaigns, marketing strategies are a compass used to guide marketing efforts.
While it may be tempting to hash out a marketing plan right away, thinking about the
marketing strategy first can improve your product's success and give you a competitive
advantage. Learn what marketing strategy is, why it matters, different types, and steps
to create your own.
What is a marketing strategy?
A marketing strategy is an overview of how a business or organization will articulate its
value proposition to its customers. Generally, a marketing strategy outlines business
goals, target market, buyer personas, competitors, and value for customers. It provides
a long-term vision for overall marketing efforts, often looking many years ahead.
Advantages of a marketing strategy
Marketing strategies can have a measurable impact on success.
Marketing strategy vs. marketing plan
People often use the terms “marketing strategy” and “marketing plan” interchangeably,
but in reality, they are two different processes.
A marketing plan describes the concrete actions and marketing tactics undertaken to
complete a marketing campaign. Meanwhile, a marketing strategy outlines the big
picture of a marketing effort, such as the business's target customers. The strategy
describes what the marketing objectives are, while the plan describes how those
objectives are going to be achieved.
For example, imagine an e-commerce business that is trying to grow its customer base.
They start a referral program to encourage word of mouth but it has little success. If
they had created a strategy, they might have realized they needed to tap into new
potential customers instead. A digital marketing strategy focused on targeted blog posts
and search engine optimization (SEO) would have yielded better results.
Types of marketing strategy
There are many different approaches to marketing – such as social media
marketing or content marketing – but strategies for market growth can be found
in Ansoff’s matrix. These four strategies are:
 Market penetration
 Product development
 Market development
 Diversification
H. Igor Ansoff is a mathematician and business manager who created the matrix to help
businesses define their strategies by varying what product is being sold and who the
product is being sold to

Ansoff’s matrix encourages markets to consider the four Ps, or the “marketing mix":
 Product: What is being sold
 Place: Where it is being sold
 Price: What the product costs
 Promotion: How the product is marketed to the target audience
The exact way that a marketer defines the four Ps for their marketing efforts will depend
on the growth strategy they are using and the political and economic outlook of their
market.
Let’s take a closer look at each strategy from Ansoff’s matrix.
Market penetration strategy
Market penetration strategy is a growth strategy that involves selling existing products to
existing markets. It is considered the least risky of all the strategies in Ansoff’s matrix.
The strategy is typically considered most beneficial if the market is either growing or the
marketer alters its promotional efforts through existing marketing channels.
McDonald's "I'm Lovin' It" campaign
An example of a market penetration strategy can be found in McDonald’s “I’m Lovin’ It”
campaign from 2003.
In the early 2000s, McDonald's faced flagging sales and plummeting stock prices.
Rather than creating a new product (product development strategy), McDonald's instead
focused on attracting existing customers in an existing market with a catchy ad
campaign. The result was their wildly successful “I’m Lovin’ it” campaign, which featured
a catchy new jingle sung by Justin Timberlake [3].
“I’m Lovin It” has since become McDonald’s longest-running marketing campaign since
its founding in 1940 [4].

Product development strategy

A product development strategy involves the development of a new product for an
already existing market. Typically, it is considered riskier than a market penetration
strategy because it requires the creation of a totally new product. In order to be
successful, product development strategies typically require innovation and further
research into the existing market, including the profiles and needs of the target
audience.
Uni Kuru Toga's mechanical pencil for every day writing
An example of a successful (and surprisingly interesting) product development strategy
can be seen in the Uni Kuru Toga mechanical pencil.
As odd as it may seem, in the mechanical pencil world the Uni Kuru Toga is something
of a star. “[T]he Uni Kuru Toga is the best mechanical pencil for every day writing,”
opined the New York Time’s Wirecutter in a 2018 article [5]. Wired, meanwhile, called it
“the ultimate geek tool” [6].
What makes the pencil so unique? A specially designed internal gear mechanism that
rotates the lead so it stays sharp as you write and diamond infused lead that doesn’t
easily break under pressure. In effect, as a 2009 commercial for the pencil
demonstrated, it was meant for people concerned with even handwriting and durable
lead [7].
While the market for mechanical pencils was already well-established, the Uni Kuru
Toga was able to find success through a product development strategy that offered
consumers something new and useful.

Market development strategy

A market development strategy takes an existing product into new markets. Much like a
product development strategy, a market development strategy is considered riskier than
a market penetration strategy because it involves introducing a familiar product into an
unfamiliar marketplace. While the product remains the same, the new place it is sold
requires possibly new pricing and promotional efforts.
Microsoft's Hololens technology
An example of a market development strategy is when Microsoft introduced
its Hololens technology to an additional 29 markets in Europe in November of 2017 [8].
The augmented reality headset provides a unique user experience that allows
professionals to work in a “mixed reality” environment. To promote their efforts,
Microsoft released a YouTube video showcasing the unique use cases of the product in
the workplace, such as through interactive employee training programs in industrial
environments [9].

Diversification strategy
A diversification strategy involves the development of a new product for a new market.
The novelty required of a diversification strategy means that it is also the riskiest of the
Ansoff matrix’s four strategies. Diversification strategies require full attention on all of
the four Ps – product, price, place, and promotion—but the biggest risks can also lead
to the biggest rewards
Apple's first iPhone
An example of a diversification strategy is when Apple introduced the first iPhone on
June 9, 2007 at the MacWorld Expo. At the time, Apple was new to the mobile phone
market, but they innovated in the space by adding a music player and web browser to
their new touchscreen phone [10].
“Today Apple is going to reinvent the phone,” CEO Steve Jobs declared before an
audience of reporters [10]. Through much of the presentation, Jobs outlined the phone’s
unique value proposition to customers.
It worked. As of June 2022, there were an estimated 1.8 billion active iPhone users [11].

How to create a marketing strategy

A marketing strategy can set you up for marketing success. As you are creating your
own marketing strategy, consider the following steps to help guide your process.
1. Define your business and marketing goals.
The first step in creating an effective marketing strategy is to clarify your business
objectives and marketing goals. What are you trying to achieve with your market growth
strategy?
The answer to this question will inevitably depend on your particular place in the market
and your own comfortability with different risk levels.
Some examples of business and marketing goals include:
 Grow customer base
 Increase sales
 Increase brand awareness
Whatever your objectives, the purpose is simply to consider what you want to actually
accomplish by expanding your marketing efforts. These goals will guide the
development of your marketing strategy.
2. Conduct market research.
Strategic marketing requires a comprehensive understanding of the marketplace, its
economic and political context, and your product or service's place within it.
As you are conducting market research, you'll want to consider these factors:
 Competitors, particularly their value proposition and market share
 Market size, including the realistic number of customers that would be interested
in your products
 Market gaps where you can provide value
 Possible economic and political realities that could impact the market in the long-
term
As you gain a better understanding of the market, you will also better understand how
you fit into it and where you can grow in it.
3. Create a customer profile.
The purpose of every marketing campaign is to connect with potential customers. Your
marketing strategy needs to include a comprehensive profile of your target audience.
Consider your target audience in relation to the four P's. Think through the following:
 Based on what you know about the market, who is your target audience? What
are their key demographics?
 What is your product’s value proposition to your customer? (Product)
 How much is your target audience willing to pay for your product or service?
(Price)
 Where does your target audience shop? (Place)
 What marketing tactics are most persuasive to your target audience? (Promotion)
As you research and consider these questions, your customer should come more
clearly into view, so you can create a strategy with maximum impact.
4. Synthesize and strategize.
Finally, take the goals you have outlined, research you have conducted, and profiles
you have created to construct a marketing strategy. The critical question you will want to
answer is: how will you align with your target market to meet your overall objectives?
Your answer to this question will be your strategy.
Ultimately, your marketing strategy should cover the following:
 Business and marketing objectives
  Market overview, including key facts and figures
 Competitor research
 Customer profile
 General statement of strategy highlighting the product’s value proposition to
customers
You might consider whether a social media strategy makes sense for your product or
service. If so, your strategy could include user-generated content. Go a step further to
consider which social media channels fit best with your target audience.
The Meta Social Media Marketing Professional Certificate is a great program for
exploring different social media platforms and thinking about which platform is the best
one for reaching potential customers.
Your marketing strategy doesn’t need to be too long. In fact, a strong marketing strategy
can be as short as one page. Remember, this is meant to act as long-term guide for
directing specific marketing tactics, not an action plan of how a marketing campaign will
be done.

Marketing Strategy: What It Is, How It Works, and How to Create On

What Is a Marketing Strategy?

A marketing strategy refers to a business’s overall plan to convince customers to buy its
products or services. A marketing strategy determines how to reach prospective
consumers and turn them into customers. It contains the company’s value proposition,
key brand messaging, data on target customer demographics, and other high-level
elements.
A thorough marketing strategy covers the four Ps of marketing: product, price, place,
and promotion.
Key Takeaways
 A marketing strategy is a business’s plan for reaching prospective consumers
and turning them into customers of their products or services.
 Marketing strategies should revolve around a company’s value proposition and
make use of unique brand messaging.
 The ultimate goal of a marketing strategy is to achieve and communicate a
sustainable competitive advantage over rival companies.
 A marketing strategy is a big-picture idea that informs smaller, short-term
marketing plans.
Understanding Marketing Strategies
A clear marketing strategy should revolve around the company’s value proposition. This
communicates to consumers what the company stands for, how it operates, and why it
deserves the customers' business. A well-constructed value proposition provides
marketing teams with a template that should inform their initiatives across all of the
company’s products and services.
The ultimate goal of a marketing strategy is to achieve and communicate a
sustainable competitive advantage over rival companies. To do this, a business must
understand the needs and wants of its customers. Whether it’s a print ad design, mass
customization, or a social media campaign, a marketing asset should effectively
communicate a company’s core value proposition.
For example, Walmart (WMT) is widely known as a discount retailer with “everyday low
prices.” Low prices are its value proposition, so all its business operations and
marketing efforts are rooted in that idea, which appeals to its core consumer base.1 Its
marketing strategies may be found on TV, in print, or on the accounts of social media
influencers, but they all emphasize the same value proposition of low prices on
everyday products.
TIP: Many companies use market research to identify what is most important to
consumers and how to differentiate their products or services from those of competitors.
This information can be used to identify untapped audiences and develop a plan for
reaching them, which will increase sales and improve a company's bottom line.
Marketing Strategies vs. Marketing Plans
The marketing strategy is outlined in the marketing plan. This is a document that details
the specific types of marketing activities a company will conduct in a given timeframe. It
contains important information such as what the current and near-future marketing
initiatives will be, how they will be conducted, what their goals are, and the timetables
for enacting them. A company may have separate marketing initiatives for each of its
products or services; it may also have multiple marketing initiatives for the same product
or service that are implemented at different times or on different platforms.
Marketing strategies inform a business's marketing across many verticals and over a
longer period of time. These strategies should ideally have longer life spans than
individual marketing plans because they contain value propositions and other key
elements of a company’s brand, which generally hold constant over the long haul.
IMPORTANT: Marketing strategies cover big-picture messaging, while marketing plans
delineate the logistical details of specific campaigns.
For example, a marketing strategy might say that a company aims to increase authority
in niche circles where their clients visit. The marketing plan puts that into action by
commissioning thought leadership pieces on LinkedIn.
How to Create a Marketing Strategy
Creating a thoughtful and effective marketing strategy requires several steps.
Identify Goals
While sales are the ultimate goal for every company, a marketing strategy can also
include short-term goals such as:
 Establishing authority
 Increasing customer engagement
 Generating leads
These smaller goals offer measurable benchmarks for the progress of your marketing
plan. Think of strategy as the high-level ideology and planning as how you accomplish
your goals.
Create a Customer Profile
Every product or service has an ideal customer, and you should have a profile outlining
what you know about yours. It can include:
 Who they are
 What they are most interested in
 What problems they want to solve
 What is holding them back from solving those problems
 What solutions your competitors offer them
 What types of media are ideal for reaching them
If you sell power tools, for example, you’ll choose marketing channels where general
contractors may see your messaging. This could be TV ads, or it might be social media
accounts focused on home renovation and DIY.
Develop a Message
Now that you know your goals and who you’re pitching to, it’s time to create your
message. Your clients have a problem that needs to be solved and something that is
standing in the way of that solution. Your marketing message needs to communicate
how your product or service will solve their problem and improve their lives.
This is also when you differentiate your solution from the one provided by your
competitors and show how it's the best option for your customers.
Define Your Budget
How you disperse your messaging may depend on how much you can afford. Will you
be purchasing advertising? Working with thought leaders or influencers? Hoping for a
viral moment on social media organically? Sending out press releases to the media to
try to gain coverage?
Your budget will dictate what you can afford to do.
Select Your Channels
Even the best message won't work unless it is communicated through the appropriate
medium. Selecting the best channel for your marketing efforts will depend on who your
customers are, who they trust, what types of media they consume, and what budget you
have to work with.
Some companies may find the most value in creating blog posts for their website.
Others may find success with paid ads on social media channels. Find the most
appropriate venue for your content.
Track Measurable Benchmarks
To target your marketing, you need to know whether it is reaching its audience.
Determine your metrics and how you’ll judge the success of your marketing efforts.
Make sure these are clearly defined and measurable. For example, you may decide to
track:
 New leads
 Customer signups
 Revenue
 Sales of an individual product
 Social media followers
 Customer retention
 New accounts opened
Which metrics you track will depend on the goals of your marketing campaign and the
type of business you are running.
What Do the Four Ps Mean in a Marketing Strategy?
The four Ps are product, price, promotion, and place. These are the key factors that are
involved in the marketing of a good or service. The four Ps can be used when planning
a new business venture, evaluating an existing offer, or trying to optimize sales with a
target audience. They also can be used to test a current marketing strategy on a new
audience.
What Does a Marketing Strategy Look Like?
A marketing strategy will detail the advertising, outreach, and public relations
campaigns to be carried out by a firm, including how the company will measure the
effect of these initiatives. The functions and components of a marketing plan include
market research, tailored messaging that targets certain demographics and geographic
areas, platform selection, and metrics that measure the results of marketing efforts and
their reporting timelines.
Is a Marketing Strategy the Same As a Marketing Plan?
The terms “marketing plan” and “marketing strategy” are often used interchangeably
because a marketing plan is developed based on an overarching strategic framework.
The plan outlines marketing activities on a monthly, quarterly, or annual basis, while the
marketing strategy outlines the overall value proposition. In some cases, the strategy
and the plan may be incorporated into one document, particularly for smaller companies
that may only run one or two major campaigns in a year.
The Bottom Line
Companies need to sell their products and services to generate revenue and put them
on the path of being a successful business. To sell their products or services, they have
to let consumers know of them. They must also convince consumers to buy them as
well as convert consumers from competitors. Having a marketing strategy that outlines
this process and more is a crucial step in converting consumers into customers.