Preparing a Market Study Tutorial

Preparing a Market StudyThis part of the Principles of Marketing Tutorials provides information and guidelines that professionals and students should consider when presented with the task of researching a market. What follows is NOT a marketing plan. Rather what follows is a market study, a component within the larger marketing plan. (For more information on developing a marketing plan see the How to Write a Marketing Plan tutorial.) Thus, the information provided should not focus so much on what is being planned but on what has been learned about the market.

However, you can allude to what you plan to do in order to set the stage for why you are collecting certain types of data. For example, you can say "Product X is planned to target a specific segment of the XYZ market, consequently, we have investigated certain aspects of this market." Those interested in following these guidelines should not limit themselves to what is shown. Feel free to include more if it is appropriate.

The guidelines apply to almost all products and services. Additionally, these guidelines can be adjusted in order to be used as a study of a company as a whole and not just products/services. Please note this is an ever evolving set of guidelines so you may want to check back on a regular basis for any updates.

The report starts with the researcher providing the rationale for undertaking the study. The tasks associated with this section (no more than one paragraph in length) are to:

  • Offer brief explanation for why this study was done and what is to be learned
    • e.g., prepare for new product introduction, evaluate competitors, look for new market opportunities, etc.
  • Suggest what may be done with the information contained in the study
    • e.g., used to support a marketing plan, used to measure and evaluate previous marketing decision, part of on-going competitive research program, etc.

Included in this section are:

  • Size estimates (current and future) for:
    • Overall market
      • Current size
      • Potential size
      • Actual penetration of current products/service within the total market
    • Individual market segments
      • Current size
      • Potential size
      • Actual penetration of current products/service within the total market
    • Usage rates
      • Frequency of product purchases
  • Growth estimates (current and future) for:
    • Overall market
    • Individual market segments

This sections contains:

  • General Description
    • Offer a one paragraph summary of the market being studied, not e that more detailed description will appear below
  • Target Market(s)
    • Why this particular market(s) was chosen
    • Who are they - complete profile (e.g., demographics, psychographics, behaviors)
    • What benefits do they seek (i.e., what points-of-pain or problems are being solved)
    • What factors can affect their purchase or use decision
    • What attitudes do they have about the products/services currently or not currently offered
    • How is the product used
  • Products and Services that appeal to the target market
    • In general terms (not particular brands) what is currently appealing to this market
    • If there are no current providers, what types of products/services may appeal to this market (i.e., what is used now to solve the problem).

This important section of the market study includes:

  • Summary of Current Competitors
    • Listing by market share ranking (by each target market if possible)
  • Current Competitors - full analysis of top competitors including:
    • Products & Services (e.g., description, uniqueness, pricing, etc.)
    • Market share
    • Current customers
    • Positioning and promotion strategies
    • Partnerships/Alliances/Distributors
    • Recent news
    • SWOT Analysis - Strengths, Weaknesses, Opportunities & Threats
      • It is extremely important to focus attention on the SWOT section of this report. While most other information in this report can be gleaned from company and secondary materials, much of what appears in the SWOT section is based on the researcher’s own perceptions of the competitor based on the information collected. Consequently, this is often one of the hardest areas of the report to write.
    • And other information as shown in the examples in the next section
  • Potential Competitors
    • Explanation (though not as detailed as Current Competitors) on who they are or maybe and why they are seen as potential competitors

In the next section we continue our discussion of competitive analysis by offering guidelines for constructing this section of the market study