Preparing a Market Study

This 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.

Part 1: Objectives of the Research

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.

Part 2: Description of the Market

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).

Part 3: Market Metrics

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

Part 4: Competitive Analysis

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.

Guidelines for Doing a Competitive Analysis

The competitive analysis section can follow a format that is shown below. In practice we recommend this section be a single-spaced, two-column report that is limited to a single sheet of paper (both sides used). Consequently, font size is generally 10 point or less.

This report would be made for each of the major competitors. While most of this report focuses on the overall analysis of the competitor, you should recognize that you are primarily interested in how this information may impact your company and, specifically, a product or product line. Thus, you should make sure, where possible, to focus your information on how it impacts the markets in which your product competes.

Note each sub-section within a section will contain 1-5 sentences that explain the sub-section.

  • General Company Information – includes name, location (headquarters, other locations of importance), website address
  • Summary of Business – includes sections that summarize the company, business units and nature of business
  • Business Overview – includes sections on history, ownership structure, types of businesses, mission, strategy/objectives, key executives
  • Recent News/Developments – important company developments within last 6-12 months (e.g., reports from news sources, press releases, financial statements)
  • Financial and Market Share Analysis – includes sections on corporate performance, trends, market share for product
  • Marketing – includes sections on products and services offered, target markets, positioning, customers/users, pricing model, promotional efforts, sales force, and distribution
  • Other Issues – includes sections on technology capability, partnership arrangements, intangible issues
  • Competitors – list key competitors facing this company
  • SWOT – strengths, weaknesses, opportunities and threats

Presenting the Market Study

When a formal marketing study is to be presented in a written form we suggest the following guidelines.

The formal document is preferably in a double-spaced format but that is not a requirement. The plan is recommended to be delivered in a large binder and should include the following:

  • Section One – contains written report with Title Page, Table of Contents, Executive Summary, Body of Report and Endnotes that contains full citations. Include charts or graphs in body of document, however, if there is a page count limit it is generally suggested only small graphics go in the main body and the rest be placed in an Appendix section. Make sure all pages in the body are numbered. Preferably this section can itself be bound (e.g., spiral) and inserted in the large binder. This way just this section can be removed.
  • Section Two – if needed include an Appendix for larger graphics and other important materials such as a survey, tabulations, etc.
  • Section Three – (optional) all referenced documents, websites, etc. (printed out if possible) are included here. Try to section off these documents using tabs. For large documents, such a large research reports, place in a folder that has holes for the binder. For things that can’t be included, such as books, it is suggested that a photocopy of the book’s title page, copyright page and then the page(s) from which material is referenced.
  • All Files – (optional) A storage device (e.g., storage card, flash drive, DVD) or access to storage location (e.g., cloud storage) containing the files used (e.g., word processing, spreadsheet, slides, downloaded articles, etc.).

Other Considerations

  • The information provided in a market study should be based on research collected AND NOT on one’s own perceptions, guesstimates or other unsupported statements. The only exception to this may be within the SWOT analysis, however, even most of this should be supported with some evidence.
  • If you are unable to find certain information it is probably a good idea to make this known so the person reading the report would know of this potential limitation of the market study. Obviously you need to collect good research so you do not end up having too many of these statements.
  • It is generally a good idea to define important terms and concepts when you first introduce them. This will benefit those reading the report who may not possess knowledge in this area. Alternatively, you can create a glossary or definition section in the Endnotes area of the report.
  • Where necessary explain how the research was conducted or how data was collected (e.g., explaining how survey was done).
  • Make note of any limitations of secondary research (research you obtained from other sources) that you used. Unless there are very significant limitations you can generally include this as an endnote.
  • If you are investigating a new/different way of doing something with present customers, then you will need to provide a discussion of the cost/benefit of alternative options. That is, what will customer give up to use something new versus what they will get from using the new product.
  • Remember to reference as much as is needed. We recommend using endnotes instead of footnotes. Endnotes appear next to the sentence, word, quote, number, etc. but usually not as a superscript and usually in parenthesis like this (1). The full reference would appear at the back of the report in an Endnotes section.