Preparing a Market Study Tutorial

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 it discuss aspect of 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, the person doing the research can allude to what is being planned in order to set the stage for why the data is being collected. For example, a marketer 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 an organization as a whole and not just products/services.

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 a 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.

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Part 2: Description of the Market

This sections contains:

General Description

• Offer a one paragraph summary of the market being studied (note: a 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 members of this market 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

List Products and Services Appealing 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)

Full Analysis of Top Current 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 competitors 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 Guidelines for Doing a Competitive Analysis below.

Potential Competitors

• Explanation (though not as detailed as Current Competitors) on who they are or maybe and why they are seen as potential competitors

Guidelines for Doing a Competitive Analysis

When doing a competitive analysis is part of a market study, the preparer of the plan can follow a format that is shown below. This report would be made for each of the major competitors. While most of this report focuses on the overall analysis of the competitor, it should be recognized that the researcher is primarily interested in how this information may impact their company and, specifically, a product or product line. Thus, one should make sure, where possible, to focus information on how it impacts the markets in which the company’s product competes.

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, social media, etc.)

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, legal concerns, intangible issues

Competitors – list key competitors facing this company

SWOT – summarize strengths, weaknesses, opportunities and threats

Part 5: Additional Information

The final section of the market study includes other information including:

Extraneous Variables

• Discuss factors that may affect this market (e.g., technological, social, governmental, competitive, etc.)

Market Trends

• What is expected to happen

Presenting the Market Study

When a formal Market 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. For plans that are printed and given to others, it is recommended it be delivered in a large binder. Whether printed or presented in digital form, the Market Study and should include the following:

Section One – This section contains the 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. For a printed Market Study, this section can 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, social media postings, etc. are included here. Try to section off these documents (e.g., using tabs for printed reports). For large printed documents, such a large research reports, place in a folder that has holes for the binder. For things that cannot be included, such as books, it is suggested to include a copy of the book’s title page, copyright page and the page(s) from which material is referenced.

All Files – (optional) It is generally a good idea to retain a backup of all material and files using such methods as on a storage device (e.g., flash drive) or online storage location (e.g., cloud storage).

Other Considerations

Other things to consider when preparing a Market Study include:

Identify Source(s) of Information – 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. Where necessary, explain how the research was conducted or how data was collected (e.g., explaining how survey was done). When utilizing outside sources for information, these sources should be identified either directly in the section of the study where the information is presented or via references to Endnotes at the end of the study. The only exception to this may be within the SWOT analysis, however, even most of this should be supported with some evidence.

Report Study’s Limitations – If the researcher is 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 the researcher needs to collect good research so the Market Study does not end up having too many of these statements. Also, 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.

Define Key Terms and Concepts – It is generally a good idea to define important terms and concepts when first introducing these. This will benefit those reading the report who may not possess knowledge in this area. Alternatively, a glossary or definition section in the Endnotes area of the report can be created.

Need for Cost/Benefit Analysis – If the Market Study is looking at a new/different way of doing something with present customers, then a discussion of the cost/benefit of alternative options will be needed. That is, what will customers give up to use something new versus what they will get from using the new product.

Provide References – 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 but in parenthesis like this (5). The full reference would appear at the back of the report in an Endnotes section.