Spielwarenmesse: Market analysis: how the right strategy can result in a better offer

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23. October 2017 / Market

Market analysis: how the right strategy can result in a better offer

from Eva Stemmer und Jörg Meister /  Show comments

Market analysis are a look into the past and at the present. They demonstrate how brands, products, the retail trade and even consumers have behaved. And depending on the perspective, they produce alternative insights which may require a change of strategy.

Consumers analyse the market before buying a product. In line with their preferences and buying criteria, they check which products are currently available. They compare products to filter the offer that is ideal for them.

This means that customers have a momentary picture of what is currently available in the retail trade. The insights that consumers gain from such an analysis cover:

  • the product offer
  • the price range
  • the quality and its rating by other consumers or independent institutes
  • the availability
  • the price trend for the desired product over time.

Shoppers view the available offer and learn, for example, where which products and services can be sourced. They also learn whether it is best to wait with making the purchase because of the price trend, or because of an imminent product update.

Target group analyses start with asking the right questions

Market analysis

Retailers and manufacturers, on the other hand, have a different objective when looking at the market. For them, it is amongst others about ranking their own offer within the overall picture.
For retailers, questions about the competition are vital when analysing the market:

  • Does the competition stock similar product ranges?
  • Does it serve similar price points?
  • How does it generate customers?   and how does it maintain the relationship with the customer?
  • Is their action strategic and planned or do they respond to impulses from the outside?

Based on these and similar questions, it is possible to deduct steps for one’s own actions. For example, a look at the competition unveils new possibilities to achieve a unique selling proposition within a competitive context. And even trends can be derived from such an analysis:

  • Which services are popular? And which ones are necessary?
  • What are the keys to attracting the customer’s attention and moving them to buy?
  • Are the methods used by the competition possibly beneficial to one’s own business?

The market analysis is indeed important for retailers to obtain a perspective towards the future - even if it refers to a timeframe in the past.

Observe and address the customer

Marketing for specific target groups

When looking at the market on a more global scale and not only at the level of individual products, it is possible to draw conclusions about developments in society. Different lifestyles can, for example, be derived from the increased demand for a specific product.

The search function of online stores reveals, for example what customers are looking for - or even, what they cannot find. This is helpful to specifically address the buyer and offer new services which the consumer calls for ‑ whether online, or in the shop.

The important thing here, which in most cases also presents the greatest challenge, is the neutral perspective on the target group and the selective definition of the target groups. Changed consumer habits, saturation phenomena within competition or even a strong fragmentation of the market exacerbate this.

Moreover, the communication behaviour of young target groups is changing fast, making it more difficult to reach them. Whereas in the past, consumers could be divided in certain backgrounds or milieus and strictly segregated consumer types or personas, nowadays there are only highly individualised consumer habits.

Digital analytical tools help in these cases to better foresee movements so as not to be trapped and chase after fast-paced and possibly already outdated trends. Frequently, customer loyalty programmes are very adequate measuring tools.

Stay in touch

But the analytical-retrospective observation of the market alone can also be tricky. Such a perspective cannot portrait fundamental changes from new technologies or new players which modify the competition with their strategy. Instead, the analysis of the (current and past) market is just one of the many tools for business-minded future action. However, it should not be the sole tool as otherwise one runs the risk of merely responding to the market instead of taking a lead.

Next to analytical tools, businesses require most and for all courage to look ahead - into the unknown. They need visions and goals which they are willing to shape.

Henry Ford had a very clear opinion about this and once said: “If I had asked people what they wanted, they would have said faster horses.”


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