Savvy business owners know that doing comparative market analysis online is crucial before doing anything. After all, before you launch a product or try out a new strategy, you want to know what your competitors are up to.
That way, it’s much easier to learn from their mistakes, as well as their successes.
Before explaining how to conduct comparative market analysis online, you should know that analyzing the market is vital before commencing any business. In simple terms, let’s say you want to buy a laptop.
Do you just haphazardly walk into the store and pick out the laptop that appeals the most to you?
No, obviously not.
You go online, search for the best specifications, the best manufacturer, the best prices; more importantly, you want the best bang for your buck. In pure and simple terms and on a much smaller scale, that is what a comparative market analysis online is.
This same principle applies to any business decision.
What Is Market Analysis?
As part of any business plan, conducting a market analysis before taking any action is crucial. In olden times, you might have just opened up business without conducting any research. This may have worked 50 years ago.
However, with today’s vicious market, SMEs are popping up all over the place and competition is fierce. Without analyzing what exactly you’re getting into, it pretty much means you’re going in blind.
So what is a market analysis exactly? In a more technical fashion, it is both a quantitative and qualitative review of the target market. The research is primarily concerned with:
- The size of the market,
- The consumer,
- The competition,
- And the economic status of the market.
In other words:
- Who is going to buy your product?
- How do they want to pay for it?
- Who else is selling a similar product?
Why Is Market Analysis Important?
What does a market analysis tell you about a market? By researching the market and reviewing the results, you get a general idea on the direction of the market. By the end you should know the ins and outs of the market you’re investing in.
Below are some of the key elements of conducting a successful market analysis online.
Segmenting the market into groups, whether by age, gender or social standing is the first step to getting to know your customers. The first thing a market analysis tells you is who your customer is.
This valuable piece of info tells you who to market your products to. By studying up on your consumer, you will be able to satisfy their needs more easily. Knowing your targeted demographic is vital and here’s why.
By zeroing in on the desired demographic to target, the product can be tailored to their experience, thus gaining more customer satisfaction. Specifically, you should at least have a clear picture of your audience’s:
- Preferred online channels.
The second most important part of market analysis online is knowing who your competitors are. Identifying the strengths and weaknesses of both your competition and your own business is valuable information.
What’s more important is identifying your business’s competitive edge.
This means finding out your opponent’s weakness and your own strengths. That way, you can draw up a strategy to have the ability to be competitive in the market. This is crucial when entering a new market terrain.
A market gap is a consumer need that is not fulfilled by the established businesses in the market.
Finding a gap in a market is akin to finding a pot of gold. A good market assessment will locate the market gap and enable the investor to fullfill it. Satisfying a missing consumer need is one of the best methods to stay competitive in the market.
Alternatively, sometimes it’s possible to create your own gap in the market, with a truly innovative new product. The best example of this is the iPad. Before this launched, you probably didn’t even know you wanted a tablet.
Carrying out competitive analysis online also helps you to figure out which marketing strategies offer the best return on investment in your industry. This is especially useful if you don’t have a large marketing budget.
This means you don’t have to waste money experimenting with new marketing ideas.
You can check out what kinds of social media posts get the most engagement in your industry, or what kind of content marketing offers the most return on your investment. This helps to guide your investment.
How to Conduct Comparative Market Analysis Online
Now that the idea of market analysis is clear, we can better understand the nature of comparative market analysis online.
What is comparative market analysis? Simply put, it is the evaluation of prices of similar products before engaging in any purchase or selling transactions. Comparative market analysis can be done in any industry online.
To fully understand how comparative market analysis online works, here is an example that could better help understand the parameters of the assessment.
A prospective buyer wishes to bid or send an offer on a small one bedroom apartment. The intended apartment is on the 6th floor of a 1600 square foot apartment complex. The owner is asking for £120,000.
Through a comparative market analysis online, the buyer finds the comparables. These similar apartments that were recently sold are from nearby apartment complexes. That way they can compare the prices.
There are a number dedicated tools you can use for more specific kinds of competitive market analysis online. For example, tools like Semrush can be used to analyse the digital marketing and SEO strategies of your competitors.
Never Go in Blind
Accurate research and assessment is key when it comes to taking any steps in the business world. In today’s world entering a market without fully knowing its parameters is guaranteed to produce an unsuccessful business.
Whether it’s opening a business or buying a house, thorough research is crucial in guaranteeing a smooth and successful transaction. In business, market analysis is one of the most important parts of any startup strategy.
When done correctly along with a detailed business plan, the investor will be clear on the path their business is headed. As for comparative market analysis online, when conducted thoroughly, it guarantees the buyer a fair deal and gives the seller an estimate to help ease the transaction.