Market and competitive insight
Clarke Ricks
School of Business, Liberty University
BUSI 690: Policy and Strategy in Global Competition
Dr. Hicks
April 6, 2021
Market and competitive insight
Use market research to find customers
Market research blends consumer behavior and economic trends to confirm and
improve your business idea. It’s crucial to understand your consumer base from the outset.
Market research lets you reduce risks even while your business is still just a gleam in your
eye. Gather demographic information to better understand opportunities and limitations for
gaining customers. This could include population data on age, wealth, family, interests, or
anything else that’s relevant for your business.
Then answer the following questions to get a good sense of your market:
oDemand: Is there a desire for your product or service?
oMarket size: How many people would be interested in your offering?
oEconomic indicators: What is the income range and employment rate?
oLocation: Where do your customers live and where can your business reach?
oMarket saturation: How many similar options are already available to consumers?
oPricing: What do potential customers pay for these alternatives?
You’ll also want to keep up with the latest small business trends. It’s important to gain a
sense of the specific market share that will impact your profits. You can do market research
using existing sources, or you can do the research yourself and go direct to consumers.
Existing sources can save you a lot of time and energy, but the information might not be
as specific to your audience as you’d like. Use it to answer questions that are both general
and quantifiable, like industry trends, demographics, and household incomes. Check online
or start with our list of market research resources.
Asking consumers yourself can give you a nuanced understanding of your specific target
audience. But, direct research can be time consuming and expensive. Use it to answer
questions about your specific business or customers, like reactions to your logo,
improvements you could make to buying experience, and where customers might go
instead of your business.
Here are a few methods you can use to do direct research:
oSurveys
oQuestionnaires
oFocus groups
oIn-depth interviews
For guidance on deciding which methods are worthwhile for your small business, the
U.S. Small Business Administration (SBA) provides counseling services through our resource
partner network.
Use competitive analysis to find a market advantage
Competitive analysis helps you learn from businesses competing for your potential
customers. This is key to defining a competitive edge that creates sustainable revenue.
Your competitive analysis should identify your competition by product line or service
and market segment. Assess the following characteristics of the competitive landscape:
oMarket share
oStrengths and weaknesses
oYour window of opportunity to enter the market
oThe importance of your target market to your competitors
oAny barriers that may hinder you as you enter the market
oIndirect or secondary competitors who may impact your success
Several industries might be competing to serve the same market you’re targeting. The
Department of Justice provides a diagram of Porter’s Five Forces as one way you can
differentiate your competitive analysis by industry. Important factors to consider include
level of competition, threat of new competitors or services, and the effect of suppliers and
customers on price.
