What is a Market Assessment?
Clarke Ricks
School of Business, Liberty University
BUSI 690: Policy and Strategy in Global Competition
Dr. Hicks
April 11, 2021
What is a Market Assessment?
A market assessment is a comprehensive analysis of your company’s competitors,
consumers and other industry stakeholders.
A critical part of your company documentation, a market assessment enables your
company to understand the need and demand for its business offerings in the market. It
provides details on market opportunities, growth drivers and barriers, industry cost
structure, distribution channels, market trends, key success factors, market
competitiveness, and consumer preferences.
Conducting a market assessment study is critical for your company whether you are
looking to launch, expand your business or grow your consumer base.
It includes:
Market Dynamics: Outlines the historical and forecasted market growth
rates, market segments, drivers and barriers, regulations and market trends
Competitive Landscape: Outlines the overall competitiveness of the market,
market share of key players, capability, opportunity and threat analysis and
competitive benchmarking
Consumer Dynamics: Offers insights into consumers’ requirements,
preferences, purchase behavior, and maximum willingness to pay
Why is a Market Assessment important for business today?
Market assessment enables your company to:
Identify the market potential of your company by understanding market and
consumer dynamics
Forecast your sales by evaluating the size of existing and potential consumer
base
Access capital by indicating the market potential of your products, or services
Formulate strategies to achieve both short-term and long-term business
objectives
Assess your business performance by benchmarking your offerings against
those of competitors
Estimate the price of your offerings by analyzing consumers’ need and their
willingness to pay
Why is a Market Assessment important for an event tomorrow?
Market assessment is important for an event tomorrow, as it helps:
Assess the market potential and business opportunities for your company
Recognize the potential of your company’s offerings to address current gaps
in the market
Evaluate the competitive advantage of your company vs external market
conditions
Benchmark the offerings of your company with its peers
Assess opportunities to expand to adjacent markets and grow business
offerings post completion of transaction
Pros of addressing Market Assessment
Risk mitigation by understanding market barriers, regulatory scenarios, and
competitive threats affecting your business
Improvement in your market position with the unique sales proposition of
your company’s offerings
Maximum return on investments through understanding of market dynamics
and competitiveness
Improvement in your company’s offerings and increased revenue
Assessment of consumers needs, pain points, and willingness to pay
Improvement in efficiency as it enables your company to restructure based
on market conditions
Cons of not addressing Market Assessment
Increase in inefficiencies as business strategy is formulated without adequate
assessment of the market
Potential operational inefficiencies due to inability to identify market
opportunities and threats
Increase in risk of financial loss with product and services that have limited
attractiveness in the market
Restriction on growth potential due to failure to expand into adjacent
markets and launch new customized offerings
Understand your audience
Now it’s time to drill deeper into your research and understand your target market—
the people behind the demand in your industry. This step involves customer research
and segmenting your audience based on shared characteristics.
When researching your potential audience, you want to know the following:
How old they are
Where they live
Where they work, what they do, and how much they make
Where and how they shop
What they buy, and how much money they spend
What technology they use
How they interact with brands
Their current market perceptions
Their pain points and challenges
Audience research involves both internal and external sources. If you have an
existing audience, you can tap them for valuable insights. Run surveys and
questionnaires to get their thoughts, and pursue more thorough and in-depth
interviews with individuals who exemplify your target customer. If you don’t already
have an audience you can leverage, you might invest in focus groups for your own
research purposes.
External data is equally valuable. You’ll want to understand things like where your
audience lives, works, and hangs out, as well as how much they make and spend.
You’ll also want to gain an understanding of their current perceptions about your
industry or product(s). Here are some places to get external data about your
customer:
Bureau of Economic Analysis consumer spending
US Federal Reserve consumer credit data
US Consumer Product Safety Commission research and reports
US Census Bureau
US Bureau of Labor Statistics demographic data
US Bureau of Labor Statistics employment (and unemployment) data
US Bureau of Labor Statistics earnings data
US Bureau of Labour Statistics employment data
You can also do social listening to see what people are saying online, conduct SEO
research to see what people are searching for, and check customer reviews to find out
how people like or don’t like products that are already in the market.
