You might also need to conduct some cross-industry research. For example, a game developer may need to compile statistics on the console gaming market, PC gaming market, and handheld gaming market.
For other countries, consult federal databases and agencies within your nation, or conduct an internet search with keywords like “government statistics [name of your industry]” to locate relevant information.
You can also consult experts within your own company. Just bear in mind that their views may be biased or unreliable.
Be sure to carefully analyze any underlying assumptions that your market analysis relies upon. This is particular important for a new product or a product that is undergoing rapid acceptance. Relevant market sizes should be calculated in both dollar amount and unit amount. In the foregoing example, the relevant market size might be $200 million per year, or 30,000 electric cars.
How has the market size changed in the past year? the past five years? the past ten years? What is the expected growth of the relevant market? What factors will affect market growth? Are new demographics affecting the market? Are demographics changing?
Does your competition engage in billboard, radio, TV, internet, or print ads? How many of each kind are effective? Address whether or not your company could meet or compete with their level of marketing. Think about recent innovations or mistakes the competition has made. Learn from their failures, and improve on their successes.
Determine what lifecycle stage the industry is in. Is it:[9] X Research source Emerging? (very new industry growing at less than 5% per year) Growing? (a state of steady growth a bit over 5% per year) Shaking out? (a state in which companies are merging or consolidating, and/or other companies are failing) Maturing? (growth is slowing to less than 5% per year) Declining? (a state in which there has been no growth for a prolonged period)
Healthy industries are high-growth and generally profitable, with a stable customer base and few barriers to entry. Industries that should be avoided are those that are declining, generally unprofitable, highly competitive and regulated, or difficult to enter. [11] X Research source
Put yourself in the customer’s place. Think about what they see and experience when they first hear about or encounter your product or service. Consider how they think about their choices. In addition to considering your current customer base, think about how you can expand your product or service to attract new customers or pull customers away from your competitors.
You could close with a call to action. A statement like “Given the current state of the market, it is advisable to implement the following business proposal” followed by a rough outline of your proposal can function as a smooth transition into the rest of the plan.
