How Can Market Research Help You Plan for Business Uncertainty?
As markets plummet, currencies continue to devaluate and companies struggle to maintain balance sheets, businesses look to avoid another crash, while increasing sales and limiting spending. Evaluating where your business is at now and understanding strengths, weaknesses, opportunities and threats helps ascertain if the direction and goals of your business are achievable in times of uncertainty.
To objectively analyse your business and identify key inputs on market potential and competitive positioning, Euromonitor International suggests asking these questions:
How do you measure your position in the market?
Whether your business is in consumer packaged goods, intermediate commodities or the services industry, you need to measure the market you operate in and understand its dynamics to better assess competitive positioning in terms of both revenue and volume turnover.
How much does your organisation represent of that market? Can you penetrate or acquire more market share? Why have you not realized that yet? Is it because of the maturity of product lifecycles, category performance and economic changes or due to consumer confidence?
Understanding the reasons behind your performance through market research helps set smart targets and identifies the quickest way to achieve them.
How can you better understand your competition?
Competitive intelligence assesses how other players in the market are performing and their core competencies. Threats from the competition stem from many angles: sourcing, production, quality, brand equity, distribution, price, marketing investment or innovation. Diving into the granular analysis of these angles helps detect gaps amongst competitors, helping your organisation recognise its competitive edge to build a sustainable strategy.
How can you identify your serviceable market potential?
Fortune 500 companies maintain their leadership through frequent analysis of their serviceable market potential, exploring different forecasting scenarios and studying tipping points.
Companies such as P&G, Unilever, PepsiCo and Coca-Cola adjust their strategic plans according to the range of possibilities from scenario outcomes. They may choose aggressive growth plans in optimistic conditions or frugal ones in pessimistic times. The feasibility of these plans becomes optimised when you gauge tipping points, whether it is penetrating a new market or developing a new product or expanding into adjacent categories to revive organic growth.
How to segment your target market?
Outlining your total addressable market is important to better segment and prioritise goals within your strategic plan.
For example, American Express, Visa and MasterCard not only look at their own cardholders, but also both banked and unbanked populations when outlining target markets and goals. Their primary focus audience is existing cardholders, the most direct segment to revenue, with the banked population a secondary segment. The banked population helps companies increase market share by developing new products that fit customer demand. The unbanked population remains a tertiary segment that could be considered an important target in the future, but not necessarily urgent, as there would be additional strategies beyond product development and adoption required to reach this audience.
To evaluate the needs of your target market, it is imperative to further profile that market in terms of geography, demographics, behaviour and product usage. Fast moving consumer goods (FMCG) companies invest a fair share of effort and budget studying customer profiles and behaviour. Using telephone interviews to online surveys to hours of household observations exploring how products are used and consumed, they learn from and subsequently set specific actions that impact and support strategic goals.
Finding answers to questions such as the market potential, competition and target segment for your product or service helps build an effective business strategy. While these insights are crucial for planning and monitoring your strategy, there are three key steps required to succeed in strategy planning.
First, your business must understand its market position in order to set a strategy geared for revenue generation and profitability. Second, you must change your strategic plan based on the state of the marketplace with implementation important when exploring different forecast scenarios. As economic conditions change, you must be flexible with your business plan’s tactics and execution. Third is sustainability, which requires your business to maintain unique selling points through an established value proposition and continuously achieved targets.
As a market research provider with strategic insights and analysis on 27 industries in more than 80 markets worldwide, Euromonitor International helps you segment your target market, measure your market position, assess your competition and assist in creating a strategic business plan that achieves business goals through syndicated research or custom projects. Contact us to learn more about how we can help.