Know How to Analyzing the Industry Trends for Marketing

What Is Market Industry Research?

The definition of market research is the process of gathering, analyzing, and interpreting information about a market, about a product or service to be offered for sale in that market, and about the past, present, and potential customers for the product or service. It is the process of determining the viability of a new service or product through research conducted directly with potential customers. Market research allows a company to discover the target market and get opinions and other feedback from consumers about their interest in the product or service. Companies use market research to test the viability of a new product or service by communicating directly with a potential customer (Moisander, Närvänen, and Valtonen, 2020).

With market research, companies can figure out their target market and get opinions and feedback from consumers in real-time. This type of research can be conducted in-house, by the company itself, or by an outside company that specializes in market research. Market research is a combination of primary information: information gathered directly or secondary information, which is information that an outside entity has already gathered. The research includes surveys, product testing, and focus groups. The purpose of market research is to look at the market associated with a particular good or service to ascertain how the audience will receive it. This can include information gathering for the purpose of market segmentation and product differentiation, which can be used to tailor advertising efforts or determine which features are seen as a priority to the consumer. (Mooi, Sarstedt and Mooi-Reci, 2018).

Why Is It Important to Analyze Trends Explain?

Trend analysis helps in understanding how the business has performed and predicts where current business operations and practices will take the organization. If done well, it will give the idea about how it might change things to move the business in the right direction. As with any other type of prediction (otherwise known as a calculated guess), the success of trend analysis hinges on the basic principle of “what you put in is what you get out”.  Key considerations here are the accuracy and completeness of the data, the frequency of data collection, and having the data in an easily accessible and usable format (Guven 2020).

It is also important to have something to compare against.  Benchmarking should be used to create the ideal gold standard to serve as your reference point.  Benchmarks can be created by looking both internally and externally.  If there are similar-sized organizations within your industry that are performing well, those could be used as your benchmark.  Similarly, if there are particular departments within your organization that are performing well, they too can become benchmarks.  Even a particular period (i.e. a particular financial year) can be used as a baseline for tracking purposes (Guven 2020).

Trend analysis can help improve business by identifying areas where your business is performing well so you can duplicate success, identifying areas where your business is underperforming, and providing evidence to inform your decision-making (Guven 2020).

What Are the 4 Types of Market Research?

While there are many ways to perform market research, most businesses use one or more of four basic methods: surveys, focus groups, interviews, and customer observation. The type of data you need and how much money one is willing to spend will determine which techniques to choose for the business.

Surveys- With concise and straightforward questionnaires, one can analyze a sample group that represents the target market. The larger the sample, the more reliable the results will be. In-person surveys are one-on-one interviews typically conducted in high-traffic locations such as shopping malls. They allow to present people with samples of products, packaging, or advertising and gather immediate feedback. In-person surveys can generate response rates of more than 90 percent, but they are costly (Nunan, Malhotra, and Birks 2020).

Focus groups- In focus groups, a moderator uses a scripted series of questions or topics to lead a discussion among a group of people. These sessions take place at neutral locations, usually at facilities with videotaping equipment and an observation room with one-way mirrors. A focus group usually lasts one to two hours, and it takes at least three groups to get balanced results. (Wilson 2018).

Interviews- Like focus groups, personal interviews include unstructured, open-ended questions. They usually last for about an hour and are typically recorded (Wilson 2018).

Focus groups and personal interviews provide more subjective data than surveys. The results are not statistically reliable, which means that they usually don't represent a large enough segment of the population. Nevertheless, focus groups and interviews yield valuable insights into customer attitudes and are excellent ways to uncover issues related to new products or service development (Wilson 2018).

Observation- Individual responses to surveys and focus groups are sometimes at odds with people's actual behavior. When you observe consumers in action by videotaping them in stores, at work, or at home, you can observe how they buy or use a product. This gives you a more accurate picture of customers' usage habits and shopping patterns (Wilson 2018).

Why is Market Research Analyzing Necessary for Business?

The market research analysis is necessary for business as it can identify how customers and potential customers might view the business and identify gaps in customer expectations. This is powerful information to have when completing your marketing strategy. Having good market intelligence helps to minimize risks when making key business decisions (Aldea et al. 2018).

What Are the Benefits of Industry Market Trend Analysis?

Using market trend analysis, analysts can make a well-charted comparison between two or more companies for a given period of time. It also acts as a great tool to compare the company's performance with the industry average (Zhuo and Ma 2020).

Trend analysis allows you to predict what's going to happen, based on what's already happened. It provides businesses with information regarding marketing and sales performance, product development, spending, and more. It also enables businesses to make data-driven decisions with regard to future events. Trend analysis methods help analysts and the management to understand the short-term liquidity position of the company. It is also an ideal tool to measure the long-term solvency position of a firm over the years by using related financial trend ratios (Zhuo and Ma 2020).

How Does Analyzing the Industry Trends Help for Marketing?

An industry analysis and trends business plan is a component of a business plan that provides a comprehensive insight into industry conditions and trends that can impact a company's success and growth (Taylor 2020).

Trend analysis is a method to analyze the statistical data and recorded market behavior over a defined period of time and generate valuable insights using this data for strategizing and forecasting future business plans. It helps to identify the dominant traits of the market and the consumers associated with it. One of the reasons why organizations or businesses want to conduct trend analysis is to understand and obtain greater insights into how the market is reacting, what are the primary preferences of the consumers and what are strategies an organization would need to induce. It helps in understanding the changing dynamics of the market. Organizations need to analyze trends with respect to innovation in products, market competition, changes in operations, and delivery methods. For example, if a particular product has dropped in sales despite all other factors being the same, it is time to do a situation analysis to evaluate the packaging, competitor’s products, and alternatives available as well as a quick innovation check. These factors help businesses to understand the market curve and stay ahead of their competitors (Ivanova et al. 2022).