We all know Starbucks as a hugely popular coffee chain. It makes billions of dollars in revenue from the thousands of stores it operates around the world. But what many people don’t know is that, back in 2007–2008, Starbucks had to close more than 900 stores and lay off 34,000 employees. It was facing a huge downfall.
But Starbucks rose again. In 2009, it started tracking its brand influence and analyzing its customer needs, the cafe culture market, and competitors. It also focused on digital marketing strategies, and in a few years, it regained its position as the number one coffee chain in the world.
The moral of this story is that no brand, however big or small, can afford not to track and analyze its market and competitors. It’s essential for market survival.
Let’s take a look at some of the reasons why brands need to track and analyze their markets and competitors:
To Understand the Market
The first and most important reason brands need to track and analyze their markets is to understand the market better. This includes understanding the needs and wants of consumers, the latest trends, the competitive landscape, etc. Moreover, by understanding the market, brands can develop better marketing strategies to reach their target consumers.
For example, recognizing that more and more people were interested in healthy food options, McDonald’s introduced salads and fruits to its menu. Similarly, understanding that people are using technology to track their fitness, Nike launched its fitness app, Nike+ Run Club. There are countless other examples of how brands have used market analysis to their advantage. The bottom line is that it’s difficult for brands to survive, let alone thrive, without understanding the market.
To Understand the Competition
Another important reason for brands to track and analyze their markets is to understand the competition. Competitor analysis is important because it allows brands to develop strategies to stay ahead of their peers. Moreover, it also allows brands to identify any potential threats from new or existing competitors.
For example, understanding that its main competitor, Nike, was selling more products online, Adidas decided to focus on its e-commerce presence. Similarly, understanding that people were increasingly interested in plant-based food options, McDonald’s introduced vegan burgers to its menu.
Similarly, Jio, a telecom company in India, disrupted the market by offering free data and calls to its consumers. During that time, data was very costly, and most telecom companies offered only 3G data services. On the other hand, Jio not only offered free data, but it also provided the next generation of data services—4G. As a result, Jio was able to acquire a large number of customers and stay ahead of its competition.
To Develop Better Marketing Strategies
As we mentioned earlier, one of the main reasons why brands need to track and analyze their markets is to develop better marketing strategies. This is because market analysis provides brands with the insights they need to develop targeted and effective marketing campaigns.
For example, by understanding that people are interested in health and fitness, Nike developed a marketing campaign centered around the theme of “just do it.” And we all know how legendary the tagline has become.
Similarly, by understanding that people are interested in sustainable and ethical products, Patagonia developed a marketing campaign centered around the theme of “protecting our planet.”
To Increase Sales and Revenue
Ultimately, the goal of any business is to increase sales and revenue. And one of the best ways to do this is by understanding the market and developing targeted marketing strategies.
For example, Apple launched the “Get a Mac” campaign in 2006 to increase its market share. And it worked. In the following year, Apple’s sales increased by a staggering 36%.
To Reduce Marketing Costs
Another important reason for brands to track and analyze their markets is to reduce marketing costs. Market analyses allow brands to develop targeted marketing strategies that are more likely to reach their target consumers.
For example, Hugo Boss collaborated with Tiktok star Khaby Lame to create a marketing campaign that targeted millennials. As a result of this targeted approach, Hugo Boss was able to reach its target consumers at a fraction of the cost of a traditional marketing campaign.
To Increase Customer Loyalty
Every business wants to have a loyal customer base and increase its customer loyalty. And competitor and market research and analysis can help precisely with that. How? Well, market analysis allows brands to develop targeted marketing strategies that are more likely to appeal to their target consumers.
For example, Tesla is a car company that is known for its customer loyalty. This is primarily due to Tesla’s precise understanding of the needs and wants of its target market, which has allowed it to develop targeted marketing campaigns that have resonated with its consumers.
To Understand Social Trends
Market and competitor analysis allows brands to identify any potential shifts in the social landscape and identify social trends. This can help businesses enhance their operations and strategies, which can lead to increased sales and growth.
For example, many businesses are including diversity and inclusion as part of their marketing strategies by including personalities from marginalized communities, such as LGBTQIA+. Such businesses understand that there is a shift in the social landscape and that people are interested in businesses that value inclusivity.
To Make Informed Business Decisions
For any business to run smoothly and grow exponentially, leaders need to make informed business decisions. Market and competitor analysis can play a huge part in this process. The primary reason for this is that market analysis provides brands with the insights they need to make informed decisions about their products, services, and marketing campaigns.
For example, Google is a company that is known for its data-driven approach to business, market, and competitor research. Google understands that data-driven market analysis is essential for making informed decisions about its products and services.
To Reach New Customers
Finally, another important reason for brands to track and analyze their markets is to reach new customers. Market analysis empowers brands to identify new markets and develop targeted marketing strategies that are more likely to reach these new consumers.
How to Conduct Market and Competitor Research
There are several ways that brands can conduct market and competitor research. Below, we will discuss some of the most common methods:
Primary research is a type of market research that involves collecting data directly from consumers. This can be done through surveys, interviews, and focus groups. This form of research effectively collects first-hand data about consumers’ needs, wants, and expectations.
Secondary market research is a type of market research that involves collecting data from sources that have already been collected. This can be done through online research, such as reading articles and blog posts, or through offline research, such as talking to industry experts. Secondary research is an effective way to get an overview of a market and understand the needs of consumers.
Porter’s Five Forces Analysis
Porter’s Five Forces is a framework that enables the analysis of industries in depth. This framework takes into account the five market forces that can impact a given business: vendors, consumers, substitutes, newbies, and industry rivals.
The analysis of these factors allows businesses to understand the competitive landscape of an industry and make informed decisions about their products, services, and marketing strategies.
SWOT analysis is a popular framework that is used to analyze a business’s strengths, weaknesses, opportunities, and threats. This framework can be used to assess a business’s position in the market and develop strategies for growth.
The strengths and weaknesses of a business are internal factors, while opportunities and threats are external factors. Examining all these factors allows businesses to develop well-rounded strategies that take into account both factors that can impact their success.
Market segmentation is the process of dividing a market into smaller groups of consumers with similar needs and wants. This can be done through a variety of methods, such as demographic segmentation, psychographic segmentation, and geographic segmentation.
An example of market segmentation includes dividing the market into different age groups: teenagers, adults, and the elderly. This allows businesses to develop targeted marketing strategies that are more likely to resonate with each specific age group.
Brand tracking is the process of monitoring a brand’s performance over time. This can be done through a variety of methods, such as surveys, interviews, focus groups, and social media monitoring. Businesses need to track their brand’s performance over time so that they can identify any areas for improvement.
Businesses need to track and analyze their markets and competitors to stay ahead of the curve. There are several ways that businesses can do this, such as by using the methods mentioned in the blog. We hope this blog has given some insights into how businesses can track and analyze their markets and competitors. Thanks for reading!