What is a Market Assessment, and Do You Need One?

If you’re considering adapting your current business strategy or planning on starting a new endeavor, a market assessment is a necessity.

Stepping blindly into a new investment is financially risky. Don’t take unnecessary risks; instead, create a market assessment and see if the investment is worthwhile.

Market Assessment 101

A market assessment is a complete analysis of your customers, competitors, and industry. It’s an important research project that can help you build a business plan, or improve your operations.

All market assessments include the following:

• Competitive Analysis: A competitive analysis reveals the strengths and weaknesses of your competition

• Consumer Analysis: Learn how your audience acts and what they prefer

• Market Predictions: Predictions forecast future trends using historical data

Who Needs A Market Assessment?

There are a number of reasons a business might want a market assessment. Sales might be slowing down, or perhaps you’re starting to expand. Wherever your business is, it can benefit from an updated market assessment.

Businesses That Want a Clearer Vision of The Future

The future will always be uncertain, and you can never know exactly how events will pan out. However, a market assessment gives business owners a clearer vision of upcoming market trends.

Having a better idea of what the future holds will help your business make better decisions like:

• Whether or not you should expand

• How much capital you should invest in production improvements

• Scaling back certain endeavors

A market assessment won’t give you 20/20 vision, but it will help you see further down the road.

Businesses That Want to Better Understand Their Customer Base

Whether you're selling to businesses or consumers, you need to know your clientele well in order to keep them engaged.

Market assessments are for businesses having a hard time reaching their target audience, as well as those who just want to know more about their customers.

Entrepreneurs Looking For Opportunities

As an entrepreneur, you need to always be looking for opportunities. If you do have a great idea, a market assessment is necessary to check the viability of your plan.

How to do a Market Assessment

There are two ways you can get a market assessment:

1. Hire help

2. Do it yourself

Businesses and local leaders in Yavapai County can partner with the Regional Economic Development Center (REDC) at Yavapai College for regional services including data and policy analysis and grant assistance. If you don’t have time to research on your own, we can help you out.

For some small businesses, hiring someone is out of the picture. That’s why we’ve provided some information on how you can perform a market assessment on your own time.

1. Define Your Purpose

Before you do anything, figure out why you want to do market research. You may want more general information about how things are going within your industry. Maybe you’re looking for new market opportunities or ways to engage your potential customers.

Nail down your purpose. It will inform you how you analyze your data.

2. Broadly Research The Industry

Next look into the industry you’re a part of. Include the size of your industry, trends, and its overall state.

You can go about this in several ways. Reading industry reports and formal journals is a great place to start, but remember to consider the validity of who you’re getting the information from.

3. Identify Your Customer Base

Who do you sell to or who do you plan on selling to?

This step will be easier for businesses that are currently selling their product or service. To get a better idea of who your customers are you could implement surveys asking about who they are and why they use your product or service.

Businesses need to identify their target audience before they even open. Decide who your product is for and how you will be engaging with them.

Create a profile of your target audience that includes:

• Age
• Gender
• Buying patterns
• Income
• Lifestyle

This information will help tailor your targeted marketing efforts.

4. Research The Competition

While conducting your broad industry research, you should have identified the other businesses in your industry and area. Now it’s time for you to learn about how your competitors compare to your business.

Think about how much pull they have within the industry and how much market share they have. Are they doing things better than you? If so, how? How much of a threat are they? Read customer reviews and take note of any areas they underperform.

5. Gather Data, Data, and More Data

Get as much data as you possibly can about financials, customer demographics, area demographics—any hard metrics relating to your business that can be tracked over time. You should spend most of your time compiling data when conducting a market analysis. Use the data you find to back up any assertions you make.

Find anything you can find from reputable sources like:

• The Census Bureau

• Market surveys

• Labor statistics

• The Regional Economic Development Center at Yavapai College

  Yavapai County is a fast-growing region with a lot of potential. Using the right data and analytics is important for making the right long-term decisions.

6. Compile and Analyze

Data analysis alone is considered an occupation so this next step may be difficult. Don’t use assumptions to come to conclusions. Instead, follow the data and learn what it means.

If you plan on doing a lot of data analysis in your career, consider taking online courses on this topic. A certificate in data analysis doesn’t just look good on a resume, it will leave you with a practical introductory knowledge of data-based decision making.

Get Resources for Your Business Through the REDC at Yavapai College

We’re here to assist businesses in Yavapai County. If your business needs grant writing help, training for employees, or economic data and policy assistance, we have the resources for you.

Connecting with us will open opportunities to network with like-minded business and community leaders.

Use all the resources available to your business by getting active today.