1. Market Analysis

2. Contents Market size Market share Market growth Competitor analysis
Market segmentation
Market research
Sampling methods

3. Key terms
Market size – the total number of sales in £ (value) or quantity (volume) in a market
Market share – the % of a market an individual business has
Market growth – the % increase in the size of the market on an annual basis
Market segment – a section of consumers in the market which share similar characteristics

4. Market analysis
Businesses use methods of market analysis to find out what is happening in the market
These tools allow them to develop marketing strategies which exploit opportunities

5. Market size
This helps businesses decide the potential profitability in a market
Larger markets tend to have more opportunities to make a profit
When a business is considering entering a new market they will be interested in market size and the fierceness of competition

6. Market share
Market share figures allow a business to compare themselves to their competitors
If the market is dominated by a number of large companies e.g., Supermarkets such as tesco, asda, Sainsbury's it is less attractive for new firms to aim at the entire market
The distribution of market share in a market is influenced by the type of market that the business is operating in (monopoly – perfect competition)

7. Market growth This figure is crucial for a business
Many attractive markets are relatively small and fast growing therefore offering the potential of high profits
Markets that are growing at a rapid rate tend to attract lots of new businesses
Markets tend to grow the fastest at the beginning of the product life cycle

8. Market growth / decline
Sometimes markets suffer negative growth
This often leads to companies leaving the market
Some businesses may be able to exploit opportunities and segments using their own USPs when the market is entering into decline

9. Competitor Analysis
Businesses need to have a good idea about their competitors to enable them to develop valid and successful marketing strategies
Alongside market share a business often benchmarks their current / potential competitors in order to gain a greater understanding of their offering

10. Segmentation Analysis
Market segmentation is the process of splitting up the market into different segments or chunks which share the same characteristics
Characteristics that businesses segment by can include:
Age - Socio economic group
Gender - Culture
Ethnicity - Lifestyle

11. Segmentation Analysis
Segmentation analysis allows a business to tailor their marketing strategy to meet the needs of different customers
Some market segments are more attractive than others as they may display lower levels of competition, faster market growth or more opportunities to make profits

12. Market Research
Market research is the process of collecting, collating and analysing data about the market
Primary or field research is research that is done first hand e.g. questionnaires, surveys
Secondary or desk research uses existing sources of information e.g. books, journals

13. Primary research Advantages Fitness for purpose
Allows to target right segments
Can explain difficult problems / concepts
Disadvantages
Can be time consuming
Expensive
Some forms have low response rates

14. Primary research methods
Postal surveys – these have a high sample size but low response rate, relatively cheap
Telephone surveys – more expensive, higher response rate, can explain questions
Interviews – smaller sample size, higher response rate, may be interviewer bias
Focus groups – provide in-depth analysis, small sample size

15. Secondary research Advantages Quick and easy Relatively cheap
Disadvantages
May be out of date
May not be relevant

16. Secondary research methods
Census – provides information on all the households in the UK, updated every 10 years
Internet – can provide a wealth of information however need to check validity of data
Government statistics
Books and journals
Company reports
MINTEL reports – these are often a good source of market information

17. Sampling
Sampling refers to the methods used to select consumers to participate in market research
Random sample – all of the population have an equal chance of being selected often done using a computer
Quota sample – candidates are chosen based on their characteristics

18. Summary Market size – volume / sales in the market
Market share - % of the market a business has
Market growth – the rate of increase in the size of the market
Competitor analysis – look at statistics on competitors in the market
Segmentation – splitting up the market into different groups based on their characteristics
Market research – finding out about the market:
Primary – 1st hand e.g. surveys
Secondary – 2nd hand e.g. internet
Sampling – method of selection of candidates for market research