How to Determine Market Knowledge

Most businesses don’t have a clear idea where their business sits in the market. Don’t let this be you. Without a clear market profile from the start, you’re building your marketing strategy on shaky foundations, rather than the rock solid base it needs.

Start by being honest with yourself and developing a clear picture of your business, its uniqueness, its competitors and the market you’re in. It’s vital that you take time over this and do it properly in order to keep your marketing activity customer-focused. Yes, it’s painstaking, and at times frustrating, however, it’s something even big businesses fail to do – and it shows.

Developing a clear situation analysis will provide a solid and strong foundation for all your marketing activity. Nothing beats it. So invest the time and get it done. I know you’ll be glad you did.

How to determine market knowledge

Not sure where to begin?

1. SWOT analysis

You may or may not have seen a SWOT analysis before. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses are internal factors you have some control over, opportunities and threats are external factors beyond your control.

A SWOT analysis will set a foundation for your strategy and force you to be honest and realistic with yourself. It enables you to improve the efficiency of your business, discover growth opportunities and deal with risk proactively. Many times when I sit down with clients to do a SWOT analysis of their business we uncover areas they were blissfully unaware of previously. There’s almost always an ‘aha’ moment.

How you go about this is up to you. Personally, I do it by myself at first then seek outside input. If you have a senior team member or business coach, you may want to do it with them. Whatever works for you.

2. Develop a market profile

Carefully assess the market you're operating in. Define your target market according to age, gender, location, industry, job title, company size etc. Be as detailed as possible.

Next, estimate how many of these people there are in the area you want to serve. A good place to start are resources such as ABS and IBIS.

Once you have the numbers, decide what percentage of them you are aiming to convert to customers.

3. Who are your competitors?

Who are your five closest competitors based on your location (if appropriate), industry and target market? Complete an analysis of them using the following headings

• Value Proposition
• Target Audience
• Staff
• Products/Services
• Pricing
• Marketing
• Strengths
• Weaknesses

4. Develop your customer profile/persona

There are many tactics you can use to develop a profile of your ideal customer. Use all existing customer information you have to form a picture of your current customer – their demographics, location, market segments and pain points.

Knowing your customers and their segments is especially important for small business. As a smaller business, you can’t go after everyone so you need to plan your activity carefully.

Next, write down a list of all the existing customers/prospects you know of and compare their similarities.

If you or your team have personal contact with existing customers then interview them via phone or in person to obtain some first-hand information about your audience.

Survey your prospects by coming up with an incentive and posting to social channels and Quora to see how they rate you in comparison to competitors.

And don’t forget to have fun creating your customer persona for each segment. Give him or her a name, draw a portrait and stick it up in your work space and refer to them by name whenever you make a marketing decision. Will Ms. Smith respond to this? Or would this appeal to Mr. Jones?

Follow this process and you will be streaks ahead of your competitors who haven’t taken the same time and trouble.