Market Trend Analysis – Types and How to conduct it for your Business Improvement

Having a clear understanding of the market trend of your industry is crucial, whether you are starting a new business or navigating the development of a new product within your existing business. Analyzing market trends will help you to identify the new opportunities, threats, and gaps for your business improvement.

In this guide, we will discuss some types of market trends and provide best practices on how to conduct market trend analysis for your business improvement.

What is Market trend analysis?

Market analysis involves both quantitative and qualitative evaluation which is the process of understanding everything about the specific target market and predicting future market behavior. The process involves gathering detailed information about the industry, including its size, value, shifts in customers & market behavior, and consumer buying patterns. Through market analysis, you can determine whether your business will be viable or profitable, and identify the strengths, weaknesses, opportunities, and risks associated with a product, company, or industry. So you can create an effective marketing strategy for your business.

Here are some questions that you should consider while creating a market trend analysis,

Types of Trend Analysis

Consumer trends

These types of market trend analysis focus on consumers' changing behavior, their buying patterns, what influences their purchasing decisions, and their needs and preferences. Businesses can use these valuable insights to understand market conditions while launching a new product or service and that helps businesses to develop an effective target market campaign.

Historical trends

By analyzing historical trends, one can gain insight into both past data and future trends. This data is typically divided into years, months, and days. Studying historical data can provide valuable information on how a trend has developed over time and how it can be utilized for future planning purposes.

Seasonal trends

Some industries experience fluctuations in demand depending on the season. Examining these seasonal trends can help in making adjustments to inventory levels, pricing, and marketing strategies that lead to maximizing sales during peak periods.

Economic trends

Economic trends have a significant impact on businesses. By understanding economic indicators like GDP, inflation, exchange rates, and interest rates, it is possible to make well-informed decisions regarding pricing and other marketing plans. It is advisable not to wait until the news outlets report on this data but to act on it proactively.

Social media trends

By Social Listening businesses can monitor social media conversations and analyze hashtags and trends, it is possible to discover fresh opportunities to engage with your target audience and establish brand awareness.

Demographic trends

By examining demographic trends like age, gender, income, and education level, it is possible to gain a better understanding of your target audience. This analysis can help you create marketing strategies that are more effective and resonate with different demographics.

Geographic trends

Examining trends across various regions, states, countries, and continents can provide valuable insights into the differences in consumer behavior and preferences across different areas. This information can then be used to customize marketing strategies and product offerings that align with the specific needs of each region.

How to Conduct Market Trend Analysis for Business Improvement?

Determine the purpose

To conduct a market trend analysis, it is important to have a well-defined starting and ending point. This involves what you already know and what you expect to find. By creating well-defined objectives and scope, you can streamline your research and stay on track throughout the process. Your objectives will serve as a guide throughout the entire process, right from the initial survey setup to the final analysis. Take some time to ask yourself the reasons behind conducting the analysis. Make sure your objective should define the market size, segments, competitors, and customers that you want to analyze.

Data Gathering

To effectively analyze market trends, it is important to gather data from a variety of sources. This may involve primary research methods like surveys, interviews, focus groups, or experiments, and secondary research methods such as articles, blogs, newsletters, industry reports, or third-party data providers like market research firms, or government agencies. Social media also provides valuable insights into customer behavior and sentiment.

It is essential to evaluate the credibility, reliability, and accuracy of each source.  When conducting primary research, you need to survey or interview large enough people to make sure that your results are representative of the broader population. Make sure the respondents will accurately reflect your target audience. Asking the right questions is also crucial when collecting data. When designing survey or focus group questions, it's essential to be specific and avoid leading questions. By doing so, you can ensure that your data is accurate.

Understand Your Target Audience

Discover your potential customer base by understanding their requirements, preferences, demographics, beliefs, temperament, and purchasing behaviors. This will enable you to concentrate on appealing to these customers and promoting your products or services to them directly. You can classify different customers by utilizing market segmentation techniques and constructing personas based on market analysis insights, which may include factors like: 

Analyze Your Competition

Studying your competitors is essential for conducting a market analysis. Gaining a comprehensive understanding of your competitors' product offerings, what features they have, their pricing, their marketing strategies, their strengths, weakness, and their advantages will help you identify effective marketing strategies that you can also implement for your own business.

Visit your competitor’s websites and learn about their products or services and how they position them. So, you can identify the areas where your product can provide unique value among the competition. Examine the marketing channels they use to determine the strengths and opportunities of them. This will help you to identify what works and what doesn’t with your target market.

Conduct a SWOT analysis of your competitors will help you to identify gaps in the market and promote your products more effectively.

Analyze all of your findings

Once you have gathered all the relevant information and confirmed its accuracy. After collecting the data, all you need to do is analyze the data to derive meaningful insights. This will help you to identify the trends, examine consumer behavior, and gain insights into the current market. It is advisable to categorize your research into logical sections and make sure that will align with your objectives, target audience, and competitors. This will help you make better sense of the data and draw actionable conclusions.

Here are some examples to categorize your research findings,

While analyzing the data, it's important to use tools and frameworks to visualize and interpret it. Use frameworks like SWOT analysis, PESTLE analysis, value chain analysis, STP marketing model, customer journey mapping, BCG matrix, regression analysis, cluster analysis, time series analysis, etc to visualize the data. You can choose the tool or framework depending on your specific objectives and the scope of your analysis. This will assist you in identifying emerging trends and understanding the current market dynamics easily. Additionally, it's crucial to be on the lookout for any irregularities in the data that could indicate a trend reversal.

Put Your Analysis into Action

Now it’s time to formulate a plan of action based on your findings. While presenting your findings, it's important to make them clear and engaging. You should present it through charts, graphs, tables, or infographics to demonstrate your points and it helps to highlight the implications and action steps.

The knowledge you've acquired from analyzing trends can inform future business decision-making, introducing new campaigns modifying existing ones, altering your strategy, or changing the way you engage with your customers.

You can use the information you have gathered about your competitors to refine your unique selling proposition. You can also use the insights to improve your marketing channel mix because reaching the right people at the right time and place with the right message is important for every business’s marketing strategy.  If you notice any shifts in consumer behavior, you can change your product or service offerings according to that.

Conclusion

Market trend analysis is an essential aspect of marketing strategy for every business. Through collecting and evaluating a diverse range of data, companies can gain a deeper understanding of customer behavior and preferences, recent trends in the market place and future market behavior. By using trend analysis methods and tools, companies can make data-driven and right decisions with the right knowledge effectively that helps businesses stay ahead of the competition.

I hope this article will help you to conduct a market trend analysis for your business improvement effectively.