Market analysis: An essential first step
Market analysis helps entrepreneurs convert their business ideas into product advantages and identify potential customers.
The main questions to ask yourself are as follows:
- Who are the potential buyers?
- What are their actual needs?
- How is the market structured?
- How many competitors are there?
- What are they offering?
Over 25 professional market analysis companies (brought together within the Swiss Association of Market and Social Research Specialists, or the Swiss Interview Institute ) offer customized market research. These services are often too expensive for small businesses. But SMEs can also obtain valuable information using their own resources.
To assess a market by its size, figures and statistics are available publicly or at low cost. Here are a few sources:
- Swiss Federal Statistical Office
- Statistical yearbooks of the cantons and communes
- Trade and sector associations, economic and professional associations
- Consumer associations and magazines (product or other testing)
- Banks (reports on current economic climate and sectors)
- The Swiss agency for the promotion of Swiss foreign trade (OSEC, now Switzerland Global Entreprise, or SGE and its 21 Swiss business hubs)
- The Center of Economic Research at ETH Zurich (KOF); the private regional economic institutes (for example, Bak Basel Economics in Basel)
- The specialist institutes at universities and specialist university centers (including the Swiss Research Institute of Small Business and Entrepreneurship at the University of St Gallen)
- Market research searches at Publizistik.ch
- Private companies: Nielsen Suisse, DemoSCOPE AG
- The specialist press (in Switzerland alone, there are approximately 1,800 specialist publications and magazines)
These figures, supplemented with interviews with market players (e.g. traders, providers, experts) can help provide a better understanding of the company's requirements.
Quantitative data does not provide any information about the reasons that motivate consumers/ the reasons behind consumer behavior. As an alternative to the opinions of professionals (which are often costly), non-professionals can answer the qualitative question “Why?”. Conversations with work colleagues, people who know about the sector and the competition (indirect competition) help to form a more substantiated idea of consumer behavior.
Conversations with potential customers are very effective: they provide companies with a precise response more quickly regarding the opportunity for success that a product or service has on the market. A written survey is also possible, but clearly more expensive to implement.
Analysis of the competition
Analyzing the competition is difficult, since most small businesses do not publish either turnover or market share, let alone margins and profits. But here again, there are some free sources of information which can help:
- Competitors (but not direct competitors)
- The competition’s suppliers
- Establishing links with the competition’s employees using your own contacts
- Visiting specialist and general public trade shows: collecting information and advertising, along with catalogs, and talking with experts
- Requesting brochures, price lists, literature about companies, business reports and illustrated brochures
- Collecting several offers
- Books and lists about sectors
- Specialist magazines, journals, client magazines
- The competition’s websites
This checklist for market analysis, competition and target groups can help you proceed in a systematic way: