Explain the importance and value of conducting a market analysis for short, medium and long term decision making within your chosen organisation
Date of Entry – 5/7/2016
Market analysis in the short term is all about quick fixes for your business, tackling today’s problems and to set yourself up to tackle future challenges. In order to stay on top of your short term decisions you must be aware of your target market; for example, if customers were to change their buying mentality for the product or methods of buying the product you must be able to adapt quickly to suit the needs of the consumer so that your market share does not diminish. Keeping a steely eye on your competitors is paramount to short term decisions as you may have to adjust your pricing strategy to suit; if Tinder’s competitors were providing free extra features for their consumers then Tinder would have to quickly consider providing free ‘superlikes’ perhaps for their consumers. Short term decisions are made much easier if your market analysis is continuous so that there are no surprises.
Seeking the views of your consumers is of paramount importance when deciding where to go forward with your business. Holding discussion meetings for your consumers is a very small outlay cost when compared to the positive value of the feedback received. These sessions can provide your business with information on what your consumers want more of in your product, what they do not like about your product and what new features they would like to see to make their experience better. With this information you can assess whether what your consumers want suits your business financially and, if it does, then what tasks need to be set to complete these new features, as well as ironing out features which the consumers do not like. Without market analysis and customer feedback, making medium term decisions could send you business down the wrong path, not give your consumers what they want and so ultimately losing market share.
Retaining your market share and identifying a steady growth strategy are the main focus of long term decisions. Market analysis is important when making these decisions to understand, for instance, how demographics will change, how long term economic changes will impact the cash people have to spend and how new technology may be made available which could change your particular sector. However, in reality you can only predict so far where the market may go and no market research is likely to foresee sudden economic downturns for example, which may have a significant impact on your profitability, market share or short term revenue.