Sunday, May 13, 2012
THE MARKET ANALYSIS – WHAT YOU NEED TO KNOW
The Market Analysis is a critical component of, and the starting point for, the Brand Marketing Plan. It identifies and addresses where our brand stands within the context of the marketplace (and corporate portfolio) that provides insights into its future potential. It is the opening chapter in the brand’s story to management that will weigh heavily in their decision as to its role within the company (i.e., growth, maintenance, etc.), and the level of support (i.e., attention, funding, etc.) they give it.
What You Need to Know
The Market Analysis requires a thorough and thoughtful analysis of those factors that impact, explain and are predictive of brand health and performance - as measured by sales, market share and profits. It is sifting through relevant data for information that discloses what has been, and what is, in order to understand the brand’s business situation. Among the many areas to investigate, and scrutinize, are:
- Key Events that occurred in the marketplace for the current year, and what is expected to occur in the planned year;
- Category/Competitive/Brand Sales Trends
- Segment/Category/Brand Market Share Trends
- Brand Performance versus Plan
- Customer Attitudes and Behaviors
- Penetration and/or Distribution Levels
- Comparative Competitive Product Analysis
- Share of Voice
- Comparative Pricing … among others
The Market Analysis needs to be exhaustive. Sins of omission (what we don’t know) are typically more damaging than sins of commission. So we marketers need to turn over a lot of rocks to unearth true meaning. It doesn’t matter the sector, category or geography in which we market, we undertake the Market Analysis by gathering all and any information that addresses important questions about business performance. The top 20 questions that we need to address, to get the information we need to know, in order to conduct a thorough Market Analysis are:
- What have been the Key Events (include marketplace, regulatory, competitive, etc.) that have impacted and/or are impacting the market and our brand?
- What are Category sales trends in units and value (i.e., dollars, Yuan, euro, whatever your currency)?
- What Segments constitute the Category?
- What are Segment sales and market share trends (we address units and value for all sales related questions)?
- What are Brand sales and market share trends?
- How does this compare with Category and Segment performance?
- What explains the aforementioned development trends?
- How does Brand performance compare with expectations for the year (based upon the Plan)?
- What is the explanation for any variances (positive or negative) versus Plan, and what are we to do about it?
- What is the Brand’s penetration in the absolute and relative to competition? Distribution?
- Who are the key Competitors in the Category and Segment?
- What have been their sales and market share performance?
- How does their performance compare with our Brand’s performance?
- Who is our Target-Customer?
- What are important developments in customer attitudes and/or behaviors?
- How do competitive products compare with our Brand (as perceived by our Target-Customer segment)?
- How is/are our brand, and their brands, positioned in the market?
- What is the comparative Share of Voice (SOV)?
- What is comparative Pricing?
- What else might we examine that explains their and our Brand’s (comparative) marketplace performance, and potential?
There’s a bonus question that needs to be considered, “what issues does management have on their mind?” This is part of any thoughtful Market Analysis.
Addressing the aforementioned questions will provide fodder for developing the SWOT (i.e., brand Strengths and Weaknesses, Market Opportunities and Threats), and, in turn, identifying Critical Success Factors.
Where to Get Answers
The answers to the aforementioned questions can be sourced from many places. Here are some of the places we need to explore:
- Syndicated studies regarding the category, competitors, distribution channels and/or its customers
- Audit services (e.g., Nielsen, IRI) that track category and competitive sales for market share data
- Customer research
- Sales record of our brand
- Proprietary marketing research
- Copy testing such as ASI and Millward-Brown
- Field checks
- Interviews with customers, sales personnel
- Analysis of market tests
- Competitive intelligence (e.g., patents, clinical studies, etc.) … among others.
Number crunching provides data, which yields to information that creates meaning. But, ultimately, we must convert it to knowledge so that we may propose actions that achieve predictable results.
The Market Analysis should lead to a deeper understanding of brand business performance. In order to gain this understanding we need to review trend data, not mere isolated periods. Isolated periods are merely snapshots in time and do not provide the whole picture. Moreover, we need to piece together each piece of the analysis as we would piece together pieces of a puzzle to reveal the complete picture.
Importantly, we need to go beyond the facts of “what” to identify the “why” of performance if we are to portray an accurate picture of brand health and performance potential.
What To Do With It
The Market Analysis should not be a regurgitation of everything you’ve investigated. We need to be choiceful in what we share. In order to be choiceful, we need to take a step back and see the bigger picture. What does it mean? What story is emerging about the brand’s health, performance and prospects? That then is the story that the Market Analysis should tell. Each piece (e.g., slide in a PowerPoint presentation) should make a specific point that lays-out your analysis and supports the conclusions of a compelling story.
BOATS & HELICOPTERS:
1. Gather the relevant data – This will address the 20-questions mentioned earlier. But we also need to anticipate the issues and questions that are on the mind of your management. Finally, be thoughtful in seeking-out data, and ways to conduct analyses, that will provide you with rich insights.
2. Discover the meaning behind the numbers – It’s not what we see but what it means. What explains performance? What does this reveal about the health of the brand and its prospects for the future? Draw conclusions but be careful that they are consistent with the findings.
3. Vet it with team members both serving on, or working in support of, the brand – Certainly we need to tap into marketing research, competitive intelligence and sales personnel – among others – for their assistance in gathering the relevant data and in the interpretation of what it means, and the story it reveals about the brand. Importantly, enlist them in to get at the “why” that explains the “what” of past, current and anticipated future performance.
4. Crystalize your story and employ only the data you need to tell it – Don’t overwhelm management by how exhaustive your investigation and how much data you can throw at them. Instead, impress them with your ability to tell a cogent and compelling story regarding brand performance and potential, and their causal factors.
5. KISS – This acronym stands for “Keep It Simple Stupid.” Don’t overload each of the slides with several points. Nor should you speak to each data point in the slide. Animate the points you wish to make (the findings) with a compelling graph or table that works to connect with management. Please NO more than one graph or table per slide. Your slides should not come across like a three-ring circus (which diffuses focus). Learn to talk to the graph or table you use.
6. Let your story breathe – Put your Market Analysis away for a couple of days and then come back to it before you share it with senior management. Do you have your story right? Is it clear? What questions does it raise? What new analyses does it trigger? Share your Market Analysis with others to get their take on it and note any comments and/or questions they have. The revise as appropriate.
7. Share your story with confidence – If your findings are technically correct and the conclusions are consistent with the findings (which, if you’ve taken the aforementioned steps, they should be), then there’s a high likelihood that your management will appreciate the story for your brand. Arm yourself with back-up slides to cover points that address potential questions management might raise.
Richard Czerniawski and Mike Maloney
© 2003 Brand Development Network (BDN) International. All rights reserved.