MARKET ANALYSIS - TIPS AND PRACTICAL EXPERIENCE

Why do you need a market analysis?

Market analysis factsheet

If your company operates in a highly dynamic market with new competitors, changing customer requirements or a high level of innovation, a market analysis can help you to position your company successfully in the market, make targeted use of new opportunities in the market and be prepared for future requirements.

Our factsheet on systematic market analysis shows typical use cases, success factors and common mistakes made in practice:

Market analysis factsheet

What is a market analysis (definition of market analysis)?

What is a market analysis? A market analysis examines a regionally and objectively defined market in a structured manner on the basis of defined evaluation criteria.

The criteria examined are usually general market data such as market volume/market size, growth/market forecast, competitors, their market shares and other market participants, trends or general information on the competition, customers and target groups in the market. The criteria and relevant data are selected during the design phase of the analysis.

Systematic market research is used to make a reliable assessment of a company's strengths and weaknesses as well as opportunities and risks in the market. It can relate to an overall market or a specific market niche and can be carried out by established companies or as part of a start-up.

Market analysis: content and structure (market analysis components)

The adjacent factsheet shows an example of the most important contents of a strategic market analysis: A systematic market analysis evaluates a defined target market with regard to relevant attractiveness criteria such as market size, expected future development, competitive situation, customer requirements and trends in the market.

Eine Markt- und Wettbewerbsanalyse liefert einen strukturierten Überblick zu Chancen und Risiken des Marktes und ermöglicht eine faktenbasierte Bewertung möglicher strategischer Marktbearbeitungsoptionen für das Unternehmen, um langfristig und profitabel im Markt aktiv sein zu können. Sie stellt daher im Idealfall eine Art Kompass der Unternehmensleitung dar, der in einem dynamischen und sich schnell verändernden Markt eine zielsichere Steuerung des Unternehmens ermöglicht.

The advantages of a market analysis - what opportunities does a market analysis offer?

Systematic market analyses are therefore particularly valuable where markets, competitors and customer requirements are changing significantly and dynamically. This change leads to established structures breaking up, new opportunities but also risks arising and therefore reliable information is of particular relevance.

Even if the term "disruption" is certainly overused, the current changes are leaving hardly any industrial company unscathed. Attractive opportunities are currently arising in the following sectors, for example:

The megatrends "Electric", "Autonomous" and "Connected" are changing the value chain in the automotive industry to an unprecedented extent. OEMs and suppliers are reinventing themselves in this dynamic market and must systematically evaluate new technologies and markets and make strategic decisions.

Digitalization and automation of production are leading to new business models in the mechanical engineering market. Mechanical engineering companies are evolving from "hardware suppliers" to "full service providers" with digital business models that combine hardware, software and digital services.

Miniaturization, digitalization and the increasing use of artificial intelligence (AI) are leading to the development of new markets and applications in the constantly growing medical technology market, which offer attractive market opportunities for both established players and new players.

 

A continued increase in the use of renewable energy sources, more decentralization and the intelligent control of consumers are key trends in the energy technology market. Grids are being further expanded in the course of increasing electrification, which is accompanied by high levels of investment in future technologies. This creates attractive market opportunities for innovative companies in future energy technology.

 

THE MOST IMPORTANT QUESTIONS ABOUT MARKET ANALYSIS - AND OUR ANSWERS

A distinction is made between secondary and primary methods of market research/market analysis.

Secondary market research involves evaluating all available information on the target market, company and competitors, customers and customer requirements as well as market developments and trends. Existing market studies, market data from statistics, publications in trade journals, annual reports, press releases and other so-called secondary data are used for this purpose. The advantages of this approach are relatively quick and cost-effective market research results. The disadvantage is that the findings are only based on existing data and, for example, the potential of very new products or services can only be estimated to a limited extent.

The primary methods of market research involve collecting new information on the target market. Various forms of survey or data collection are used for this purpose, examples include interviews (in person, by telephone) or online data collection. These methods are relatively time-consuming and cost-intensive, but make it possible to evaluate a new product idea, e.g. in the context of setting up a company. Specialized market research institutes offer appropriate resources and tools as a service for conducting primary market research.

The aim of a systematic market analysis is to draw a comprehensive, up-to-date and realistic picture of the market under consideration. We are happy to explain these three requirements in detail:

Comprehensive means that all relevant information is included in the analyses. This can include information on market segmentation, market attractiveness, the market position of the competition, competitive advantages, barriers to market entry, market trends, success factors as well as opportunities and risks.

Up-to-date means that the market observation provides data and information that is as new as possible. Ideally, the evaluations should not be older than 1-2 years; especially in very dynamic sectors, the key figures and data on the competition must be up to date.

In this context, realistic means that the analysis of market size and competition in particular is fact-based and not characterized by wishful thinking. In practice, the potential of a market is often overestimated and the competencies of competitors correspondingly underestimated. Only a fact-based, neutral analysis of a business idea or a target market makes it possible to achieve the goal of a realistic assessment.

Der typische Aufbau einer Marktanalyse oder Branchenanalyse sollte strukturiert und systematisch erfolgen. Wir schlagen eine Grundstruktur und Gliederung der Ausarbeitung in sieben zentrale Kapitel vor, wobei die genaue Struktur und der Umfang individuell abhängig von der Zielsetzung und Ausgangssituation sind:

(1) An initial explanation of the objectives/relevant questions and the methods and sources used in the investigation

(2) A clear presentation of the market segmentation or definition of the relevant segments and markets (regional, factual)

(3) Information on market size, market volume, market growth and market potential

(4) Competitor analysis: Analysis of competition, key figures of competitors, solutions (products and services) and success factors of competitors and rivals, marketing strategies. Derivation of strengths and weaknesses.

(5) Customer analysis and analysis of the target group/customers, customer behavior and brand loyalty. Derivation of market entry barriers in the industry.

(6) Marketing planning, marketing channels, role of different media/marketing measures, marketing costs

(7) Overall assessment and implications for your own company. If necessary, derivation of the sales plan or business plan, possible partners for market entry, required internal resources. Determination of the next steps.

A clear distinction must be made here between the B2C and B2B markets:

In the B2C (business to consumer, end customer products) sector, extensive market data and market analyses are often available "out of the drawer", either free of charge or for a fee. These can be researched via market research portals or are also offered directly online by the providers.

In contrast, in the B2B sector (business to business, business customer markets), there are often only a few directly available "off the shelf" studies. Here, the market size, the market potential, important market developments, data on market share or sales of the competition or insights into the target group can only be obtained through an individual market analysis. This is created for your industry and your products and enables you to find out your individual goals, questions and the information relevant to you in the best possible way.

If you would like to have an individual market analysis prepared, we look forward to hearing from you.

If you want to carry out a market analysis, you first need two things:

(1) Sufficient time resources: Sufficient time must be planned in order to be able to reliably analyze a sales market. Depending on the experience of the person/team carrying out the analysis and the market analysis tools available, several weeks of focused working time should be planned for researching and preparing the information.

(2) Knowledge of sources and procedures: In order to successfully produce meaningful market research, the researcher should have sufficient knowledge of the key data sources for the areas under investigation. This includes, for example, the most important databases, trade journals or industry trade fairs in the target market. In demanding markets, niches and technical industries, access to data for a fee is often necessary for a reliable study. It is also helpful to have methodical experience in the evaluation of target groups, market development, potential and trends.

If sufficient time and technical capacity is not available, specialized agencies such as MEYER INDUSTRY RESEARCH provide support in the preparation of systematic market studies. Thanks to their experience in many similar tasks, these agencies can also help to better evaluate the results of market research and derive the right conclusions and implications for action from the data.

A systematic market analysis can be carried out both internally and with external support. If the analysis is to be outsourced, we recommend checking the following criteria when selecting a partner:

(1) Industry experience and customers/references in the industry

How much experience does the partner have in the relevant market segment and how advanced is its level of knowledge/awareness of the prevailing general market conditions? What possibilities/access to data sources and databases does the company offer?

(2) Foundation of the company (many years of experience) and background of the founders

How competent is the project leadership and management team? What background and wealth of experience do the external partners have?

(3) Customer service and offer

What products and solutions does the partner offer? What is the processing time? What are the costs of the service? Are individual steps in the project coordinated with the client?

MEYER INDUSTRY RESEARCH will be happy to support you with your individual market analysis and prepare a customized offer for your task.

The costs of a market analysis depend very much on factors such as scope, regional focus, the content examined and other circumstances. Typically, the budgets required for professional market analyses range between EUR 5 and 50 thousand net. MEYER INDUSTRY RESEARCH will be happy to provide you with a customized quote. There are funding opportunities for start-ups, e.g. via the EXIST/ ZIM or LIB funding programs.

HOW TO CREATE A MARKET ANALYSIS (market analysis procedure)

The possibilities for obtaining strategically relevant information have improved considerably over the past decade. The amount of available information on markets and companies has grown exponentially. Search engines, databases and evaluation tools have improved significantly, so that experienced analysts now have options at their disposal that were unimaginable 10 years ago.

Nevertheless, there are still some limitations in practice when it comes to obtaining market and company information for systematic market analysis:

In very new markets ("first movers") and in markets with a particular niche character, there is still relatively little reliable information, statistics, data and forecasts available from secondary sources. Even the best research tools can only draw on a very limited pool of information in certain subject areas.

In these cases, the assessment of market experts and market participants plays a special role, e.g. through the inclusion of expert interviews. Experts can be market participants as well as representatives of universities, associations or chambers of industry and commerce. Primary research provides more in-depth and reliable information on the market than secondary analysis alone. The interview partners can, for example, provide assessments of the market size, market development, market shares, market potential, technical specifications of products from other manufacturers, potential customers or target groups, the development of demand or an assessment of the position in the market.

The disclosure obligations of market participants and companies vary greatly depending on the country, size structure and legal form of the company. The level of detail and scope of published company information has tended to move sideways at best over the past ten years. As a result, competitors, for example, are not always fully transparent via secondary sources and certain "workarounds" are required to evaluate these companies and the market.

In order to be able to reliably assess the strengths and weaknesses of relatively opaque companies, data from various sources is required. One solution here is professional global company databases and paid tools. They also serve to verify and assure the quality of data that has already been collected, as public sources and ready-made market studies unfortunately contain a lot of false information about companies and the market.

Relevant information is "scattered" in a wide variety of data sources, especially in technical markets, some of which require paid access or have high access barriers (databases, trade journals, etc.). In some markets, this results in a relatively high expenditure of time for researching, compiling and analyzing market information. A professional service provider with the necessary access to the market promises success here. They can help to obtain the required market data quickly and efficiently. In addition, an external service provider such as MEYER INDUSTRY RESEARCH can help customers to approach the next steps in the analysis in a structured manner.

Shocks and crises, such as the coronavirus pandemic or the Russian war of aggression in Ukraine, cannot be predicted even by the best study. However, these can have a significant impact on the market, the companies in the sector (customers and competitors), sales markets, market potential and market growth for a forecast period. These limits must be taken into account in advance when planning a strategic market study and communicated openly. Even today, strategic market analysis cannot be a crystal ball, but it can be a useful tool for systematically preparing entrepreneurial decisions in a dynamic market.

CARRY OUT A MARKET ANALYSIS OR TRUST YOUR GUT FEELING?

Tilmann Betsch, Professor of Social, Organizational and Business Psychology at the University of Erfurt, says:

“In Situationen, in denen wir sehr gute Erfahrungen haben, können wir uns auch gut auf unsere Gefühle verlassen. Solange Intuition viele stichhaltige Informationen als Grundlage hat, führt sie wahrscheinlich in die richtige Richtung. Wenn sich die Umstände ändern und die Dinge vom Gewohnten abweichen, können intuitive Entscheidungen hingegen eher in die Irre führen.“

In new and dynamic constellations, a systematic analysis of a market is the basis for important decisions for entrepreneurs, strategic decisions in product development, sales and marketing as well as for larger investments such as a planned market entry.

Continuous and consistent market observation, ideally taking into account the target market and including a competitive analysis, is an essential basis for entrepreneurial success. This is the only way to recognize target group movements, for example in the direction of a new technology, at an early stage. Knowledge of the target market is also the basis for targeted marketing activities. Long-term market observation can also reveal shifts in market potential within the industry and countermeasures or solutions can be developed at an early stage. These are just a few examples of how business policy benefits from the information provided by a structured market analysis.

PREPARE A MARKET ANALYSIS YOURSELF OR HAVE IT CARRIED OUT BY EXPERTS?

  • If experienced employees and sufficient time are available in your own company, a market and competition analysis can generally also be carried out by your own staff with good planning.
  • Cooperation with specialized market research companies such as MEYER INDUSTRY RESEARCH is particularly recommended when it comes to important decisions of strategic relevance for the company or high investment volumes associated with the issue under investigation.
  • Auch für Gründer, die mit ihrer Geschäftsidee den nächsten Schritt gehen wollen, bietet es sich an, die Analyse extern durchführen zu lassen, um die “Bias”, also die Gefahr, den Markt ausschließlich durch die eigene Brille zu sehen, zu vermeiden. Dies ist insbesondere in Märkten mit geringer Markttransparenz von Bedeutung.

Depending on whether the main intention of the study is the development and expansion of your own brand, the definition of target groups, questions regarding competition, the determination of developments, trends and market shares or the procurement of capital, the content of the analysis can vary accordingly. The time and effort required remain comparatively low due to the targeted processing of the focused topic. MEYER INDUSTRY RESEARCH offers customized, cost-efficient solutions especially for start-ups.

REFERENCES OF OUR MARKET ANALYSIS AGENCY

Geschäftsführer, Vertriebsleiter, Strategie- und Business Development-Verantwortliche bei mehr als 100 Kundenunternehmen vertrauen auf unsere akribischen Marktanalysen aus einem zentralen Grund: Der kompromisslosen Qualität und Belastbarkeit der Ergebnisse unserer Marktforschung. Unsere anspruchsvollen Kunden schätzen zudem die persönliche und offene Zusammenarbeit mit unserem Team für professionelle Marktforschung in München und bringen dies in zahlreichen Referenzen zum Ausdruck – bitte verschaffen Sie sich selbst einen Eindruck.

More references

WE ARE YOUR PARTNER FOR SUCCESSFUL MARKET ANALYSIS

“Die Marktanalyse bzw. systematische Marktanalyse im Industriebereich ist ein zentraler Bestandteil der strategischen Unternehmensführung und Grundlage fundierter Entscheidungen über Produkte, Dienstleistungen und Geschäftsentwicklungen. Sie liefert belastbare Informationen über Marktstrukturen, Marktpotenzial, Marktentwicklung, Bezugsmärkten, globalen Trends und Trends im Wirtschaftszweig sowie die Zielgruppe, die Entwicklung der Nachfrage und Position des Wettbewerbs.

More and more companies, including in the industrial sector, are recognizing that comprehensive market analysis is essential in order to be successful in increasingly competitive markets. It enables companies to identify opportunities, minimize risks, determine customer needs and thus assert themselves against the competition in the long term.

Gerne sind wir Ihr Partner bei der Durchführung Ihrer erfolgreichen Marktanalyse!”

INDIVIDUAL CONSULTING FOR YOUR COMPANY ANALYSIS

Trustful personal cooperation and the high quality and resilience of our analyses are top priorities at MEYER INDUSTRY RESEARCH.

 Gerne beraten wir Sie im Vorfeld einer möglichen Zusammenarbeit bei einer Marktstudie intensiv und unverbindlich, auf Wunsch auch bei einem persönlichen Termin bei Ihnen vor Ort. Wir freuen uns auf Ihre Anfrage und erstellen Ihnen gerne Ihr individuelles Angebot!

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