Product Research Guide: How to Conduct Effective Market Analysis

Product Research Guide 4

Product research is a systematic process designed to collect and analyze information about existing or potential products. This process includes an assessment of market needs, the competitive environment, target users, and the product’s possible functionality and design. The main purpose of product research is to determine whether a product concept is feasible and how to most effectively transform the concept into an actual product that meets market needs. If you have a clear understanding of user needs and user profiles, the next step in product research is to refine and in-depth study the specific directions and possibilities of the product based on these clear needs and profiles.

Through the content of user research, I believe we can accurately locate our target users and products. If you don’t understand the content of user research, you can review this part.

Competitor analysis

Once you’ve identified your product’s positioning, the next step is to differentiate your product from the competition through differentiation research. This means you need to analyze your competitors’ products and services and identify their strengths and weaknesses. Through this analysis, you can find unique value or points of improvement that your product can provide.

These unique values ​​can be multifaceted, such as:

Function: Does your product offer features that your competitors don’t?

design: Does your product design better meet the aesthetic and practical needs of users?

user experience: Is your product easier to use, or provides a more satisfying user experience?

price: Is your pricing strategy more competitive and providing better value?

Serve: Do you provide customer service or after-sales support that goes beyond your competitors?

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Analyzing competitors’ products and services is a key part of product research. It can help you discover market trends, identify your own strengths and weaknesses, and find opportunities for differentiation. Here are some effective methods and steps to conduct competitor analysis:

Ⅰ. Identify competitors

direct competitors: Businesses that provide products or services similar to yours.

indirect competitors: A business that offers a different solution that can replace your product or service.

potential competitors: Enterprises that have not yet entered the market but have the potential to become future competitors.

Ⅱ. Collection of information

1. Public resources: Company website, annual report, press release, industry report, market research, etc.

Finding public sources about a company is an important step in conducting competitor analysis and market research. These resources can provide valuable information to help you understand your competitors’ business models, strategic directions, financial conditions, and market performance. Here are a few ways to find these public resources:

1.1.Company website

About us page: Most company websites have an “About Us” section that provides information such as company history, mission, vision, and core values.

Investor Relations: For public companies, their websites often include an investor relations (IR) area where you can find financial reports, annual reports, quarterly reports, and investor presentations.

Press Releases: The “News” or “Media Center” section of the company’s website regularly publishes the latest company news, product releases, and other important announcements.

1.2. Annual report and financial report

Download directly from the Investor Relations section of the company’s website

Stock exchange website: For listed companies, you can also find financial reports and annual reports on the website of the stock exchange where they are listed.

financial information website: Such as Bloomberg, Yahoo Finance, Google Finance, etc. provide company financial summaries and links to official financial reports.

1.3. Press release

Company website: Find it in the Press Releases section.

news portal: Such as Reuters, Bloomberg, etc., use the company name as a keyword search.

Industry news website: Industry-specific news sites and online magazines often cover news and updates from relevant companies.

1.4. Industry reports and market research

Market research report provider: For example, Statista, IBISWorld, Euromonitor, etc. These platforms provide detailed market analysis reports and may require subscription or purchase.

Industry associations and organizations: Many industry associations publish industry research reports and market trend analyses.

academic database: You can find industry-related academic research and analysis reports on Google Scholar, JSTOR, etc.

1.5.Use search engines: ** Use company name, industry keywords, and words such as “report”, “analysis”, and “annual report” to search to discover publicly released resources and information.

2. Social media and forums: Social media platforms, industry forums, user reviews, etc. can provide users’ opinions and feedback on competitor products.

3. Product experience: Directly experience or use competitors’ products and services in order to understand their strengths and weaknesses from a user perspective.

4.Market research: Use surveys, interviews, etc. to directly learn from target customers what they think of competitor products.

Ⅲ. Analysis of products and services

Analyzing your competitors’ products and services is an important step that can help you better understand the market environment and develop more targeted product strategies and marketing plans.

1. Product functions and features

1.1. Detailed records:Create a table or database detailing the functions and features of each competitor’s product. Including the core functions, additional functions, technical specifications, etc. of the product.

Here is an example table of product analysis for women’s apparel competitors, focusing on core functionality, additional features, technical specifications, design features, and target user groups:

competitorsCore functionsAdditional featuresTechnical specificationsDesign FeaturesTarget user group
BrandXClothing made from eco-friendly materialsrecyclable packagingUse organic cotton and recycled polyesterFashionable and environmentally friendlyYoung consumers with strong environmental awareness
Brand YSmart temperature-controlled clothingUSB charging heatingBuilt-in thermocouple temperature control systemTechnology fashionTech enthusiasts and winter sports enthusiasts
Brand ZWaterproof breathable clothingAnti-UV treatmentMade of Gore-Tex materialOutdoor functionalityOutdoor activities and adventure lovers

1.2.User feedback analysis: Browse product reviews and ratings on Amazon, Google Reviews, social media, and more to see which features are loved or criticized by users.

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1.3. Direct experience: If possible, experience using competitors’ products personally or through team members, and record the highlights and shortcomings found during use.

2.User experience

2.1. User interface (UI) and user experience (UX) evaluation: Evaluate competitor products through professional UI/UX design principles, paying attention to layout, navigation, visual design, interaction design, etc.

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Here is a sample form for a UI and UX evaluation of a competitor women’s clothing website or app:

Competitor websites/appsLayout clarityNavigation ease of usevisual design appealInteraction design effectresponding speedUser feedback collection mechanismOverall user experience rating (1-10)
Website Ahighhighmiddlehighhighhave8
Website Bmiddlehighhighmiddlemiddlenone7
Website Chighmiddlehighhighhighhave9

In UI/UX evaluation, the definition of “high”, “medium”, and “low” is usually based on a series of qualitative and quantitative standards that reflect the performance quality of different aspects of the user interface and user experience. Defining these levels can help evaluators systematically compare the performance of different websites or applications and provide recommendations for improvements. Here are some basic guidelines for defining these levels:

Layout clarity

high: The page layout is clear and logical, allowing users to easily find the information or functionality they need, with no or minimal clutter and distracting elements.

middle: The page layout is generally sound, but some areas may be confusing or take more time to get used to.

Low: The page layout is confusing and lacks logic, making it difficult for users to navigate or find the information they need, resulting in a poor user experience.

Navigation ease of use

high: Navigation is simple and intuitive, users can jump from one place to another quickly and accurately, and navigation elements are consistent across pages.

middle: The navigation generally meets the needs, but there may be some inconsistencies or lack of intuitiveness, causing users to occasionally become confused.

Low: Navigation is complex and unintuitive, making it difficult for users to understand or use, and they often feel lost, which affects the overall user experience.

visual design appeal

high: The design is beautiful and modern, and the use of color, fonts, and images enhances the user experience and leaves a lasting impression.

middle: The design is generally satisfactory, but may lack innovation or the use of certain elements is inconsistent.

Low: The design is outdated or unattractive, using inappropriate colors or fonts, which greatly reduces the user experience.

Interaction design effect

high: Interaction design enables users to complete tasks smoothly, enhances user participation and satisfaction, and provides timely and accurate feedback.

middle: Interaction design supports basic user tasks, but some interactions can cause user confusion or inefficiency.

Low: Interaction design causes user frustration, frequent misoperations, and lack of effective feedback, which negatively affects the user experience.

These definitions should be based on actual user experience and understanding of the target user group. Data and feedback can be collected through user testing, surveys, interviews, etc. to more accurately assess performance in various aspects. In the specific evaluation process, industry best practices and design standards can also be combined to further define specific standards for these levels.

2.2. Usability testing: Usability testing is a process of evaluating the ease of use of a product or service. It involves real users completing specific tasks in a controlled environment, with the goal of identifying problems in design, understanding user experience, and improving the product to meet user needs. Through this kind of testing, valuable feedback can be collected about the product’s usability, user interface design, interaction flow, and user satisfaction. Organize small usability tests, invite members of the target user group to use a competitor’s product, and record their feedback and suggestions for improvement.

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This is an example of a table of results for a hypothetical usability test of a women’s clothing website, including user tasks, problems found, problem severity, and recommended improvements.

User tasksproblem dicoveredseveritySuggest improvements
Find a specific dressSearch function is confusinghighSimplified search options
Add items to shopping cartThe “Add to Cart” button is not obviousmiddleIncrease button size and change color
Bill, pleaseCheckout process takes too longhighSimplify checkout steps
View product detailsLack of detailed product informationLowAdd more photos and detailed description
Navigate to discounted itemsDiscounted parts are hard to findmiddleAdd prominent discounted section links to menus

2.3. Comparative analysis: Compare with your product to identify differences in user experience and potential room for improvement.

3. Pricing strategy

3.1. Overview of pricing models: Record competitors’ pricing strategies, including base prices, discount policies, bundled sales, membership or subscription models, etc.

The following is an example of a pricing model sorting table for women’s clothing brands:

Competitor nameBasic price rangeDiscount policyBundling exampleMembership/subscription model
Brand A¥100-¥50020% holiday discountBuy 2 pieces and get ¥50 offMember monthly coupons
Brand B¥200-¥800New users get an instant discount of ¥100Choose any 3 items and get 10% offSubscribe to the Quarterly Fashion Box
Brand C¥150-¥600Get ¥100 off when spending ¥500 or moreTwo-piece suit special price¥450none

This table outlines the pricing strategies of three hypothetical women’s clothing brands, including their base price ranges, discount policies offered, examples of bundling, and whether a membership or subscription model is offered and what their offers are. Such analysis helps understand pricing trends in the market and competitors’ sales strategies.

3.2. Value comparison: Analyze the value provided behind the price, such as product quality, brand reputation, additional services, etc., and evaluate the fairness of the price.

Below is an example of a value comparison table for women’s clothing brands:

competitorsprice rangeproduct qualitybrand reputationadditional servicesprice fairness evaluation
Brand Ahigh-endHigh-grade fabric, durableHighly knownFree returns and exchanges, personalized consultationhigh value
Brand BMiddleMedium fabric, generally durableWell known locallyLimited returns and exchangesmedium value
Brand Clow endLow cost material, low durabilityemerging brandsNo additional serviceslow value

This table provides a comparison of different women’s clothing brands in terms of price range, product quality, brand reputation, additional services and price fairness evaluation based on these factors. Such analysis helps consumers weigh the value offerings of different brands when making purchase decisions.

3.3. Price elasticity test: Understand target customers’ sensitivity to price changes through market research to help determine the best pricing point for your products.

4. Market positioning

Target customer group analysis: Through research and market data, draw a portrait of your competitors’ target customer groups, including age, gender, geographical location, income level, etc.

The following is an example of target customer group analysis:

competitorsage rangegendergeographical locationIncome level
Brand A18-24 years oldfemalemain citystudents and junior staff
Brand B25-34 years oldfemaleNationwideMid-level staff and professionals
Brand C35-45 years oldfemaleinternationalityhigh income professionals

This table shows three fictional women’s clothing brands targeting customer groups of different ages, genders, geographic locations, and income levels. Such analysis helps to understand how each brand positions its market and products.

Brand information research: Analyze competitors’ brand information, including brand image, slogans, and core value propositions, to understand their market positioning.

The following is an example of a women’s clothing brand brand information survey form:

competitorsBrandslogancore value proposition
BrandXStylish and practical“Wear the real you”Providing high quality and affordable everyday wear
Brand YHigh-end luxury“Luxury, just for the unique you”Exclusive design, focusing on high-end market
Brand Zenvironmental awareness“Dress for the Planet”Promote sustainable fashion and use environmentally friendly materials

This table provides a structured framework for brand information research for women’s clothing brands, helping to understand competitors’ brand images, slogans and core value propositions, and how they position themselves in the market.

Identifying differentiating factors: Identify competitors’ unique positioning and differentiating factors in the target market, and evaluate the positioning opportunities of your own products in the same market.

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5.Marketing and Sales Strategy

Marketing channel analysis: Sort out and analyze the marketing channels used by competitors, such as social media, email marketing, content marketing, offline activities, etc.

The following is an example of a hypothetical table for a women’s clothing brand marketing channel analysis:

competitorssocial mediaemail marketingcontent marketingoffline activity
BrandXInstagram、FacebookHoliday promotional emailsBlogs related to American fashion trendsnew york fashion week
Brand YTwitter、PinterestVIP exclusive offersFashion DIY Tutorial VideoExclusive shopping experience day in Los Angeles
Brand ZLinkedIn、SnapchatNew product release noticeCelebrity Outfitting Cooperation CasesChicago Product Showcase

Promotional activity survey: Record and analyze competitors’ promotional activities, including discounts, limited-time offers, buy one get one free, etc., as well as the frequency and effectiveness of these activities.

The following is an example of a form for a survey on women’s clothing brand promotions:

competitorsPromotion typefrequencyeffect evaluation
Brand ADiscountQuarterlyIncrease sales by 20%
Brand BLimited Time Offerper monthIncrease user engagement by 30%
Brand Cbuy one get one freeannual saleEnhance brand loyalty

Understanding the effectiveness of competitor promotions often involves market research and data analysis. This might include monitoring sales changes, customer traffic, social media campaign engagement, or increases or decreases in brand awareness. Some businesses may make their marketing campaign success stories public, while other information may need to be obtained through industry reports, market research agencies, or social media analytics tools. In addition, customer feedback and reviews are also important sources for evaluating the effectiveness of promotions. Direct sales growth or improved website traffic are the most intuitive performance indicators, but changes in brand loyalty and customer satisfaction are equally important.

Sales method research: Research competitors’ sales methods and processes, such as direct sales, dealers, online sales, etc., and how to increase sales through services.

Here is an example of a hypothetical table for research on sales methods for women’s clothing brands:

competitorssales methodWays to increase sales through services
Brand ADirect sales and online salesProvide personalized recommendations and online consultation
Brand BdealerExcellent after-sales service and loyalty program
Brand COnline + offline storesLimited time promotions and member-only offers

This table shows the sales methods of different women’s clothing brands and how they can increase sales by offering additional services, such as personalized recommendations, loyalty programs or limited-time promotions.

Through the above detailed analysis methods, you can not only gain an in-depth understanding of your competitors’ products and services, but also formulate more precise and targeted product development based on this.

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IV. Assess Strengths and Weaknesses

In business strategy, understanding and evaluating your competitors is crucial. This not only helps you understand your market position, but also reveals potential opportunities and threats. Below, we’ll dive into two key analysis tools: SWOT analysis and comparative analysis.

SWOT analysis

definition: SWOT analysis is a strategic planning tool used to identify and evaluate the Strengths, Weaknesses, Opportunities, and Threats of an organization or project.

Application process

  1. Strengths: These are the internal advantages an organization has over its competitors, such as proprietary technology, brand recognition, market share, customer loyalty, etc.
  2. Weaknesses: Internal factors may limit an organization from reaching its maximum potential, such as resource constraints, inadequate technology, poor market positioning, etc.
  3. Opportunities: External factors can bring possibilities for growth and success to an organization, such as market expansion, consumer trends, technological advancements, etc.
  4. Threats: Factors in the external environment that may pose challenges to the organization, such as increased competition, changes in laws and regulations, economic recession, etc.

Practical application: Through SWOT analysis, organizations can better understand their positioning in the competitive environment and develop corresponding strategies to leverage their strengths, compensate for weaknesses, seize opportunities, and respond to threats.

comparative analysis

definition: Comparative analysis is a method of identifying differences and potential competitive advantages or disadvantages by directly comparing the same aspects of your products and services with those of your competitors.

Implementation steps

  1. Select Comparison Metrics: Price, performance, features, user experience, service quality, etc. are all common comparison indicators.
  2. Data collection: Research competitors’ official information, user reviews, market reports, etc. to obtain accurate comparative data.
  3. Compare: Analyze differences to identify the strengths and weaknesses of your product or service relative to your competitors.
  4. that is sure: Based on the comparison results, formulate strategies to enhance competitive advantages and improve disadvantages.

value: Comparative analysis can help you clarify your competitive position, understand consumer selection criteria, and guide product development, market positioning, and marketing strategies.

By comprehensively using SWOT analysis and comparative analysis, organizations can gain a more comprehensive understanding of the competitive environment and develop more targeted and effective strategies. This not only helps optimize existing strengths and opportunities, but also effectively identifies and responds to potential weaknesses and threats.

Ⅴ. Identify opportunities and threats

To gain a deeper understanding of how to identify opportunities and threats and apply them in competitive analysis, we need to explore the core elements and practical steps of both concepts in detail. In competitive analysis, the correct identification of opportunities and threats is crucial to developing effective business strategies and staying competitive in the market.


Opportunities are conditions or factors in the external environment that can be exploited by an organization for growth and advantage. When identifying opportunities, consider the following:

  1. market gap: Through market research, identify customer needs that are not met by current products or services. These gaps may be in features, price, quality, convenience, etc.
  2. Technological development: The emergence of new technologies often creates new market opportunities. Staying current on the latest technology trends can help you seize these opportunities.
  3. consumer trends: Changes in social and cultural trends can affect consumer behavior and needs. By analyzing these trends, new market opportunities can be foreseen.
  4. Competitor Weaknesses: Analyze competitors’ products, services and market strategies to find out where they fail to adequately meet customer needs or have service deficiencies.


Threats are conditions or factors in the external environment that may affect an organization’s interests or reduce its market share. When identifying threats, here are a few things to note:

  1. competition intensifies: The entry of new competitors or the strengthening of existing competitors may pose a threat to market share.
  2. Changes in consumer demand: Rapid changes in market demand may make a current product or service less desirable.
  3. technological change: Rapid advances in technology may make existing products or services obsolete.
  4. Changes in laws and regulations: New legal or policy changes may impose restrictions or additional costs on business operations.

Practical steps

  1. market research: Conduct regular market research to understand customer needs, competitor status and industry trends.
  2. intelligence gathering: Collect information about competitors, technological developments, laws and regulations, etc.
  3. Analysis and prediction: Use the collected information to analyze and judge possible market changes and predict their impact on the business.
  4. Strategy adjustment: Based on the analysis results of opportunities and threats, adjust business strategies and plans to seize opportunities and respond to threats.

By consistently and systematically identifying opportunities and threats, organizations can more effectively develop strategies to exploit market opportunities while avoiding or reducing the impact of potential threats. This not only helps maintain a competitive advantage but also promotes long-term business growth and success.

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Ⅵ. Develop or adjust strategies

After completing an in-depth analysis of the competitive environment, including assessing your strengths and weaknesses and identifying opportunities and threats, the next step is to develop or adjust strategies to ensure competitive advantage. This stage requires translating the analysis results into practical action plans aimed at improving the product’s market performance, enhancing customer appeal and satisfaction, and achieving business growth. Here are some key steps and suggestions for developing or adjusting your strategy based on the results of your competitive analysis.

1. Product Development Strategy

  • Innovation and differentiation: Based on competitor analysis, identify areas where products or services can be innovative and differentiated. This may involve adding new features, improving the user experience, or adopting new technologies.
  • Customer demand positioning: Ensure product development is closely aligned with market needs and customer preferences. Use customer feedback and market research data to guide product improvements and new product development.
  • Iterate quickly: Adopt agile development methods to quickly iterate products in response to market changes and customer feedback to stay competitive.

2. Market entry strategy

  • Choose the right market: Based on competitive analysis, select the most potential market for entry or expansion, taking into account the distribution of competitors, the intensity and growth of market demand.
  • Cooperation and alliances: Establish strategic alliances with partners, which can be supply chain partners, distributors or other complementary enterprises, to jointly enter new markets or enhance market positions.
  • Enter in stages: Adopt a staged go-to-market strategy, testing products and marketing strategies in small markets before expanding to larger markets.

3. Marketing and Sales Strategy

  • Positioning and brand communication: Clarify the product’s unique selling point (USP) and target customer groups, and strengthen brand communication through targeted marketing activities.
  • multi-channel marketing: Utilize multiple marketing channels (such as social media, content marketing, email marketing, etc.) to increase brand visibility and product awareness.
  • customer relationship management: Establish an effective customer relationship management (CRM) system to continuously track customer feedback and improve customer satisfaction and loyalty.

4. Policy execution and monitoring

  • Clarify goals and targets: Develop clear business goals and key performance indicators (KPIs) to measure the effectiveness of strategy execution.
  • Flexible adjustment: Regularly evaluate and adjust strategies based on market feedback and business performance data to maintain the flexibility and adaptability of strategies.
  • Continuously monitor the competitive environment: Continuously monitor competitors and market changes to discover new opportunities and threats in a timely manner and adjust strategies accordingly.

By translating insights from competitive analysis into concrete strategic actions, you can ensure your products and services more closely align with market needs, effectively differentiate yourself from your competitors, and succeed in a highly competitive market.

Conducting a competitor analysis is an ongoing process that should be repeated regularly to maintain sensitivity and adaptability to market dynamics. This will help you continuously improve your products and strategies to maintain a competitive advantage.

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Let’s take the women’s clothing brand “Zara” as an example to explain how to conduct competitor analysis. Zara is an internationally renowned fashion retail brand known for its rapid response to market changes. For businesses that want to enter or are already in the women’s clothing market, analyzing Zara can provide valuable insights.

1. Identify competitors

In the field of women’s clothing, Zara’s direct competitors include other fast fashion brands such as H&M, Uniqlo and Forever 21. Indirect competitors may include brands that are more high-end or focused on specific styles, such as Michael Kors or Ralph Lauren, as they also cater to women’s clothing needs but differ in price and positioning.

2. Collect information

  • Open source: Visit Zara’s official website and annual report to learn about its business model, new product release frequency and marketing strategy.
  • Social media and forums: Check Zara’s activity on social media, such as Instagram and Facebook, as well as user comments and feedback on fashion forums and blogs.
  • product experience: Visit Zara’s physical store or online store in person to experience the shopping process, product quality and customer service.

3. Analyze products and services

  • Product functions and features: Zara offers a wide range of product lines including daily wear, office wear, evening wear and accessories.
  • user experience: Zara’s store design is modern, the shopping environment is comfortable, the website and mobile application interfaces are friendly, and the shopping process is simple.
  • Pricing Strategy: Zara adopts a mid-price strategy, combined with its rapid fashion updates, to attract fashion consumers looking for cost-effectiveness.
  • Market positioning: Zara is positioned at young consumers who are at the forefront of fashion but seek cost-effectiveness.

4. Assess strengths and weaknesses

  • Advantage: Zara’s biggest advantage lies in its supply chain management and fast fashion model, which enables it to quickly respond to market trends and frequently update products.
  • Disadvantages: Reliance on physical stores results in high costs, and the online shopping experience may not be outstanding compared to some competitors.

5. Identify opportunities and threats

  • Chance: The growth of e-commerce provides Zara with an opportunity to expand its online market share.
  • threaten: Other fast fashion brands may offer more attractive prices or more unique designs in certain areas.

6. Develop or adjust strategies

Based on Zara’s analysis results, if you are a women’s clothing brand, you may consider the following strategies:

  • Strengthen your online sales channels and provide a better e-commerce experience.
  • Focus on offering unique designs or higher quality materials to differentiate your brand.
  • Explore the sustainable fashion space as a strategy to differentiate yourself from Zara and other fast fashion brands.

Through such analysis, you can better position your brand and develop strategies to differentiate yourself from competitors such as Zara.

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Market research

Market research is the process of assessing the size, trends, customer needs, and competitive status of a specific market. This is important for developing effective business strategies, entering new markets, and developing products or services. A comprehensive market research can help companies identify opportunities, optimize product positioning and formulate competitive strategies

Identify market segments

After user research and competitor analysis, we can basically confirm our target market segments. The first step in conducting market research is that we need to identify the target market segment. Choosing segmentation criteria that are suitable for your products and services is key. This will help you identify specific market segments or user groups in your target market. The market can be segmented based on a variety of criteria, including but not limited to:

geographical location: Country, city, region, etc.

Demographic characteristics: Age, gender, income, education level, etc.

psychological characteristics: Interests, values, lifestyle, etc.

Behavioral characteristics: Purchasing habits, frequency of use, brand loyalty, etc.

Taking the women’s clothing market as an example, we can refine the target market segments based on different market segmentation standards. Here is an example table showing how to segment the women’s apparel market using criteria such as geography, demographics, psychographics, and behavioral traits:

Segmentation criteriachilddescribeTarget group characteristicsEstimated market size
geographical locationmetropolitan areaAreas with high flow of people and high consumption levelsWorking women living in big citiesbig
Demographic characteristicsYoung professional women aged 25-34Young women seeking self-expression and career advancement in the workplaceSensitive to fashion and pursuing quality lifemedium to large
psychological characteristicsStrong environmental awarenessPrioritize products with sustainable development and environmentally friendly materialsHave a high degree of recognition of environmental protection and social responsibilitymiddle
Behavioral characteristicsParticipate in frequent social activitiesNeed a variety of clothing to suit different social situationsSeek unique designs and are willing to invest more in special occasion clothingmiddle

Through this table, we can identify several different market segments, each with its own unique needs and characteristics. For example, professional women living in big cities may be more inclined to purchase fashionable and practical business attire, while also paying attention to the quality and design of the clothing. Consumers who have a high awareness of environmental protection may prefer clothing brands made of sustainable materials.

For these different market segments, women’s clothing brands can develop targeted product lines and marketing strategies, such as designing fashionable and professional clothing series for young professional women, and promoting product lines using environmentally friendly materials to attract environmentally conscious consumers. consumer. Through such market segmentation, brands can more accurately locate target customers and meet their specific needs, thereby gaining an advantage in the highly competitive women’s clothing market.

Collect market data

Collecting market data is a crucial step in the market analysis process. It helps companies understand key factors such as market environment, customer needs, and competitive landscape. Through in-depth market data collection, companies can make more informed decisions and develop effective market strategies. Market data is collected primarily through two research methods: secondary research and primary research.

1. Secondary Research (Desktop Research): Use existing data for analysis, which may come from public reports, research papers, industry analyses, news articles, government statistics, etc.

Online databases and reports: Access industry research reports, market analyses, company annual reports, and professional databases such as Statista, IBISWorld, and more.

Industry associations and organizations: Industry association websites often provide information about market trends, statistics, and industry standards. For example, the American Apparel and Footwear Association (AAFA) provides research reports and market trends on the apparel industry.

government resources: Data released by government departments and agencies, such as demographic data, economic indicators, and industry regulations. For example, the U.S. Census Bureau provides demographic data, while the U.S. Bureau of Economic Analysis (BEA) publishes economic reports and indicators.

2. Primary research (field research): Collecting data directly from the source, which involves designing and conducting specific research activities, such as questionnaires, interviews, or focus groups, to obtain specific information.

Questionnaire: Design questionnaires to collect quantitative data from a large number of target market participants, which can be conducted through online survey tools. Design and distribute questionnaires using tools such as SurveyMonkey, Google Forms, or Qualtrics to collect and analyze data.

Depth interviews: Conduct one-on-one interviews with industry experts, target customers, or competitors to gather qualitative data and insights. Select industry experts, prospects, or current customers to interview in person or via video call, using open-ended questions to guide the conversation and gain in-depth information.

focus group: Organize a discussion with a small group of people in your target market to get detailed feedback on a product, service, or market trend. Select 6-10 representatives of the target market to participate in the discussion, led by an experienced moderator, discuss specific products, services or marketing messages, and observe and record feedback.

Analyze market demand

Market demand analysis aims to understand the size of the target market, customer needs and preferences, and trends in demand over time.

Ⅰ. Determine market size and growth potential

1. Total addressable market (TAM): Estimate the potential demand size of the entire market. This includes all customers who may be interested in your product or service. Understanding TAM helps assess the market’s cap potential.

After identifying our target market segments and collecting relevant industry data, we can estimate our total serviceable market. We can mainly estimate through 3 methods:

1.1. Bottom-up analysis

  • single customer value: Calculate the total revenue an average customer brings to your product or service within a certain period.
  • Target customer group: Estimate the total number of potential customers in the target market.
  • Market size estimate: Multiply the single customer value by the total number of potential customers to get TAM.

1.2. Top-down analysis

  • macroeconomic data: Start with macroeconomic indicators to determine the overall size of the entire market.
  • Market share estimates: Estimate the percentage share your product or service can capture in the market.
  • Calculate TAM: Multiply the size of the entire market by the market share you expect to capture to get the TAM.

1.3. Value chain analysis

  • Analyze the value chain: Examine the position and role of your product or service in the entire value chain.
  • Relevant market revenue: Assess the total market revenue directly related to your product or service.
  • market sizing: Based on the role of your product or service in the value chain, adjust relevant market revenue to estimate TAM.

Practical case application

Let’s say your business provides an online education platform that focuses on programming courses. First, define your service scope as the global market. Then, check out industry reports to understand the size of the online education market in general, and the size of the coding course space in particular. Through a bottom-up analysis, calculate the average annual revenue a student brings to your platform (for example, $300 per year), and then multiply it by the size of your target customer base (assuming 5 million potential students worldwide) to arrive at the TAM. Additionally, adjustments can be made to reflect changes in future market potential, given the growth trend in online education.

2. Serviceable Available Market (SAM): It is to evaluate the market size that your product or service can actually serve under specific market conditions. Different from the total serviceable market (TAM), SAM focuses more on the part of the market where your products and services can reach and meet the needs.

After determining the market segments and product positioning, we can obtain the available market through the following analysis.

2.1. Analyze distribution channels: Consider the channels through which your product or service will be sold to your target customers. This includes online channels (such as company websites, e-commerce platforms) and offline channels (such as retail stores, specialty stores).

2.2. Geographic scope: Based on your business model and distribution channels, identify the geographic areas you can serve. This could be a specific city, region, country or group of countries.

2.3. Competitive analysis: Understand which competitors in your target market are already offering similar products or services. Consider factors such as their market share, product quality, brand recognition, and more.

2.4. Calculate SAM: Based on the above analysis, estimate the total demand for your products or services by target customers in the determined geographical scope and market segmentation. This can be done by finding industry reports, market research, or conducting your own market research.

actual case

Let’s say your company sells mid-to-high-end women’s clothing in the United States, primarily targeting professional women aged 25 to 45, through the company’s website and selected retail partners. Considering the limitations of product positioning, target customer groups, and distribution channels, you may determine that SAM is the total demand of this specific customer group in the mid-to-high-end women’s clothing market in the United States. Further analysis may show that, taking into account competitors and market saturation, the market size your brand can actually serve in this segment is 15% of the total size of the segment.

3. Target market share (SOM, Share of Market): It is to evaluate the actual share that your product or service is expected to occupy in the available market (SAM). This metric is critical for setting realistic sales goals and business growth strategies. Here are the steps to determine SOM:

3.1. Assess internal capabilities

  • resources and capabilities: Review your company’s resources, production capabilities, financial status and marketing capabilities, which will directly affect the size of the market share you can obtain.
  • Competitive Advantage: Analyze the advantages of your product or service compared to competitors, including quality, price, innovation, customer service, etc.

3.2. Analyze the competitive environment

  • competitor share: Research the market share and market position of your main competitors in SAM and understand their strengths and weaknesses.
  • market saturation: Assess the maturity and saturation of the market, the difficulty of new entrants into the market, and how much room there is for growth in the market.

3.3. Customer needs and preferences

  • Target customer analysis: Gain a deep understanding of the needs, preferences and purchasing behavior of your target customer groups, especially their satisfaction with existing solutions.
  • Changes in market demand: Track the changing trends of market demand, including technological changes, changes in consumer behavior, socioeconomic factors, etc.

3.4. Marketing strategy

  • Differentiation: Based on competitive analysis and customer needs, develop differentiated marketing strategies to highlight the unique value of your products or services.
  • Pricing Strategy: Determine a pricing strategy that both attracts customers and reflects the value of your product.

3.5. Actual calculation of SOM

  • Quantitative goals: Combine your internal capabilities, market analysis and marketing strategy to set a realistic and achievable market share target. This is usually expressed as a percentage of what you expect to earn in SAM.
  • market feedback: Obtain actual market feedback through market testing or trial sales to further adjust your SOM estimate.

actual case

Suppose you run an online education platform that focuses on providing programming courses to beginners. Through market research, you determined that SAM is the adult online programming education market in the United States, with an estimated market size of US$500 million. Based on your resources, quality of educational content, user experience, and marketing plan, you assess that you can achieve 2% of SAM as your SOM in the initial stage, which is $10 million.

Please note that the determination of SOM needs to consider multiple factors, including the degree of competition in the industry, the degree of differentiation of your products, and market acceptance. In addition, SOM should also be a dynamic target that can be adjusted as market conditions and enterprise capabilities change.

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Product development

After completing product research, the next step should be the product development process. Let’s briefly take a look at the main processes of product development:

Product concept development and testing

concept development: Based on user needs and market segmentation, develop a series of product concepts, including the product’s basic functions, design solutions and expected effects.

concept test: Test different product concepts through questionnaires, interviews, or focus groups to assess target users’ acceptance and preference of these concepts.

Prototyping and user testing

rapid prototyping: Select the product concept with the most potential and create a preliminary prototype, which can be a sample of a physical product or a first version of a software product.

User testing: Invite target users to conduct actual operations and experience tests, and collect feedback to further optimize product design.

Competitive analysis deepens

Feature comparison: Compare your product prototype with existing competing products on the market, paying attention to the differences in product features, performance, price, and user experience.

Positioning confirmation: Make sure your product has a clear competitive positioning in the market, whether that’s cost leadership, product differentiation or focusing on a specific market segment.

Market response and demand verification

small release: Launch your product within a limited scope, either through pre-sale, crowdfunding or limited sale, to verify the actual market demand.

Market feedback collection: Collect market response to the product through sales data, customer reviews and direct feedback, and identify areas for further improvement or adjustment.

Continuous optimization and iteration

Product iteration: Based on user testing and market feedback, continue to optimize product design and functions to enhance user experience.

market adaptability: Regularly evaluate changes in market trends and user needs to ensure that products can adapt to market developments in a timely manner.

Once you have a clear understanding of user needs and user profiles, detailed product research and development through the above steps can help you accurately position your products and ultimately launch products that both meet user needs and are market competitive.

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