Before learning market research, its types and techniques, it is paramount to learn some of the frameworks and matrices used for market research. Let us focus on Porter’s five forces, SWOT analysis, PEST analysis, and Ansoff Matrix in this blog post.
Porter’s Five Forces:
Before entering into a new geography or launching a new product or launching an existing product in a new geography or when it is diversifying, a business firm should carry out a market research to be successful in its business operations. Michael E. Porter developed a simple framework, christened as Porter’s Five Forces, in 1979 to analyze the competitive strength and position of a business firm by involving five forces.
A business firm also does a SWOT (Strength, Weakness, Opportunities, and Threats) analysis, on a periodic basis, to understand how well it is placed and can face external factors. Strengths and weaknesses are internal factors to a business firm while Opportunities and threats are external factors.
As the first step in SWOT analysis, a business firm should list down all Strengths, Weakness, Opportunities, and Threat. Then it should ask the following questions and devise a strategy for each of following questions.
- How can you maximize your opportunities with your strengths?
- How can you thwart or minimize your threats to your strengths?
- How can you hide or minimize your weakness exposure with the opportunities presented to you?
- How can you minimize your weakness exposure in an extremely threatening environment?
A business firm should devise an effective and combative strategy for each of the above questions if it desires to be successful.
Apart from buyer’s need, market dynamics, there are a few factors that also affect your business. So, it is necessary to do a PESTEL analysis. It is a framework where you analyze your business with respect to political, economic, socio-cultural, technological, environmental, and legal factors. These factors may have a bearing on your business in the mid-term and long-term.
It is a matrix of Market and Product.
- When a business firm wants to capture more market share for its existing product, we call it as Market Penetration Strategy.
- When a business firm launches a new product in an existing market, we call it as Product Development Strategy.
- When a business firm ventures into new geography for its existing product line, we call it as Market Development Strategy.
- When a business firm launches a new product in a new geography, we call it as Diversification Strategy.
In a simpler matrix form, it is represented as below:
Last few words:
It is not necessary that a success of a product in one geography need to be successful in any other geography. Each market is unique and different. People’s need, requirement, desirability and preference change with geography.
Don’t look for a buyer for your products and services! Design your products and services to buyer’s need, requirement, desirability, and preference. You will be successful, always!!
If you are an aspiring to be a successful marketer, I recommend you purchase a copy of Marketing Management 15/e Paperback – 2015 by Kotler (Author) and have it in your collections. The tools and technique may change over the period but the fundamentals of marketing will never change. Happy reading!