Market insight

Every business needs to understand their market. The fewer the clients the more important understanding the market becomes.

But what does understanding the market actually mean?

When do we and when don't we understand our market? What is the gold standard for market understanding? If we were consultants tasked with assessing how well a company understood their market, how would we go about it?

One way to think about this problem is to

1. Identify what there is to know about a market 
2. Identify which questions about that market that, if known, would have the biggest impact on the business
3. Identify to which extent there exists clear and consise answers to those questions
4. Identify the quality and quantity of data that exists to validate those answers

We could imagine this list of questions originating from:

• An experienced investor in an attempt to to determine the investability of a venture.
• An entrepreneur in an attempt to determine go-to-market readiness.
• A fractional co-founder attempting to determine where to focus market research efforts

Market analysis is the process of gathering, analyzing, and interpreting data and information about a particular market to understand its characteristics, trends, and dynamics.

The purpose of market analysis is to gain insights into a market's size, growth rate, segmentation, competition, customer behavior, and other relevant factors.

Market analysis typically involves the following steps:

1. Defining the market: Identifying the specific market or industry that is being analyzed, such as the automotive market or the software industry.
2. Gathering data: Collecting data and information about the market, such as market size, growth rate, industry trends, customer behavior, and competition. This may involve conducting surveys, analyzing secondary data sources, and gathering information from industry experts.
3. Analyzing the data: Once the data is collected, it is analyzed to identify patterns, trends, and relationships that provide insights into the market. This analysis may involve statistical techniques, such as regression analysis or trend analysis.
4. Interpreting the results: The insights gained from the analysis are then interpreted to understand the implications for the market, such as identifying opportunities for growth or threats from competition.

Market analysis is an essential tool for businesses and investors looking to make informed decisions about product development, marketing, and investment opportunities. It helps businesses understand the market's characteristics, assess the competition, and identify areas for growth and improvement.

Market insight is the discovery of a relevant, actionable and previously unrealized reality about a target market as the result of deep, subjective data analysis.

This includes insight into market trends, customer behavior, and competition.

Market insight and customer insight are related concepts, but they are not the same thing. The main difference between the two is that market insight focuses on understanding the broader market, while customer insight focuses on understanding individual customers.

Market insight involves analyzing the market as a whole, including trends, competition, and consumer behavior. This information helps organizations identify market opportunities, threats, and gaps that they can capitalize on. Market insight is typically used to inform overall business strategy, marketing campaigns, and product development.

On the other hand, customer insight involves understanding individual customers, their preferences, needs, and behaviors. This information helps organizations tailor their products and services to better meet the needs of their customers. Customer insight is typically used to inform customer experience, product design, and customer service.

In summary, while market insight focuses on the broader market, customer insight focuses on individual customers. Both insights are essential for organizations to develop effective business strategies, marketing campaigns, and product development.

There are several motivations for collecting market insight, including:

1. Identifying market opportunities: By collecting market insights, businesses can identify new market opportunities and customer needs that they can address with their products or services.

2. Mitigating risks: By monitoring market trends and competition, businesses can identify potential risks and threats to their market position and take steps to mitigate them.

3. Understanding customer behavior: By gathering data on customer behavior and preferences, businesses can better understand their target audience and develop products and marketing strategies that are more effective.

4. Improving product development: By analyzing market data, businesses can identify customer needs and preferences and use this information to improve their product development process.

5. Enhancing marketing strategies: By collecting market insights, businesses can develop more effective marketing strategies that are better tailored to their target audience.

6. Staying competitive: By monitoring the competition and market trends, businesses can stay up-to-date on industry developments and make strategic decisions to stay competitive.

By collecting market insights, businesses can avoid pains such as wasted resources, missed opportunities, and ineffective strategies. They can also mitigate risks such as competitive threats, changing customer needs, and market volatility. Additionally, they can gain advantages such as better market positioning, improved product development, and increased customer loyalty and satisfaction.

The consequences of a lack of market insight is wasted time and money.

More specifically, a lack of market insight can cause you to:

• Business
  • Design an invalid business model
• Product development
  • Develop the wrong solutions/processes/products
  • Build features that people are indifferent to
• Marketing
  • Position yourself in the wrong market
  • Position yourself incorrectly within the right market
  • Approach the wrong people
  • Say the wrong thing
  • Say the right thing the wrong way
• Sales
  • Push to acquire the wrong clients
  • Experience heightened friction, complexity, length and cost of sales
  • Charge the wrong amount
• Customer success
  • Inability to retain clients

Use cases for market insight includes:

• Finding new revenue sources
• Ensuring messaging is reaching the precise customers for which it was tailored
• Developing marketing campaigns and pricing strategies
• Measuring current performance against market potential
• Monitoring brand awareness and customer sentiment
• Learning how your target market actually uses your innovation on a daily basis, as well as their thought process during the buying process
• Understanding what draws businesses to purchase from your competitors
• Utilizing previous buying patterns or behaviors to offer customized interactions or predict future actions

https://www.deepstarstrategic.com/hubfs/content/Market%20Research%20and%20Insights%20-%20Mind%20Map%20-%20Deepstar%20Strategic%20-%20v1.1%20-%202023-04-19.pdf

• Conduct in-depth, qualitative interviews with market roles or industry experts
• Conduct qualitative or quantitative surveys
• Collect secondary data sources prepared by the industry or industry stakeholders
• Analyze social media activity and online reviews
• Build a mentor relationship with a market veteran
• Build an intution by operating within the market
• Attend network events with people within the industry
• Talk to people within (or with knowledge of) the market at parties

• Problem relationship
  
  • Victim (someone who personallly experiences emotional, social or financial pains associated with the symptoms of the problem)
  • Contributors (someone who contributes to the problem by not mastering og practicing their job adequately)
  • Exacerbaters (someone who makes the problem worse, more difficult or more unmanageble)
  • Enablers (someone tasked with avoiding that the problem appearing in the first place)
  • Stakeholder (someone who has a stake in the problem and it being unresolved)
  • Accountable (someone who is responsible for the problem being resolved)
  • Analyzer (someone who identifies and analyzes the problem)
• Solution relationship
  • Researchers  (someone who researches possible solution domains and solutions)
  • Strategizer (someone who is responsible for designing a strategy to solve the problem)
  • Influencers/champions (someone who believes in and champions a particular solution)
  • Financieer (someone who is responsible for deciding how much resources to allocate to solving the problem)
  • Decision makers (someone who decides which solution to go for)
  • Implementer (someone who is responsible for establishing the tools and processes to carry out the strategy)
  • User (someone who is expected to use the tools and contribute to the processes)
  • Owner (someone who is responsible for maintaing the tools and processes over time)
  • Support (someone who is responsible for enabling others to get the most out of the tools and processes)
  • Oversight (someone who is responsible for ensuring that the work actually gets done and the problem actually gets solved)
• Influencers (external)
• Believers/cheerleaders
• Audience/fans
• Champions
• Loyalists
• Regulators
• Partners
• Competitors
• Subject matter experts
• Industry experts
• Investors
• Potential employees
• Educational institutions