Market data and analysis

18.2 The purpose of market analysis

A photo of Alexa Chung wearing a silk scarf might make sales leap, forcing clothes store managers  to focus 100% on how to find extra stocks of scarves. Market analysis should be a cooler, more thoughtful look at the market's longer-term trends. Other clever pieces of market analysis include:

• Danone seeing the opportunity for 'functional foods', such as Activia yoghurt, then putting more money behind these brands than anyone else. It showed huge confidence in its understanding of their market.
• Harvey Nichols seeing the opportunity for a branch in Leeds, in an era when there was plenty of money in the North. When it made the move, other retailers doubted whether Leeds would be posh enough - it was and it is.

These examples have one thing in common: they are the result of careful analysis of trends within a market backed by an ability to take bold decisions.

18.3 Consumer usage and attitudes

Market analysis is rooted in a deep understanding of customers. Why do they buy? Who are the key decision makers, the purchasers or the users? Is the decision a result of child pester power or parental belief in the product's superiority? Knowledge of such subleties is essential. Only then can the firm know whether to focus marketing effort on the parent or the child.

To acquire the necessary knowledge about usade and attitudes, firms adopt several approaches. The…