In the modern corporate world, understanding the difference between market research and market analysis is crucial for businesses looking to thrive. Despite their importance, these terms are often used interchangeably, leading to confusion. However, both market research and market analysis are central elements for any business aiming to succeed in current and future markets. This blog aims to clarify these concepts, helping you leverage their unique benefits effectively.
Overview:
- Market research provides a broad understanding of markets from a high-level, non-specific perspective.
- Market analysis offers a targeted understanding of how specific companies can interact with the market to exploit opportunities and defend against threats.
- Market research prompts companies to consider strategic questions, such as ‘How can we leverage the trend of increased activity in X to boost our revenue?’
- Market analysis delivers actionable insights, guiding decisions in areas like mergers and acquisitions, new product development, channel strategy, and portfolio management
– A business acting in a market without market research risks missing crucial trends or overall market movements (not seeing the bigger picture)
– A business acting in a market without market analysis risks missing the nuance of their relationship to market trends, meaning actions have little market impact
Market Research Unpicked
Market research is all about the big picture. It provides insights into trends, overall market sizes, the biggest players, and growth rates. These insights are often captured on an ongoing basis and presented clearly, allowing people across various companies, seniority levels, and experience levels to engage with the information.
The value of market research lies in the comprehensive view it provides, highlighting the topics and trends that are top of mind for most market participants. The focus here is on the aggregate market, often supported by large volumes of data from surveys and other sources, such as shopper data.
Market research tends to be more cost-effective than market analysis because it is typically less bespoke and conducted in less depth, allowing it to be carried out at a lower cost per client. Often, all players in a market will use the same reports.
In the FMCG context, providers like Euromonitor, Kantar, and Mintel are widely used by the biggest players. Other major market research providers include NielsenIQ, Gartner, Forrester, Ipsos, Dynata, YouGov, and Savanta, along with a large market of smaller digital providers like GWI and Streetbees, and insights agencies such as Kadence International.
Fundamentally, good market research stimulates questions for a company to ask themselves.
For example, a major market research agency might release a quarterly report highlighting a trend towards businesses cutting their spending on software for accounting and job management. This could lead to questions such as:
– For a business selling accounting software to small US construction firms: “Are we going to lose revenue? Are there small businesses in other sectors who will still spend more? Do we need to expand into other geographies?”
– For a bank offering credit to small US firms: “Could we make a service for clients that fills potential gaps in their cash management if they stop using accounting software? Would our clients consider getting that service through us?”
Some of these questions can be answered robustly with internal market knowledge, but sometimes external support is needed to ensure a comprehensive understanding.
Market Analysis Unpicked
While market research is generic, market analysis is inherently specific. It takes the perspectives of key stakeholders and analyses the market through the lens of what matters to a particular company. This approach provides market analysis strategies that lead to actions like M&A, new product development, and portfolio management. By focusing on the unique challenges and opportunities faced by a business, market analysis delivers tailored solutions that drive growth and competitive advantage.
The value of market analysis lies in its actionability and robustness. It offers answers and strategies tailored to a company’s unique challenges and opportunities, ensuring informed decision-making. For instance, a business considering expansion into a new market can use market analysis to assess the competitive landscape, identify potential barriers, and develop a strategic entry plan.
Market analysis is typically conducted by strategy consultancies, including major players like MBB (McKinsey, Bain, BCG) and boutique specialists like White Space Strategy and Palladium Digital. These firms provide bespoke services that are more in-depth and tailored than standard market research, offering insights that are directly applicable to a company’s strategic goals. Explore more about the consulting landscape and discover how to choose the right consultancy for your needs in our detailed blog.
Understanding Market Research and Analysis
Knowing the difference between market research and market analysis is essential for businesses to leverage both effectively. While market research helps companies stay abreast of trends, market analysis enables them to exploit opportunities when they appear. Together, they form a comprehensive approach to understanding and navigating the market landscape.
By integrating both market research insights and market analysis strategies, businesses can ensure that they are well-equipped to exploit opportunities and mitigate threats. Whether you’re looking to enter a new market, develop innovative products, or enhance your competitive position, understanding these tools is key to achieving your objectives.
In conclusion, the difference between market research and market analysis lies in their scope and application. By recognising and utilising their distinct advantages, businesses can position themselves for long-term success in an ever-evolving market environment.
If you’re looking for a partner to support with market analysis, White Space Strategy can help. We regularly analyse markets for B2B organisations of all sizes in the UK, Europe and USA. Get in touch with us today and see how we can support you