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Imagine that the first cell phone has just been released. People are excited and confused by the idea of carrying a phone outside of their home. Few people have cell phones, and some are uncertain that they will become popular. Fast forward 20 years and the streets are dominated by cell phones. A couple years later, the smartphone takes over.
Take a look around you today, there are smartphones, tablets, and even watches that allow you to make phone calls. This change in the communication market is an excellent example of a market trend. A market trend is anything that alters the market your company operates in.
In order to keep your company ahead of the competition, it is important to utilize market trend analysis, or the process of evaluating changes to your market. Market trend analysis looks at how your industry started in the market, how it has grown, and where it is expected to go. For example, how cell phones first come about, how their popularity changed, and how manufacturers and retailers expect the market to change.
In market trend analysis you will want to look at several trends relevant to your organization. Consider the phone industry. The market trends in technology, changes to customer needs, and communication trends are likely important trends to analyze. Other market trends that may be important or influential to your business include changes to your market demographics and changes in the economy
If you only look at technology, you might miss important information on customer needs and interests. Also, if you only look at the economy, you might not be considering the trends that are relevant and important for your business. Each trend will affect your organization in various ways so you want to be sure to look at the trends that are relevant, and consider more than one trend. Let's look at three trends up close and see how they can affect your business.
When you conduct a market trend analysis you want to consider the needs and interests of your consumers. For example, as technology advanced, so did cell phones. As cell phones advanced, so did the needs and interests of the customers. On the other hand, if you don't continue to meet the needs and interests of your customers, you will be left in the dust as they move on to the products they desire.
Consider that the cell phone is now used for email, Facebook, Skype, and various other methods of communication. Because of these market changes, the phone industry is constantly looking for new ways to meet the needs and interests of their consumers. Phones are becoming smaller and easier to carry, they now have cameras, alarms, schedule books, and some are even able to turn the lights off in your home.
Market analysis allows the phone industry to understand the psyche of their consumers, and thus, they are able to make the phone fit the daily needs and interests of the people who want to buy the products. Leave the oven on at home? No problem, your cell phone can turn it off! By analyzing the current and future needs and interests of your customers, you can ensure your products and services are cutting edge.
Technology changes can be extremely important to any market you operate in. If you are in the phone business, the development of glass technology, waterproof technology, Internet, and camera technology are all important to your industry. However, even if you sell coffee, the harvesting, transportation, and roasting of the coffee can be influenced by technology. In accounting, advanced computer systems via technology affect your daily operations. Even if you are a chef, technology can influence how you cook your foods.
As you can tell, technological changes are extremely important when it comes to analyzing market trends. What is the next big thing consumers are looking for, and how can technology meet that need? Take a look at your cell phone. What did your first cell phone look like? How is this one different? Can you imagine what your next phone might look like? Smaller? Wider? Better pictures? More sound? Faster?
All of these characteristics are related to technology and your business will need to know how technological changes are relevant to its operations and sales. More importantly, if you don't pay attention to changes in technology, your competitors will. The analysis of technology helps you meet the needs of your customers, and can help you to stay competitive by creating the next big thing, or simply by offering your products and service more effectively than your competitors.
In order to keep your products and services competitive and meet the interests of your local market, you will want to keep an eye on changes in market demographics. Who are you selling your products to? Who lives in your market area? Consider that cell phones were first sold to people with a lot of money or business professionals. The technology was not advanced enough to produce mobile phones that were available for every economic class. As technology advanced, and as customer needs and interests advanced, so did the market demographics.
When the market demographics for cell phones changed from mostly professionals to a wider variety of individuals, the features of the phones were altered to meet this new need. Now, there are savvy professional phones. There are phones with parent controls, others that come in fun colors. There are even some phones even have child safety options that only allow children to call specific numbers. Keeping tabs on your market demographic can help your organization identify potential changes in customer needs or interests.
Market trend analysis allows you to identify potential changes to your market as well as ways that your company can stay ahead of competitors. By identifying current and potential changes in customers' needs and wants, your company can look for innovative or new ways of providing its products and services. In market trend analysis, you are looking at where the market started, where it has been, and where you expect it to go. Analyzing your market trends will help your company stay informed on the relevancy of your industry and help you identify methods for staying relevant as the market goes through various changes.
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Back To CourseBusiness Analysis Training
6 chapters | 55 lessons
Next LessonTarget Market Analysis: Definition & Examples