Comparative Market Analysis (CMA) is a research to quantify the differences and similarities between two products or services in the same market domain. It also checks how unique a product and/or service is and how it is related to other similar products. Small businesses undertake CMA to collect data so that they can set their marketing objectives and plan future strategies for higher profits.
What data is required for CMA
There is some information that needs to be collected prior to carrying out a proper comparative market research. To make the exercise worthwhile, besides the description of your industry, size, growth charts, product life cycles, unusual characteristics, etc. the data should include:
- Size of the current market base,
- Age group of the usual customers,
- Geographical area of the market,
- Seasons when sales are the highest or lowest,
- Pricing methods,
- Do you have plans for globalization,
- Do you have sufficient infrastructure to cope with higher demand,
- If not, what are your expansion plans,
- Your annual targeted gross margins,
- The annual volume of sales over the last 5-10 years.
Data analyzed through CMA
Now that you have sufficient fundamental data CMA process will use this information to create a growth chart for your company’s products and services and studying the trends in the relevant industry. Then, a forecasted growth chart is generated. The methodology of CMA is very scientific so the information collected and analyzed is very precise and accurate. Factors like demand, supply, number of players in the market, pricing in the industry, and other variables for similar products in the market are compared. So it gives a fair picture of redundancies and inter-dependencies in the industry.
Another aspect of the CMA exercise is your company’s market share. This quantifies the percentage of customers for your brand as compared to similar products or services in the market. How much tug-of-war has taken place between you and your competitors over a period of time?
CMA will provide you data on your company’s strengths and weakness too. If certain marketing tools or ideas are not working, the study will highlight the lacunas so that you can make the necessary modifications. Since the analysis compares your company with your competitors, you are able to gauge their strengths as well. You can now plan your marketing to overcome these. You can also take steps to capitalize on their weaknesses.
If you are a new entrant for a particular product or service CMA will highlight the obstacles you may face. It will also provide doors of opportunity that you can knock on to make your venture a success. It will point out the secondary allies that may indirectly support your efforts. CMA studies will also show indirect adversaries that may restrain your plans like shortage of skilled manpower, change in technological methods, unprecedented rise in raw material costs, etc. over a period of years.
A very crucial part of Comparative Market Analysis also pertains to how governmental regulations affect your industry as a whole, and you as a company. The data collected will include expense towards compliance and whether changes in regulations have imposed an additional burden on your operational costs.
One of the most important qualities of CMA is that fresh data is collected for each client organization. Of course, the data is collected, tabulated, classified, quantified, interpreted and analyzed against a common benchmark so that the results are accurate for each company belonging to the same industry. Thus, Comparative Market Analysis can be very useful for a small business that is looking forward towards globalization and brand creation.
Andrea Walters, a freelance writer for www.satellitesales.com – The Lowest-Priced Satellite TV in America. dish network
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Iliana Lola is a full time internet marketer and writer and the owner of Ilianalola.com.