What are the Market Analysis Levels? (Here Are The Facts!)

You cannot start any business without analyzing and evaluating the market. Expertise facilitates the analysis process by dividing it into several levels called market analysis levels.

Market analysis Levels are the aspects related to the market and the elements that influence it. These elements are arranged in different levels based on their relationship to each other. These levels must be analyzed to find out the feasibility of investing and working in the target market. 

They are four primary market analysis levels:

  • The international level
  • The regional level
  • The local levle
  • The internal market factors levle

Market analysis is vital for any business, and by using a market analysis levels model, you will analyze the market from many different aspects. This article explains in detail these aspects and how to deal with them. Let’s start

International level of market analysis

In general, products are affected by the international environment in one way or another. For example, raw material sources, importing, international relations, and agreements and their influences.

The international level of market analysis is the international factors affecting your business or product. Among these factors are the increase in international demand and supply, obstacles and facilities for accessing global markets and importing raw materials, and wars and international crises.

It is worth noting that this level of market analysis cannot be influenced or changed. Because it is outside the control of companies, it is studied and analyzed to reduce its impact and take advantage of the opportunities available.

For example: If you want to invest in the automotive industry, and through the international analysis of the market, you recognize that the global trend in the next ten years is to dispense with cars that use gasoline as fuel and turn to the use of electric cars. This information will change the type of your investment so that it is not affected by global changes shortly.

Due to the impossibility of changing this level of analysis, we will not expand our study further.

Regional level of market analysis

The regional level means the neighboring countries of the country in which your business is. 

The regional level of market analysis studies the political, economic, and geographic variables and conditions of neighboring and relatively close countries to the country in which you wish to invest. 

Examples of these circumstances are whether you can exploit the neighboring countries as a source of raw materials or a market for the distribution of products. 

Are there customs agreements between the region’s countries that you can use to reduce the industry’s cost? Like this question, you need to ask.

The regional level of market analysis is similar to the international level. But, we consider it a different level of market analysis because of the significant and direct impact of changes in the region and neighboring countries on your industry and investment.

The local level of market analysis

The country in which your business is located has a direct impact on your investment.

The local market analysis level refers to the factors related to the country where you located your business. These factors highly affect your business. Examples of these factors are interest rate, taxes, inflation, availability of employment, availability of energy sources, laws and regulations, political and security stability.

There is no doubt that any business deals directly with the conditions of the host country. And this country has a direct influence on it. 

Therefore, studying this level is of great importance before starting an investment in any country.

Before starting any business, you should ask yourself the following questions:

  1. Are raw materials available in this country, or can they be imported easily?
  2. What are the laws and regulations that affect your project or business?
  3. Are there workers that have relevant skills for your business?
  4. Does the income level of this country allow the people to buy your products, or do you need to export your product abroad?
  5. Is there a restriction on the transfer of funds to and from this country?
  6. Is the political and security situation stable, or is there some anxiety from time to time?

And many similar questions that you must answer before you fret and put a penny in any country. 

Many investments were wasting their money when they neglected this level of analysis.

The internal level of market analysis 

After reassuring the analysis and information at the other levels, the role of analyzing market variables comes.

Internal Market analysis refers to the study and analysis of the internal market factors, such as customer segments, competitors, substitute goods, suppliers, the technology used in the industry, and everything related to detailing the internal market.

It is noteworthy that the analysis of internal market analysis is the primary variable that your company can influence, unlike the other levels.

Therefore, many companies, especially small-business and local dependent businesses, focus on studying these local variables and may neglect the study of other analytical levels of the market. Therefore, we will study these levels in more detail than others.

internal market analysis level factors

The internal market level has many factors that influence your business; you need to analyze them. here we will explain some of them in more details

customers

The way you are selecting and reaching your target audience can help maintain or increase your profits.

While it sounds obvious, it’s not as easy as you think. Your customers are scattered among the millions of people who are not your target market. 

If you think, introduce your product or service and hope that your target audience will see it; this is a waste of time and money.

You need to use the marketing approach that is used with many traditional marketing channels. 

Analyze the market audience, segment the market, select a suitable segment that you can serve; this is how things are done. 

Your target segment analysis should include who, what, when, where, why, and how you will sell your product. Collect all this information and well evaluate and test all the situations. 

For more information, you can refer to the Marketing Activities Categories and Marketing Activities Definition articles.

Here’s how we break down those different components of target market research:

  1. “Who” is your potential customer? To know them, you need to describe them fully by age group, gender, occupation, education, and any other description that defines those segments.
  2. “What” are the motivating factors that inspire this audience and target segment. These may be their interests, values, hobbies, and general needs. When defining “what,” you should also include aspects of your product or service that might interact with that motivation. You can do this by identifying the problem that your product or service can solve.
  3. “When” is the period during which they are likely to purchase your product or service. It could be a specific time such as a month or a week.
  4. A “location” includes the geographic location of their home and work as well as information about that area, such as population, climate, average income, and economic health.
  5. The “reason” specifies why this audience and target segment might decide to buy from you versus a competitor. Therefore, this aspect of the target market includes competitor analysis.
  6. “How” analyzes how your customers behave, including their lifestyle choices and purchasing habits.

Some actions that help you to know and reach your customers: 

  1. Run social media ads.
  2. Use the many resources available online to get an analysis of your target customer segment.
  3. Track your competitors’ actions by focusing on their marketing sites, pricing and reviews, and customer conversations on social media.
  4. Perform an initial search by going directly to the sections you want to analyze. Tactics include surveys, interviews, online focus groups, and more.

The competition

Competitive analysis is a way to identify competitors and understand your competitors’ strengths and weaknesses. And helps you measure how to rein in competitors and improve your strategy.

Why competition analysis is essential:

There is no doubt on the importance of the competitive analysis process. Here we will list how this process helps businesses:

  1. Understand how your current and potential customers evaluate the competition.
  2. Allow you to build a mechanism for developing effective competitive strategies in the target market.
  3. Let you force on your company an advantage over its competitors. 
  4. Help you to build strategies for how to expand into a new market.

Here are some points that help you to analyze the competition in the market:

  1. What is the full range of products and services they offer?
  2. Are their products or services aimed at meeting similar target markets?
  3. Are my competitors winning, expanding, or shrinking?
  4. What are their marketing and promotional strategies?
  5. What are its positive and negative features in the eyes of customers?

After you have collected all the information about your competitors, you need to ask yourself the following questions:

  1. Do I have a competitive advantage? If so, what is it?
  2. How do existing customers rate my business compared to the competition?
  3. How can I differentiate my company from my competitors?

Finally, there are many other factors you have to analyze in your market before starting any business, such as material suppliers, workforce, etc.

Conclusion

Market analysis Levels are the aspects related to the market and the components that influence it. These elements are arranged in different levels based on their relationship to each other. These levels must be analyzed to find out the feasibility of investing and working in the target market. 

They are four primary market analysis levels:

  • The international 
  • The regional 
  • The local 
  • The internal market factors

Each of the mentioned levels is concerned with studying a particular aspect that influences your business. So you have to analyze market levels before investing your money.


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