How to Identify Market Needs (With Steps and Examples)
By Indeed Editorial Team
Published November 12, 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
The demands of a marketplace involve a complex interaction of supply, price, politics, and overall socio-economics. When companies can identify something that the market requires, it provides significant benefits if they can capitalize on that demand. If you plan on a career in marketing, one of the most important things to learn is how to identify these opportunities and approach them for profit. In this article, we provide a step-by-step guide to finding and accommodating market needs, then detail examples of this economic practice for ease of reference.
How to identify market needs
The following steps outline various ways of finding market needs and how to use these opportunities to grow their business:
1. Consider the hiring jobs philosophy
One of the most common approaches to identifying a demand is to consider what that demand actually represents. A Harvard professor developed a paradigm called the jobs be done theory. It postulates that, rather than consumers purchasing a good, they hire the product to perform a job. The strategy focuses on the market in terms of action and results, rather than the products that fill those roles. Consider a factory, where the job is to create boxes. Automation reduces the cost of that job, though it doesn't actually affect the product.
Businesses can employ this philosophy by focusing on simplicity. Most consumer products aim to add ease of function to life. By identifying areas of inefficiency, you find a market requirement. Instead of focusing on the item, maintaining the end goal as a focus usually represents the easiest way to develop a minimum viable product (MVP). These solutions enable you to address a proven demand efficiently by performing a task rather than offering an item for use.
2. Personalize your approach
Whether you work in marketing full time or plan to incorporate these methods in a specific industry, your personal experience provides a unique perspective. By interacting with the market, while still considering its processes, you can gain important insight about what works well and what doesn't. Noting shortcomings in processes, whether corporate, financial, or product-related, gives you the chance to consider ways to meet this demand.
Many entrepreneurs work by connecting two separate products or ideas and creating a new solution that benefits multiple parties. For example, consider a company that sells silica packets to preserve goods. If there is a separate issue with produce spoilage, there is a market opportunity for each company to benefit. Any of the parties involved can initiate this process, including the produce supplier, the silica manufacturer, and the third-party marketer.
3. Conduct diverse research
From digital surveys to mailers and in-person interviews, conducting all types of research is essential. It provides you with a comprehensive understanding of the market, which can allow you to identify niches and isolate your target audiences. Interviews provide companies with valuable information about how the public perceives the market solution. Because of the varying degrees of candour with online versus in-person surveys, it's useful to conduct a wide range of research approaches.
Once the marketer combines the research results, patterns of interest, spending, and more can begin to emerge. Typically, the research begins with a broad audience, isolating its main demographic. Then it follows up with phone interviews to identify strong candidates for focus groups. Other situations include personal interviews to get honest answers from a specific entity. By maintaining open communication with all parties, it's easier to identify flaws in the market that you can use.
4. Identify your competition
For a free market to exist, competition is essential. It's through this desire towards market capture that companies innovate. By observing your competition both locally and within the industry, you can determine its current patterns. Some companies decide to follow the patterns of successful enterprises. For example, when phones became touchscreen, most companies followed suit. Conversely, if an industry focuses on low costs, you can market using a different strategy, such as high quality or natural approaches.
Knowing your competition enables you to make adjustments to your business approaches using relevant information. There are various ways to obtain data about the industry, including personal networking between businesspeople and social media. Statistics Canada releases regular information and different industries conduct independent studies to provide this data. The information provides a point of reference and a valuable market data set to help you interpret your results.
5. Remain observant and agile
One of the cornerstones of the disruptive business strategy is the concept that the jobs to do change with time. As new products emerge, lifestyles change, and priorities adapt, there are new tasks to complete. Identifying market demand involves the ongoing assessment of the industry and its changing requirements. Observing even small differences in things such as cost, number of customers, and other factors in your industry's market, you can react early.
The action you take to address the requirements of a market benefits from agility. Rather than maintaining the status quo approach to your marketing, it allows you to pivot efficiently after you identify the demand. For example, if a 50-year-old company mailed out fliers since its inception, agility is learning to incorporate digital communication. The marketers identify the communication requirement and can use that to help improve sales and overall success.
Example of using marketing demand
The following examples represent different ways companies can use the awareness of a marketing demand to benefit their business:
Here's an example of a need in the market of digital analytics:
Knowing that the clients are present on the site during that time span indicates when the market demand peaks. This provides opportunities for advertorial approaches or lead generation, with efforts that it focuses within that time. A competing online retailer can use this competitor data to identify when consumers make purchases. This proves a demand for commerce and isolates it to specific days of the week and times of the day. The second site compares itself to the competitor and determines that it can capture a portion of that market with strategic targeting.
Here's an example of a need in a localized market:
Jennyville is a small town with a population of 2,000. Its serves a local pulp mill, meaning there are few businesses in the area. Most of the local residents work at the mill or its supporting services. To identify market requirements, the first step it performs is to determine the services available in the area. This includes logical options such as healthcare facilities, recreation options, food services, and trades. After review, they learn that Jennyville lacks a recreation facility and skilled trades. Residents drive half an hour to access the swimming pool and bowling alley.
Concurrently, the demand for an electrician and mechanic in the town is significant. Using this market assessment, the marketer decides to open a company that provides local mechanical and electrical services. The business offers services within a reasonable range to mitigate competition with other tradespeople. Instead of building a recreation center, the marketer decides on a transportation-related service to accomodate recreation. This results in the entrepreneur investing in both the transit and the trades.
Here's an example of how store can determine a market need by researching the interests of their consumers:
Regerton is a store that sells specialty food products. It sources its items internationally and conducts regular research on its customers, including any requests. During the preceding month, a housing development opened in the community that introduced a new demographic. Regerton identifies this demographic by communicating with customers, determining their choice of food, and filling that demand as early as possible. The agile response promotes consumer loyalty and can help capture the target audience before a competitor fills that demand.
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