To enter and establish itself in a market, it is very important for an organization to study the market trend. The ever changing preference of the customers is one of the most important factors that makes it necessary to know the current trend and the dominant pattern of market and consumers. Apart from observing the consumer behaviour, trend analysis also helps the organization gain insights into market scenario as well as the macroeconomic environment. Surveys and interviews are some of the important tools that help in trend analysis.
Trend analysis involves assessment of the following aspects:
1. Trends in Consumer Needs and Behaviour:
When a business is able to identify a trend in changing needs, wants, and behaviour of the customers, it prepares itself to be in a position to cater to such needs and project higher growth rates.
2. Shifts in Consumer Perception of Value:
Generally an aspect of a product or service tends to lose its value if the companies don’t position them appropriately in the market. This is because there are various competitors in the market who easily replicate the product and position them in the minds of the customers.
For example, Shop A is a departmental store providing an additional service of free home delivery. The shop gains a better position in the minds of the customers because of the additional service provided by the shop. However, if Shop B replicates similar service, there are higher chances that the value of Shop A may get reduced in the minds of the customers.
3. Trends in Industry Cost Drivers:
Companies need to be aware of ongoing trends in their industries. This helps them come in contact with the innovations in the industry that lead to lower cost alternatives. When companies get an option of a cost effective alternative which provides them with some additional features, it can largely contribute in achieving higher objectives and gain a competitive edge over the competitors.
4. Change and Evolution of the Industry:
When the companies are aware of the current trends in the industries, they will be in a better position to understand the innovation needs of the stakeholders., keep an eye on the most demanded features of the competitors and also know about the emerging trends in operation and delivery methods.
As the essence of trend analysis is studying the past market behaviour and making use of the information obtained in projecting future potential; the focus of trend analysis is on collecting relevant data. Trend analysis is thus an important strategic tool that helps an organization to understand about the market maturity, to project future growth potential of the products or services and to analyze the overall position of their company in the market.