Business Plan Marketing Analysis

by David Ingram
A marketing analysis sheds light on who a company's customers really are.


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A marketing analysis is an indispensable component of a business plan, and helps entrepreneurs to gain a deeper understanding of the markets in which they plan to do business. The effectiveness of marketing strategies tends to snowball over time as brand awareness and word-of-mouth act as a self-reinforcing cycle. Because of this, marketing initiatives must be well-planned and perfectly executed in early years to help new companies gain a foothold in the marketplace.


The marketing analysis section of your business plan walks you through the process of getting to know your customers and the eccentricities of your specific markets. A thorough and thoughtful marketing analysis proves to lenders and investors that you truly understand the people and groups with whom you plan to do business. This section of the business plan outlines exactly who your customers are, what they want, how they prefer to obtain it and how they use specific products or services. It can also serve to uncover unmet needs in the marketplace that could present profitable opportunities.


According to Pearson CMG, there are five main components of a marketing analysis. The first component is the analysis of customers and the marketplace, as discussed above. Next, a marketing analysis covers pricing strategies for different phases of the company's growth. Promotion and advertising plans lay out exactly how a company will ensure that their marketing messages reach target customers attention. A distribution plan outlines how goods and services will reach target customers once demand is stimulated.

Demand Forecast

A demand forecast—the final component of marketing analysis--serves as the lynchpin for the entire section, informing all other elements of the plan and influencing other business plan sections as well. Demand forecasts influence requirements for first year inventory, which in turn affects staffing and financing needs. Demand forecasts can be tricky to develop for first-year businesses; a good place to start is to analyze existing companies' market share and estimate the effectiveness of your initial marketing efforts at gaining a foothold in the market. Even with highly educated estimates, initial demand forecasts can be inaccurate. Small business owners can estimate demand for subsequent years more accurately by using previous years' data.

Target Marketing

A marketing analysis applies the process of market segmentation to determine one or a few specific target markets upon which to focus marketing initiatives. Markets are generally segmented in four ways. Demographic segmentation separates consumers according to personal factors, such as age, race, education and income. Geographic segmentation considers the physical location of market groups, separating them into regions. Psychographic segmentation separates consumers based on psychological factors such as beliefs, attitudes and perceived needs. Behavioristic segmentation separates consumers based on the ways in which they interact with companies, considering things such as preferred shopping methods, tendency towards brand loyalty and the amount of research performed before purchases.


As invaluable as a marketing analysis may be, it is only one piece of a larger plan. Use the information gained in this section to help craft plans for financial needs, staffing needs, product development and initial strategic plans—the other vital components of a business plan.

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