Objectives of market analysis
Market analysis is a diagnostic process to uncover the root causes and not just the symptoms of why markets under perform for poor people. A thorough market analysis will help you understand how the market operates and how it affects the poor.
The diagnostic process is broken down into four steps to make it easier to explain. In practice, the process is never entirely linear. Narrowing down on system-level constraints require exploration and experimental action, so programmes need to be prepared for some ‘back to the drawing board’ moments.
- Verify that the market system(s) selected for further investigation remains valid
- Map the market system structure and understand its operation and dynamics to ascertain where the system adversely affects the target group: Identify how the system isn’t working for poor people
- Identify system level constraints (root causes) that prevent the market system from serving the target group effectively: Understand why the system isn’t working for poor people
- Decide which constraints are the priority: Determine the point(s) where the programme can focus its efforts on the greatest effect