The phrase “Know thy enemy” isn’t only a life hack. It also applies to market analysis. Approaching marketing for Microfinance is all about knowing your customers and competitors, not necessarily enemies in this context, and understanding the market. A knowledge of these three pieces is the foundation for effective marketing strategies.
This article examines four types of analyses and their role in shaping a market-led approach.
The Four Key Analyses in Microfinance Marketing
Key One : Market Analysis
Market analysis involves profiling and understanding the MFI’s target or potential market to identify growth opportunities. Conventionally, this has always been conducted based on assumptions.
For instance, a person might assume that farmers need a loan to scale their business, and this may be true or not. If it is true, then it is a win; if not, the Microfinance institution suffers loss. The role of a market analysis is to put together information based on data, not assumptions.
Key Components of Market Analysis
There are key components to conducting a market analysis; they include the following
- Understanding Target Segments
Target audience is a common lingo in marketing, and it is a key factor in marketing analysis. Market analysis involves segmenting your target by various factors like demographics, behavioural patterns and even cultural differences, as these details help identify marketing opportunities, communication channels and styles. Let’s look at each segment.
Demographics: Demography contains details like age, gender, income levels, and geographical distribution of the population to identify key market segments.
Behavioural Patterns: Study financial behaviours, such as saving habits, borrowing tendencies, and repayment patterns, to align products with customer needs.
Cultural Context: Consider cultural attitudes toward credit, savings, and entrepreneurship, which can influence product adoption.
Identifying Market Gaps
Marketing gets easier when you can identify gaps you can fill and profit from. Strategies you can implement include :
- Finding regions with limited access to formal financial services and providing solutions therein.
- Identifying financial products that are missing or insufficient in the marketplace and providing these loans. This may require niching down, for instance, proving education loans.
Analyzing Economic Factors
Analyzing economic factors such as income levels, employment patterns, and inflation rates is essential for your marketing analysis procedure. Together, these will inform the chances of repayment and what interest rate is considerably good.
Leveraging Technology Trends
Knowing the technological trends familiar to the region you’re hoping to penetrate is a more crucial aspect of market analysis. Amongst the data that you would collect is to fully understand their smartphone and mobile software usage. You may also analyze what fintech partnership can help you achieve these things.
Key Two: Competitor Analysis
Your marketing strategy or campaign is not complete without a thorough look at your competitors. For microfinance institutions, competitor analysis will require focusing on formal (Banking system ) and informal competitors (Unregistered lenders and registered ones ), thereby studying their products, pricing, and strategies.
Read more here to find the tools to conduct a complete competitive analysis.
Key Three : Customer Analysis
Another piece of the puzzle is getting the customer analysis right. A full grasp of customer analysis will help create strategies that improve retention and loyalty over time.
More importantly, customer analysis helps you create your communication style and strategy based on the various customer avatars you may have.
Key Four : PEST Analysis
Another critical analysis is the PEST ANALYSIS. The PEST framework examines external factors influencing the MFI’s operations. The abbreviation represents the following :
- Political: Regulations affecting microfinance.
- Economic: Income levels and market stability.
- Social: Cultural attitudes toward savings and loans.
- Technological: Adoption of mobile banking and digital tools.
The PEST analysis serves as an overall analysis of the above three mentioned.
These analyses work together to provide a comprehensive understanding of the market. For instance, insights from customer analysis can refine product offerings, while competitor analysis informs pricing strategies.
Having a full grasp of this will influence marketing decisions.
Conclusion
Comprehensive analysis is essential for MFIs to remain competitive and customer-focused. By leveraging market, competitor, customer, and PEST analyses, MFIs can craft effective marketing strategies that drive growth and impact. Book a discovery call with us to get started in your marketing strategy.
