How to Write a Product Analysis
The main purpose of the product analysis report is to aid you in having a full understanding of each item in your inventory. Good product analysis can be vital for everyone in the business – allowing you to better predict a product’s success, and ultimately assess what went right or what went wrong.
Identifying product trends and learning from past mistakes is fundamental when it comes to the success and longevity of your business.
Let’s break down what a product analysis report actually is, deep dive into the many purposes of good product analysis, learn how to write a product analysis, and identify supplementary analyses
What is a Product Analysis Report
A product analysis report is a document that contains all the information that was done during your product analysis, as well as all the findings brought about by that analysis.
So what does product analysis entail then?
Product analysis endeavours to define every aspect of a product, from end to end – the more in-depth the better.
It starts with breaking down the physical (or digital) product, including but not limited to its components, designs, technology, functions and marketing approach.
It’s important to ensure that there is a clear message match between the product and its marketing – the product needs to do what the company claims it does.
Another vital aspect of good product analysis is a breakdown of its costs.
This should analyse the costs involved in the manufacturing of the product, research & marketing, pricing strategies as well as cost vs quality ratio.
This can help a business identify tweaks and changes to the design that can reduce costs without lowering the product quality.
Another useful aspect of product analysis involves competitor research.
Understanding the competition enables you to pinpoint what sets you apart, allowing you to focus more on the unique advantages that your product offers.
Besides marketing advantages, evaluating your competitors can also aid you in ensuring that your prices are in line with what is expected by the customers.
If your prices are higher than competitors, it’s important to educate your audience in why this is the case, focusing on what makes your product unique in comparison.
Purpose of a Product Analysis Report
The purpose of a product analysis report can be broadly broken down into three major facets:
1. Internal Analysis: which focuses on how you, as the business, can better improve, tweak and market your product.
2. External Analysis: which focuses on your potential customers, analysing how you can convince them that your product is worth buying, and why they should choose it over a similar competitor’s product.
3. Cost Analysis: which focuses on the end-to-end costs involved from manufacturing to sale – allowing you to analyse where you can potentially cut costs while still maintaining the quality of your product.
How to write a Product Analysis Report
When doing product analysis and writing a product analysis report, it’s important to start by determining what the end goal is.
Ask yourself the following questions before getting started:
– Is the goal to introduce or improve on product design?
– Is the goal to analyse costs, identifying ways that you can cut costs in comparison to your current design?
– Is the goal to breakdown and compare the functionality and design of one product vs. another?
– Is the goal to analyse similar products offered by competitors and discover how your product can stand out?
– Is the goal to analyse the marketing and message match for a product, identifying ways to improve your strategy and/or lower marketing-related costs?
Answering these questions and having a clear understanding of what you hope to achieve through your product analysis report is important.
It will help you write better product analysis and make clear the purpose of a product analysis report.
Let’s take a look at some other useful analyses that can also assist you in your product analysis report process:
ABC Analysis
The ABC Analysis refers to a stock management technique designed to determine the value of your inventory items based on their importance to your business.
Products are ranked on cost, demand and risk data.
Stock items are split into three categories according to how well they sell and how much they cost your business to hold.
This enables you to separate your most important products from your least important ones, making it possible for you to more effectively use your business resources.
Win Accounting’s ABC Analysis provides useful data and analysis for forecasting the demand of products, giving you the power to better optimise your stock control, managing your inventory levels accordingly.
In conjunction with your product analysis report, the ABC analysis can provide you with the ability to identify more strategic product pricing, allow you to negotiate better terms with your suppliers, improve business resource allocation and enhance end of life management.
4 P’s Analysis
Understanding the 4 Ps can help you elevate your marketing strategies by breaking it down into the four basic pillars of marketing.
The 4 P’s of marketing, also known as “marketing mix” are:
1. Product (or service): What you sell, branding, problems it solves for your customers and what makes your product unique.
2. Price: How much you charge for your product or service, pricing strategies, discounts and guarantees.
3. Place: Where you will showcase your product or service, identifying your target audience and understanding how to connect with them.
4. Promotion: Strategies you can use to reach and entice your potential customers with a promotional mix including advertising, direct marketing, PR and sales promotions.
Understanding these 4 pillars of marketing help make the purpose of the product analysis report clearer, allowing you to identify strategies that work and learn from strategies that are less successful.
While the product analysis report can feel overwhelming, Win Accounting can help make the process easier! Connect with us today to find out how our smart accounting software can help you achieve business success.
(Last Updated: 14 March, 2022)
