Market trends are important for every business, as they pinpoint exactly where your enterprise sits in the grand scheme of things. Actually, it must be a part of your business plan for the right reasons. 

So, in this blog, we’ll go over

• what market trends are
• Types of market trends,
• The importance of market trends in business plan and
• how to incorporate them in your business plan

What are Market Trends?

Market trends are movements in the direction of the market that can be positive or negative. The word “trend,” itself synonymous with “pattern,” means the continuous occurrence of an event for a period of time (long or short). So, when we say market trends, we mean patterns in the activities of the market that will affect businesses in the industry one way or another.

A perfect market trend example is the mobile phone industry, where a considerable change occurred. We saw the gradual shift from thick, sturdy keypad phones to the slicker, touch-screen devices. Finally, it seems the industry is back to the “flip-screen” era as more brands produce phones with foldable screens (amazing!).

Another example of a market trend took place in the music industry. Back in the day, people listened to music on the radio, then boomboxes took over. Later on, iPods hogged the limelight with their portability and massive capacity, and now people just stream online.

Unsurprisingly, both examples highlight something: the need to stay on top of market trends.

What Are the Types of Market Trends?

Primarily, there are 3 types of market trends. Let’s go over them

• Short-term. Like the name suggests, these trends last for a short while—a few days or even hours. A headline related to your business can drive sales faster or slower. For instance, news reporting an increase in iPhone clones can negatively affect sales for awhile.
• Intermediate. These trends could last between one or two months. For example, the Halloween, Black Friday, and Cyber Monday events may cause a change in consumer behaviour. The same could be said for elections and December holidays. To beat the competition, you may need to adjust your offer till the trend subsides.
• Long-term Trends. These ones could last for years. For example, the COVID-19 pandemic caused many changes in the order of business. Due to drastic changes, many companies collapsed while others rose to the occasion and made lots of money. 

Additionally, political changes and even technological trends contribute to long-term trends.

Importance of Market Trends In a Business Plan

A business plan provides readers with the perfect picture of your business and it’s potential. But what’s a business plan without proper market analysis?

Market trends form a crucial part of the wider market analysis in your business plan. It shows exactly where your business fits in its industry and how it stands out from competitors.

Including market trends in your business plan helps you focus on what appeals to your customers and plan accordingly. Also, with better insights into the industry’s market, you’ll create a better content strategy aimed at attracting more clients. 

Here’s a further breakdown of how market trends help your business

• Staying ahead of the competition. Trends occur all the time, but catching the trend early enough and adjusting to it is the key. If you strategise properly, your market share will increase.
• Understanding the market. Knowing exactly how your market works doesn’t just help you make predictions and stay ahead of the competition; it increases your profit since you now understand the target audience better.
• Reviewing your business tactics. “Desperate times call for desperate measures.” Once you’ve identified a market trend, you can address your business strategies to suit the current market dynamics better. 

How To Identify Market Trends

Since you know the importance of market trends in a business plan, what’s left is how to spot them even before they hatch completely. But you have a product to develop, a website to build, and a marketing strategy to implement.

Regardless, you must find away around the common challenges all entrepreneurs face and identify those trends. Here’s how:

First, use social media. Why? As of October 2024, there were 5.52 billion internet users worldwide, and almost every piece of information you need is on one platform or the other. With social media, you don’t need so much brainpower and time to get info; just follow relevant pages and individuals.

Then, check out important publications (online blogs or even magazines) in your niche for real-time news. Read relevant publications in your sector to find out what is making headlines. A keyword into Google and a scroll down the results page will help you stay on top of your game at all times.

Follow influencers and relevant content creators. This helps you understand how your target audience loves to communicate. Remember, people follow influencers because they address their audience right.

Finally, read the boring, long industry research and reports. Yes, it’s time-consuming, but these materials provide a detailed overview of your industry.

Market Trends You Must Monitor

You need to stay on top of the following market trends, as they’ll affect the marketplace, your business, and eventually, your business plan.

Consumer Behaviour

Your business survives solely for your clients, so you just pay extra attention to their desires and how it evolves. How? Monitor their buying patterns, preferences, and pain points. Watch social media conversations, encourage and analyse customer feedback, and study demographic shifts that might affect your target market.

Technological Advances

Keep an eye on new tools and innovations in your industry. Whether it’s AI, automation, or mobile solutions, staying current with technology helps you maintain a competitive edge. Watch for solutions that could streamline operations or enhance the customer experience.

Industry Regulations

Stay updated on changing laws and regulations that affect your business. New compliance requirements, policy changes, or industry standards can impact how you operate. Regular monitoring helps you adapt quickly and avoid potential legal issues.

Competitors’ Yard

Watch what your competitors are doing—it’s a must!. This helps you detect new trends without breaking a sweat. So, track their pricing strategies, new product launches, and marketing approaches. Understanding their moves helps you position your business better and identify market gaps you can fill.

Regular monitoring of these trends helps you make informed decisions and keeps your business plan relevant and effective.

How To Write Market Trends In Your Business Plan

So you know what market trends are and how important they are, but how do you incorporate market trends into your business plan?

Here’s a breakdown of how to incorporate market trends in your business plan:

Use a Data-Backed Strategy

Gather relevant statistics and research findings to support your business decisions. Then, show how trends influence your target market and group your findings in the sections below.

Market Opportunity Section

Highlight new trends that create opportunities and explain in detail how your business will seize the opportunities. Particularly emphasise how the trends connect to your unique selling proposition.

Risk Analysis section

Talk about potential market shifts and include how you will contain them. Basically, show how you’ll adapt to industry evolution. 

Financial Projections

Make financial forecasts based on the current market condition, and then factor in the effects of market trends on costs and pricing. For better illustration, include trend-based growth scenarios.

Set Action Plans

Create specific steps, timelines and resource allocation to capitalize on trends

Wrapping It Up…

Including market trends in a business plan is a sure way to write an investor-ready business plan. But remember to update your business plan regularly to reflect new market trends and maintain relevance.

Are you a beginner? Here’s the ultimate business plan guide for you.

Don’t have the time or the energy? Then let Techdella write a business plan tailored to your business needs. Contact us now!.

FaQs You May Also Have

In case you have some doubts left, below are some of the frequently asked questions and their answers.

How do you identify market trends?

• Watch consumer behaviour
• Conduct competitor analysis 
• Follow influencers on social media
• Read relevant publications and industry research reports.

What are the 3 market trends?

The three types of market trends are:

• Short-term trends 
• Intermediate trends and
• Long-term trends

What is market trend and examples?

A market trend is the shift in the direction of the market. For example, when phone users opt for sleek rather than the chunky old-age phones. Another instance is when music lovers stream music rather than listen to the radio.