---
name: product-market-analysis
description: Use this skill when sizing demand, comparing competitor pricing, or scoring product-selection opportunities for a merchandising or product decision. It produces a structured, directional first pass to be validated with primary data before any commitment.
---

# Product & Market Analysis

> **What this is** — a repeatable, AI-assisted working method for taking a request in product and market analysis / merchandising, often beyond one's own formal training, and producing a rigorous, well-structured first pass quickly, with a qualified professional kept in the loop.
> **What this is NOT** — not audited market research or investment advice; estimates are directional and must be validated with primary data before capital or inventory commitment. Every output is a draft for review before it is relied on, published, or shipped.

## When to use this
- A product or category needs a quick, structured read on demand, seasonality, and market size.
- A pricing decision needs a competitor price-ladder teardown and positioning view.
- Several candidate products need to be compared and ranked before sourcing or inventory spend.
- A merchandising bet needs a directional sanity check before deeper primary research.
- Leadership wants a first-pass opportunity view they can pressure-test, not a final answer.

## Operating principle
Estimates are directional and their sources are always named. Every number is labelled as observed signal, published figure, or modelled assumption, so a reviewer can see exactly what is measured versus inferred. Nothing here justifies a capital or inventory commitment on its own — the output is a hypothesis to validate with primary data.

## Capability 1 — Demand & trend analysis
**Goal.** Size the opportunity and read demand direction for a product or category.
**Inputs.** The product/category definition, target geography, and available demand signals.
**Method.**
1. Frame the market with TAM / SAM / SOM: define the total addressable market, the serviceable addressable market, and a realistic serviceable obtainable market, stating the basis for each.
2. Gather demand signals: search-interest trends, marketplace bestseller ranks and review velocity, and social/community mentions — recording each source and date.
3. Chart seasonality using multi-period signal history; flag peaks, troughs, and lead times.
4. Triangulate: compare independent signals and note where they agree or diverge.
5. Label every figure as observed, published, or modelled, and state key assumptions explicitly.
6. Summarise the demand read with a confidence note and the primary-data steps needed to confirm it.
**Output.** A TAM/SAM/SOM view, a labelled demand-signal summary, a seasonality chart, and a confidence note.
**Quality bar.** No figure is presented without a source label; TAM/SAM/SOM assumptions are shown; divergent signals are surfaced, not smoothed over.

## Capability 2 — Competitor pricing comparison
**Goal.** Map the competitive price landscape and locate a defensible position.
**Inputs.** A competitor set, their SKUs/prices, and the value metric buyers pay against.
**Method.**
1. Build a price ladder: list competitor offers from low to high with the observed price and capture date.
2. Map each offer's value metric (per unit, per seat, per feature tier) so prices are compared on a like basis.
3. Lay out good/better/best tiers and place competitors on a positioning matrix (e.g. price vs. perceived value).
4. Identify gaps and crowded bands in the ladder.
5. Run a unit-economics sanity check: at each candidate price, estimate contribution after cost of goods, fulfilment, and returns.
6. Note where prices are promotional or time-limited so the ladder is not misread.
**Output.** A price-ladder table, a value-metric map, a positioning matrix, and a unit-economics sanity check per candidate price.
**Quality bar.** Every price has a source and date; comparisons use a consistent value metric; margin math is shown, not asserted.

## Capability 3 — Product-selection opportunity scoring
**Goal.** Rank candidate products with a transparent, weighted scorecard.
**Inputs.** The candidate shortlist and the decision criteria with their relative weights.
**Method.**
1. Define scoring dimensions: demand strength, margin, competition intensity, operational/fulfilment fit, and regulatory/return risk.
2. Assign weights reflecting the business's priorities; document the rationale.
3. Score each candidate per dimension on a fixed scale, citing the evidence behind each score.
4. Compute weighted totals and rank the candidates.
5. Run a sensitivity check: vary the weights and see whether the ranking holds.
6. Produce a ranked shortlist with the top candidates' key risks and the primary-data validation each still needs.
**Output.** A weighted scorecard, a ranked shortlist, a sensitivity note, and a per-candidate risk list.
**Quality bar.** Weights and scores are justified with evidence; the ranking's sensitivity to assumptions is disclosed; the shortlist is framed as directional pending validation.

## Worked example (illustrative)
*The following is an illustrative walkthrough, not a real sourcing recommendation.* A merchandiser evaluates three candidate products. Capability 1 frames a TAM/SAM/SOM for each with stated assumptions, reads marketplace review velocity and search interest as observed signals, and flags one product as strongly seasonal. Capability 2 builds a price ladder showing a crowded mid-band and an open premium gap, maps everyone to a per-unit value metric, and runs a unit-economics check that shows one candidate's margin collapses after fulfilment and returns. Capability 3 scores all three across demand, margin, competition, operations, and regulatory/return risk with documented weights; a sensitivity check confirms the top pick holds even when weights shift. The output is a ranked shortlist with risks and a list of primary-data checks (supplier quotes, sample orders, a small live test) required before any inventory commitment.

## Guardrails & escalation
- STOP and escalate to a qualified market researcher, finance owner, or category expert before any capital or inventory commitment; directional estimates are not a purchase justification.
- Never publish or act on figures as if audited; every number stays labelled observed / published / modelled, and none is presented as investment advice.
- Uncertainty is flagged explicitly: divergent signals, promotional prices, and assumption-sensitive rankings are called out, and required primary-data validation is listed with every recommendation.

## References & standards
- TAM / SAM / SOM market-sizing framework.
- Porter's five forces (competitive-intensity analysis).
- Van Westendorp Price Sensitivity Meter (price-point research).
- Jobs-to-be-done (JTBD) framework for demand and value-metric framing.

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*Part of Ed Chen's AI skill set — how one designer absorbs unfamiliar, C-level work quickly by pairing AI with rigor and professional review. https://edwson.com*