Transcript Assess the Market for Your Business Idea

Assess the Market for Your
Business Idea
Conducting a Feasibility Study: Part 1
Start a new business
Develop the concept for your venture
Develop a preliminary marketing plan
Evaluate technical feasibility
How will product be produced
Determine fixed production costs
Determine variable production costs
Establish a price structure for your
product or service
Research customers
and markets
Assess market size,
segments and trends
Test your product
or service
Evaluate the
competition
Develop a sales forecast
Flesh out your marketing plan
Market through
traditional distribution
channels
Market direct
to the consumer
Market to the
government
Market in
foreign markets
Develop a detailed marketing program for each channel you plan to use
Market through
specialty channels
Steps for Assessing Market Opportunities
1. Identify the Environmental Forces
Impacting Your Business
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Economic conditions and trends
Legal and regulatory situation and trends
Technological positioning and trends
(state of the art; related R&D)
Relevant social changes
Natural environment (shortages?
vulnerabilities)
2. Describe the Industry and Its
Outlook
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Description of industry
Size – now and in 3-5 years
Nature of market segments
Industry marketing practices
Major trends
Implications for your opportunity
3. Analyze Your Key Competitors
• Who are they?
• Product description
• Market positioning (relative strengths and
weaknesses, as seen by customers)
• Marketing practices – channels, pricing,
promotion, service, etc.)
• Estimated market share
• Reactions to competition
• Implications for your opportunity
Create a Target Market Profile
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Levels: generic needs, product type, specific
brands
End-user focus; also channel members
Profiles of target customers
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Who are your potential customers?
What are they like as consumers/ business people
How do they decide to buy/not buy
Importance of different product attributes
What outside influences affect their buying decisions
What are the implications for your opportunity?
5. Market Test Your Idea
Develop a prototype
Obtain Opinions from Prospective Buyers
Direct comparison with competitors
products
One store test
Exhibit at trade shows
Conduct a focus group or customer survey
6. Develop Sales Projections
• Use as many formal or intuitive
approaches as possible
• Compare the results
• Make Go/No Go decision
Develop Your Preliminary
Marketing Plan
Detail the marketing strategy you plan
to use
Describe your marketing plan including
your sales strategy, advertising and
promotion plans, pricing policy, and
channels of distribution
Develop a marketing plan for each
distribution channel you plan to use