Market Need Analysis Define The Market Need For The New Business [PDF]

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Market Need Analysis Define the Market Need for the New Business In analyzing the market need, the following questions should be asked: 1. Who will get interested in my product? 2. What does the market need or want? 3. Who is buying the product? What and how much? or how, where and why are the buying those goods or services? Determining the marketability of the business is typically done in the context of creating a business plan and performing an analysis of the competition. It requires research in the areas of marketability. Consider whether the business offers a new solution to an old problem or complements an emerging trend. Untapped markets that are profitable are few. Understand the benefits that the product or service offers compare to others. Focus on 'benefits' of what your product or service does. Examine industry data that can confirm whether there is a sustained and growing demand for the product or service. Have considered sources of industry data, such as trade associations and government agencies? Identify the percentage of market share that it is realistic to capture. The more competition, the lower the margins will be. Market Analysis A market analysis is a quantitative and qualitative assessment of a market ability to respond positively. It looks into the size of the market both in volume and in value, the various customer segments and buying patterns, the competition and the economic environment in terms of barriers to entry and regulation in the industry. How to do a Market Analysis? This is show to the inventors that company knows their target market. It is large enough to build a sustainable business. The following activities can be recommended: 1. Demographics and Segmentation Demographics is a statistical characteristics of human population (as age of income) used especially to identify markets; a market or segment of the population



identified by demographic. Segmentation is the process of dividing into segment with similar characteristics. Market are needed to slice it into different segments. This is especially relevant if competitors focus only on certain segments. It can be segmented through its size (number of potential customers ) and the value of the market. Estimating the market value is often more difficult than assessing the number of potential customers. 2. Target Market This is the type of customers that are focused within the market. It is focused, on the more qualitative side of the market analysis by looking at what drives the demand. 3. Market Need Investors must determine the needs of the market through analysis based from research conducted focusing on their needs. Identify what the customer wants to classify their needs. 4. Competition Determining the competitor's positioning and describe their strengths and weaknesses. Analyze competitors angle to the market in order to find a weakness that company will be able to use its own market positioning. One way to carry the analysis is to benchmark the competitor against each of the key drivers of demand for the market (price, quality, add-on services, etc.) and present the result in a table. Barriers to Entry These are the hindrances or something material that block or intend to block passage. It is a natural formation or structure that prevents or hinders movement or action or even separates the new businesses. Here are a few examples of barriers to entry: 1.Investment (project that requires a huge investment) 2. Technology (application of the combination of specific and engineering knowledge) 3. Brand (the huge marketing costs required to get to a certain level of appreciation) 5. Access to resources ( exclusivity with suppliers, accessibility of suppliers) 6. Access to distribution channels ( exclusivity with distributions, availability of intermediaries) 7. Location (place, venue where the business is located)