Assess the Market for Your Business Idea

Conducting a Feasibility Study: Part 1Start a new business

Develop the concept for your venture

Develop a sales forecast

Flesh out your marketing plan

Develop a detailed marketing program for each channel you plan to use

Market throughtraditional distribution

channels

Market directto the consumer

Market to thegovernment

Market inforeign markets

Market throughspecialty channels

Evaluate technical feasibility

How will product be produced

Determine fixed production costs

Establish a price structure for yourproduct or service

Determine variable production costs

Develop a preliminary marketing plan

Research customersand markets

Test your productor service

Assess market size,segments and trends

Evaluate the competition

Steps for Assessing Market Opportunities

1. Identify the Environmental Forces Impacting Your Business

• 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

• 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

4. Create a Target Market Profile• Levels: generic needs, product type,

specific brands• End-user focus; also channel members• Profiles of target customers

• 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 prototypeObtain Opinions from Prospective BuyersDirect comparison with competitors productsOne store testExhibit at trade showsConduct 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 useDescribe your marketing plan including your sales strategy, advertising and promotion plans, pricing policy, and channels of distributionDevelop a marketing plan for each distribution channel you plan to use