Market assessment is one of the primary prerequisites for business planning. It is necessary for knowing and understanding the needs, wants and beliefs of people who are going to buy or invest in your product. Market assessment will tell a businessman how to exactly determine the ebb and flow of the market in order to market the product with significant success.
Most of the times, you will already know that a market exists for your product. The problem is in knowing how big that market is and if it is big enough to support your business. If a product that is launched has little or no market, you will be out of business.
Market research is crucial in gaining a good understanding about your potential customers and competitors and the risks involved. Let’s look at what market research essentially involves
This is necessary for understanding the buying habits and lifestyle preferences of customers. Customer analysis can be based on data obtained through credit card purchases, magazine subscriptions, card memberships, surveys and voter registration of potential customers. This method, which is also called “data mining”, will help you make confident business decisions.
It is a general-purpose tool, which involves detailed methodologies like Orthogonality and Experimental Design used for making predictions about the decision-making behavior of customers. It is one of the most suitable methods for predicting a consumers’ willingness to pay for a service, a product or an upgrade.
So what if you are trying to sell a conventional product and others in the market are offering similar products too. Competitor analysis is needed to assess the strengths and weaknesses of your potential competitors. It can be done by first constructing a competitor’s array, which will clearly enable you to define the nature of your industry, your competitors, your customers the benefits expected and your key success factors.
Typically a competitor profiling will include research on the competitor’s background, finances, products, marketing, facilities, personnel and its corporate and marketing strategies. Media scanning is a great way of understanding the beliefs of your competitor and the kind of market they are trying to target. This is done through a thorough scanning of your competitor’s ads to find out about the new product offerings, branding strategy, positioning strategy etc.
This is an important factor and should be taken into due consideration. After all this research the last thing you can do wrong is to price your product inappropriately. Pricing should be accurate as a product that is of good quality and cheap may lure more customers while you incur losses and a highly priced product may drive them away putting you out of business.
Besides all this research, a Risk Analysis can be undertaken which is a process to assess the circumstances that may come in the way of the success of your business.
Most businessmen undertake a peripheral analysis and then sit back and wonder what went wrong. A detailed assessment of the market is essential and should not be taken lightly. It’s worth the money you will invest in your business.