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 sales forecast Flesh out your marketing plan Develop a detailed marketing program for each channel you plan to use Market through traditional distribution channels Market direct to the consumer Market to the government Market in foreign markets specialty channels Evaluate technical feasibility How will product be produced Determine fixed production costs Establish a price structure for your product or service Determine variable production costs Develop a preliminary marketing plan Research customers and markets Test your product or service Assess market size, segments and trends Evaluate the competition

Steps for Assessing Market Opportunities 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)

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

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 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 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

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