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EVALUATING YOUR MARKET: CRITICAL ELEMENT OF SUCCESSFUL BUSINESS

Adeolu Eletu

If you are thinking of starting a new business or expanding into new markets, proper market evaluation is critical to success.  While it may sound deceptively simple to figure out if a market exists for your product or services, it is probably one of the most challenging requirements of business. The process involves scrutinizing your competitors and your customer base and interviewing your potential suppliers.

The information collected can help you, if necessary, adopt your product or service to better meet customer needs. In some rare cases, it might lead to a totally new, but financially rewarding venture. Some of the basic considerations of market evaluation include but not limited to the followings:

Market research

There are a number of benefits to conducting market research. It can help you:

  • Create primary and alternative sales approaches to a given market,
  • Make profit projections from a more accurate base,
  • Organize marketing activities,
  • Develop critical short/mid-term sales goals, and
  • Establish the market’s profit boundaries

So, how should you go about conducting your research? Two of the most important first steps are defining your goals and organizing the collection/analysis process. Maintain a set of well documented and easily accessible files you can store and retrieve data as needed.

Questions to ask

Your research should ask these basic questions;

  • Who are your customers
  • What are their needs and resources
  • Is the service or product essential in their operations or activities
  • Can the customer afford the service or products?
  • Can you compete effectively in price, quality and delivery?
  • Can you price the product or service to assure a profit?
  • How many competitors provide the same service or product?
  • What is the general economy my of your service or product area?
  • What areas within your market are declining or growing?

 

Market Data

Knowing you market not only requires an understanding of your product, but also an understanding of your customers’ social and economic characteristics. In conducting your research, you can access relevant market information from these sources:

  • Trade association studies and journal articles
  • Regional planning organization studies on growth trends.
  • Banks, Realtors and insurance companies.
  • Customer surveys, in your market area, which you can conduct on your own or search out existing material.

Finally, research on competitors is extremely important. Visit industry trade shows to find out what your competitors are selling and how they are marketing their products. Similarly, stay Current on information in industry magazines and publications.

Research data will help you develop the basic assumptions in your financial projections, and tell you whether or not to go into business. Once you have obtained and analyzed this information, it becomes the foundation of your business plan. You should not view market research, however, as a one-time activity. Once you establish your business, you should continually be in touch with your customers. You may also have to adapt your product/service and/or marketing strategy to keep up with your customers’ changing needs.

Export markets

Whatever your product or service, it is never too early to explore its export potential.

Researching international market involves many of the same steps as domestic market evaluation. The first step is to identify the countries with the largest and fast-growing markets for your products.. From your list of possible markets, you will want to determine which of these offer the best prospects. You should examine the markets in general detail, looking at how your product quality and price compares with that of goods already available. You should determine who your major customers are.

With this information, you can pick two export markets to explore initially. You can add more markets later, as your export skills develop. Now you are ready to conduct more in-depth market research on this market(s), just as you did before establishing your business.

Summary

A small business owner must know and understand the market. Market research is simply an orderly, objective way of learning about people – the people who will buy from you and sustain your business venture.

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