The success, demand, further implementation, and promotion of your product primarily depend on your initial marketing management process. Not to say that this will guarantee sales. There are a number of triggers that may cause success or failure…
For example, according to Yelp statistics, the current pandemic caused 163,735 businesses to close down in 2020. The owners and product managers of these companies failed to reach the needed demand due to not being able to adjust to the recent shifts in the market. Therefore, to successfully roll out a new product, you definitely should start analyzing the market and its opportunities. That’s why our new article is devoted to the main stage before the product development stage – Market Opportunity Analysis.
In this article, we will examine the following steps of analysis:
– Identifying new markets
– Marketing opportunity assessment
– Target market selection
– Demand measurement and forecasting
– Market segmentation
– Market positioning
Steps of Market Opportunity Analysis
Identifying new markets
There are two ways of identifying new markets. The first one is an informal method of gathering information. Valuable insights may be hidden in business articles, newspapers, magazines, exhibitions, conventions, etc. Overall, try conducting personal research of trends, consume lots of media, and be open-minded.
Here’s the answer to how to identify new markets using the formal method – The Ansoff Matrix. The Ansoff Matrix is a matrix of product and market development. Check it out in the following image:
Market Penetration – is the stage in which a firm wants to get into an existing market with an existing product. In that case, the company can implement some of these issues:
– increase promotion and advertising budget
– swallow market competitors
Market Development – is the stage in which a firm is looking for a new market with an exciting product. In this context, expanding into a new market may ask for:
– including new customer segments
– entering into a new geographic market region (regionally and internationally)
This is the stage of business owners deciding to create a new product in the existing market. It consists of:
– examining existing products
– creating a special offer for every customer segment
The proposition of a new product in a new market calls for diversification. In order to diversify entrepreneur may:
– create a product that will belong somewhere between existing and new market to broaden target audiences
– buy already existing manufacturers on the market and start to
– implementing relevant changes to the product
So the first step of a market opportunity analysis is to determine both the kind of product and the type of market you want to launch it on. When you are available to do this, you may move on to the next stage.
Marketing opportunity assessment
It is essential not only to understand the market opportunities but also to compare them with the capabilities of your organization. Marketing Opportunities of a Company is the direction of marketing efforts in which a firm can achieve a competitive advantage.
To achieve this the firm should clearly understand its goals and its resources. The product owner can assess whether there are enough resources to achieve all the company goals by answering the questions in the following chart:
If, after following this pattern, your last point was “get next step” this is the time to move on.
Evaluate your target market
This step is required in order to locate and connect to the suppliers and marketing intermediaries within the chosen market. Also, to assess the performance of your potential competitors, which will determine your competitiveness.
In order to effectively evaluate your competitors, we suggest you stick to the scheme illustrated below:
This process is described as a practice of trying to predict the potential demand by assessing what consumers are going to do given a range of future conditions. Demand Calculation and forecasting are like another perspective to see a market – wordless, but numeric quantities. In that way, you can count the possible profit and losses.
Here you can see types of forecasting:
Market segmentation is the final step to analyze your target audience which will grant you a deeper understanding of them. By categorizing them and separating them into groups, you will reveal the specifics of each section. Continual analysis and research will show their needs for you to adjust the product or communication accordingly.
In the following image you can see the most common market segmentation parameters:
Market positioning is the way your brand or product should be perceived by your customer compared to the rivals. The purpose of market positioning is to select and create brand that will be unique and recognizable.
Here are some types of positioning strategies:
To find more about branding and customer perception, we recommend you to read our article – How Deep Does Brand Perception Actually Go?
We showed you just the basic steps to make your business profitable and efficient. However, there are a lot of nuances in all of this that need to be dealt with in detail. We can help you to clarify all the strategic issues on a call! Contact us to make the first step towards profitable results!