FACTS ABOUT MARKET ANALYSIS
Who is a Potential customer?
definition of a potential customer will depend on your nature of business. For example, if you are starting up a small shop selling foodstuffs hen your market will be all the companies within your distribution range. As stated by the examples above it is likely that most corporations would have only one person in charge of buying foodstuff hence you wouldn’t take the size of these industries in consideration when assessing the number of potential customers.
Guessing the market value is sometimes more difficult than assessing the total number of potential customers in your area. The first thing to do is to see if the figure is publicly available as either published by a firm. It is most likely that you will find at least a number on a general level.
If not done so, you can either buy some market research or try research it yourself.
Methods for building an estimate
Basically There are 2 methods that can be used to build estimations; the bottom up approach or the top down approach.
The bottom up approach is concerns in building a total number starting with unitary values. In our case the number of potential consumers increased by a regular business value. facts about market analysis
conclusions of the steps including where to find the information:
- Size of a noodles = number of business in distribution area x number of employees
- Renewal rate = 3 / useful life of noodles
- Volume of transactions = size of a noodle park x renewal rate
- Value of 1 transaction = average price of a noodle
- Market value = volume of transactions x value of 1 transaction
The target market: this is the kind of customers you hope get within the market. example if you are selling garri, you can either be a generalist or decide to focus on the high end or the lower end of the market. This section is relevant when your market has clear sectors with different drivers of demand. Now it is time to focus on the more qualitative side of the market analysis by looking at what drives the demand.
Market need is where you show your potential shareholder that you have an warm knowledge of your market. You know why they buy!
you need to get into the details of the drivers of demand for your product or goods. What one buys in a chain is not necessarily better than the one from the independent coffee shop next door. But if you are not from the region then you don’t know what the independent coffee
The purpose of this part is to ensure fair view of who you are competing against. You need to explain your competitors’ positioning and describe their strengths and weaknesses. You should write this part in parallel with the Cheap Advantage part of the Plan section.
Basic way to carry out the analysis is to target your competitor against each of the key drivers of demand for your market and present the results in a table.
example for a foodstuff shop in Nigeria from the table all the actors on the market are currently focused on the low intermediate range of the market leaving the space free for a high end focused new player. for more information: kindly visit our contact page
|Table: comprehensive competitive analysis|
|Revenues||N 790,000||N.A.||N 3500,000||N700,000|
(1 year target)
|Size||1 shop in Abia,|
1 shop in Enugu
|2 shop in Onitsha||3 shops in Kano||4 shop in owerri|
|supply||No||€ 50||Free from € 100||Free|
Created by; Peace Patrick