Doing good marketing research will help you decide on the best markets to enter for a new small business and it will help give you the tools and data you need to create powerful marketing campaigns.
I am surprised at how many people do not take the time to do adequate research before starting a small business. In today’s episode, we talk about the various ways to assess a market. We then discuss how understanding the market conditions can help you create successful marketing campaigns.
Below are Ten areas you can use to Asses your small business market
1. Size of the market – Trying to determine the size of a market is a measurement of the demand of a market. The questions that you must ask to determine the size of your market is: How many people are actively purchasing things in the market? How much money is in this market per year?
The formula for determining the size of the market is. Break items down to real numbers then add assumptions until you can get good business estimate numbers.
The formula is: Units of analysis x purchase frequency x product price = Market Size
Listen the process to hear me go through that entire process
2. Urgency for your solution – Is there and urgency for your product, and how often is there an urgency for your product. Is the urgency for your product/service immediate or evergreen.
3. Strength of the market, growing or dying – What segments of the market are growing? What cycle of the product life-cycle is your small business. The phases of a business are
Seed/Start-up, Growth, Maturity, Exit/Decline
4. Speed to market – How long will it take for you to take items to market. Can innovations and something to sell be made available quickly?
5. Price Points of the Market – What are the price points in this market? Is there price elasticity you to create use to create greater margins.
6. Uniqueness of you offer – Is you service or market uniquely different? Will it be east to create a USP or Will you need to manufacture a USP. Is uniqueness implied in the product i.e. Space Travel
7. Cost of Delivery – What is the cost of delivery for your service. Will an increase in business create an increase in the cost to delivery of your product or service. Will there be fixed cost and large overhead. I mentioned an example of Oil delivery company in New York. www.oilmansoildelivery.com
8. Upfront and Ongoing Capital investments – This is a question of how much will be needed to get started. There are literally 100 dollar business and there are other that require massive funding and capital upfront to get started.
9. Upsell potential – How early can you as a second offer? There are many products that lead to additnal needs such as a Razor that needs Blades, shaving cream etc. Will you product lead to a consistent back-end potential.
10. Are there many competitors – Who are the main competitors in your market?
How many direct competitors are there? Competition is not a bad thing – You can spend time improving your offer because the market is proven and already exists. How are the major players positioning themselves in this group?
Completing thorough market research is a vital part of creating a great marketing plan and it is the first step in my Straight A Marketing System coaching program