Question

In 100 words or more:

How would you go about identifying a market for a new business?

What are its most frequent uses; its most effective uses?

Answer 1

Following are the ways to identifying market for a new business:

1. Market Segmentation – It is important first to analysis which country our product will have high demand for the product we are planning to launch, once country is identified than out of all cities which city will be most favorable for the launch of the product, a customer segmentation helps to know such thing
2. Consumer Segmentation – In order to identify market for the new business, we analysis the customer and do the correct consumer segmentation in terms of age, gender, place of residence, education, employment, life style, values and motivation of buying the product. Such segmentation helps business to know how many customer business can have and whether it will worth to launch our product in that area
3. Competition analysis – It is important to under the supply of product in particular market, therefore such analysis helps to know how many existing competitors are there who is selling same product and how is there supply pattern. Are they facing issues, and how they are performing in terms of sales.
4. Analysis of complementary products – it is important to also study and analysis the performance of the companies who sells the product which are complementary products in relation to our product. Trends in the market of such products helps to know how they are performing and whether it will be wise a decision to launch our product
5. Identify entry points – how difficult or easy to enter in the market, what are registration requirement, is there any legal issues in entering particular market, a study of all such factors helps to plan the launch of product better and save some cost before hand

Companies frequently keep on assessing and doing customer segmentation with in customer segmentation, what I meant by this is that they initially do a large customer segmentation for example for a city, once their product is launched, they further do a deep analysis of customer representation with in that city to target the customer and offer them personalized product basis their region and further companies also keep on doing competitors analysis, as such analysis helps them to know how their competitor is performing, are they doing anything different to what we are doing, an eye on such changes helps company to outperform their competitors.

The most effective use of doing such analysis is that if company does analysis effectively, it can set a clear path and roadmap for the company and subsequently help the company to get settled easily. Another effective use of such analysis is not only where the customer are, and what customer wants, but also to know what are actuals needs of the customer in the market where we are planning to launch the product.