Market Analysis

Market Analysis

(level 1 heading in your Business Proposal)

Geographic Location (level 2 heading)

Target Market (level 2 heading).

Competition (level 2 heading).

Unmet Customer Need (level 2 heading).

Competitive Advantage (level 2 heading).

Note: if you choose additional sub-headings (levels 3-5) ensure APA format is

followed. Past students have chosen to add a S.W.O.T. analysis etc.

Break down and Instructions: All the information below is to be researched and cited (use APA). Remember, you are

researching this information but you are NOT writing a research paper/section.

Let’s begin, two primary components are the target market (the consumers for your

product/service) and Geographic location.

Geographic Location Identify a Geographic Location (ex: Half Moon Bay Business District).

Why was the location selected? Research and provide data. For example, Is

your service or product not provided in this area?

Target Market.

Research and provide the below data.

What do you know about your target market?

Start with these questions. Provide the researched and cited data in a narrative, no bullets

or direct quotes. All cited information must be paraphrased and entered on the reference

page for verification. All cited information must be between 2015 and 2019.

Who are your potential customers?

Where are they located?

How large is your target market?

What are the needs and wants of your target market?

What criteria do they use in making their buying decisions?

Use commerce site

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Use your reading about geographic location to describe, Not Explain, that this is a good location.

The description of your target market should be very specific. Are your potential

customers individual consumers, businesses or both? If your target market is consumers,

what is their demographic profile: gender, age range, income range, education, etc? If

your target market is businesses, what type are they – retail, manufacturing, construction,

etc.? Where are they located? What size are they in terms of employees?

Be realistic in estimating your geographic market area and the number of potential

customers. If you own a neighborhood convenience store, for example, you will attract

customers from a limited geographic area. However, if you operate a specialty furniture

store, you will draw customers from a much larger geographic area. Businesses that have

an Internet presence have the potential for vast geographic coverage.

If your target market is individuals, demographic data from the U.S. Census can help you

in estimating the number of potential customers in your geographic market area. Consult

www.census.gov.

The most critical step is to understand your customer’s needs and to meet those more

effectively than the competition. Constantly focus on the customer and what he/she needs

and wants to buy, not what products or services you need or want to sell. You must put

your personal preferences aside!

Examples of customer needs that you might serve include convenience, education,

recreation, safety and concern about personal health or appearance. Businesses that meet

the customer need for convenience, for example – very popular in our hectic world –

include fast food restaurants, drive-through car washes, errand services and same-day

photo processing or dry cleaning services.

Customer needs and wants are related but not synonymous. The wants are the customer’s

personal desires for satisfying their needs. For example, all adults have a need for

recreation, but if three individuals each had $20 to meet their need…

One may want to go out to dinner.

One may want to go to a movie.

One may want to go shopping.

Also, you must determine what criteria are important to your target market in making

buying decisions. Specifically ask potential customers when you do your market

research; don’t make assumptions!

Competition In general, learn as much as you can about your target market. The better you understand

your potential customers, the better your chances of success in meeting their needs more

effectively than your competition.

Describe all competition Provide narrative for all the following:

Who are they?

Where are they?

What products/services do they offer?

How are their products/services priced?

What are their strengths and weaknesses?

How do they promote/advertise their businesses?

In identifying your competition, keep in mind two key points:

Your competition may be located outside your geographic market area.

For example, a women’s clothing business competes with similar local businesses plus Internet businesses, mail order companies and out-of-town factory outlets.

Your competition is any business that serves the same customer need for the same

target market.

For example, a miniature golf course competes with other courses plus other businesses

that serve the customer need for recreation for adults and children in the same geographic

market area. Therefore, competition may include movie theaters, bowling alleys, roller

skating rinks, etc.

The competition’s strengths and weaknesses are also known as competitive advantages

and competitive disadvantages. A competitive advantage is any characteristic of the

product or service that makes it more appealing to potential customers than what the

competition is offering. Conversely, a competitive disadvantage is a characteristic that

makes the product or service less appealing. Realistically, every business has both

competitive advantages and disadvantages – including yours!

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Minimum 5 competitors
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A narrative for each competitor (all 5)

Examples of competitive advantages include quality, variety, uniqueness, convenience,

performance and price. Examples of competitive disadvantages include lack of name

recognition, poor location and limited distribution.

Again, learn as much as possible about your competition to improve your chances of

success.

Unmet Customer Need

Your goal is to find an unsatisfied customer need in your line of business in the

geographic area that you want to serve. This is called a market niche.

If you discover that the customer need is being adequately met by the existing

competition, you can consider a different line of business and/or a different location, or

you may decide against self-employment.

Competitive Advantage

What will make your business successful?

Based on what you know about your target market and the competition, you choose a

position in the competitive environment. This decision-making process is called

positioning.

To attract customers, you must offer them a reason to choose your business to meet their

needs. This reason is called your competitive advantage. Be aware that you may have

more than one competitive advantage. For example, you might position your business to

attract customers based on both your convenient location and unique services.

EXAMPLE:

Glenna Brownell is interested in starting a retail store that offers used household goods,

such as furniture, dinnerware and accessories. Based on research, Glenna determines that

quality and price are key factors used by her target market in making their buying

decisions. She researches the competition and learns that there are six antique stores in

her geographic market area that offer high-quality used merchandise at high-end prices.

Also, she finds three competitors – thrift stores, flea markets and garage sales – that offer

low-quality, low-priced goods.

 

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Market Analysis was first posted on March 13, 2020 at 12:50 pm.
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