About Lesson
Market Analysis
It is critical that you understand your market. A good product is not enough to guarantee marketing success. For example, you may make the best buggy whips in the world, but this doesn’t matter if there aren’t customers to buy your product. This is one of the most important sections of your business plan. It will be scrutinized carefully; therefore, your market analysis should be as specific as possible, focusing on believable, reliable, achievable projections.
2.1 – Market Definition
Type a quick explanation and definition of your market. You may want to introduce this section highlighting the key elements of your marketing plan.
2.2 – Target Market
The first step is to define your target market. Even if you intend on selling a service only in your own town, you’re not selling that service to everyone who lives there. You need to know exactly what the people who might be interested in buying your product or service are like, and how many of them there are.
Convey your broad understanding by describing relevant characteristics such as their demographic breakdown, their buying habits, their interests, their special needs, and their geographic location. Explain how you did your market research, the resources you used, the types of studies you conducted and the focus groups you led. Most of the information that you need here can be found at your library, from the U.S. Small Business Administration, U.S. Department of Commerce and the Census Bureau. Target Market (What is the demographic of your clients? What are your niche market specifics?)
2.3 – Competition
Now consider your competitors, how they market their products, and why people buy from them. Determine their strengths and weaknesses, their position in the marketplace, and their status(growing, maintaining, and scaling back). Investors sense danger when an entrepreneur suggests there is no competition for his product/service. In fact, there are two kinds of competition of which you should be aware: direct and indirect. Direct competition offers the same product/service to the same market; indirect competition offers similar products/services, only to a different market. You’ll need to include adiscussion on both. As you evaluate your competition, you’ll want to include:
– Names of your major competitors
– Their location
– Products or services they offer
– Their market share and dollar sales
– Current performance
– Strengths and weaknesses
– Names of competitive operations that have recently closed with a reason why
2.4 – Market Trends
State why the market will support your business. Include trends in your industry, an economic analysis, and ͞optimistic-pessimistic-realistic͟ scenarios. Again, you can find this information at your library. Start with The encyclopedia of Business Information Sources published by Gale Research Company for manuals, publications, trade associations, and directories on more than 1200 industries and businesses. Also include any anticipated impact that laws and regulations may have on the market.
2.5 – Market Research
Create a list of places you used as references when doing your market research.