With increasing competition in almost all industries, making profits and sustaining growth is no more a guarantee. Product life cycles have been shorted significantly with scientific and technological advancements. Business models tend to change and new competitors emerge with time. The truth is that there is constant instability surrounding all types of businesses. This is likely to compel you to identify market opportunities to ensure business growth and expansion.
To search for viable opportunities, you need to establish a proper framework. You also need to know your business direction. Also, it is essential to have ample knowledge of your company’s abilities, strengths and resources.
Related Post: How to identify your target market?
On having a thorough understanding of the expertise area and company goals, you should evaluate your target market and consumer needs. Also take into consideration several aspects like direct/indirect competitors, brand value propositions, the general environment, existing regulations and supply chains.
8 ways to identify Potential Market
- Purchase situation analysis: It is necessary to evaluate purchase situations to uncover opportunities. While reviewing, you need to ask a few questions:
- When will people shop for our services/products?
- Where do they make the purchase?
- Is it provided at the right time?
- What payment mode they use?
- Consumer segmentation: It is essential to identify consumer segments sharing common features to understand demand. They are ‘hard’ variables like gender, age, educational qualification, residence, income level and occupation. Knowing it can help estimate potential customer numbers your business can have. It can also be ‘soft’ variables like purchasing motivations, values, attitude and lifestyle. They help to identify motivations that result in purchase decisions like design, durability, convenience, prestige and price.
- Indirect competition analysis: Analyzing substitute industries can also help to identify market opportunities. It offers better insight into growth opportunities and offers a competitive advantage.
- Direct competition analysis: Supply should also be analyzed thoroughly. You need to be aware of the existing target market players to compete with. This is crucial while analyzing business opportunities. Some relevant questions include the following:
- What competitive advantage your business has over them?
- Which brands/products are growing significantly and why?
- Their value proposition
- Analyzing other industries: The objective of companies in certain cases is to stop operation in an industrial sector. Rather, it will have plans to expand specific business philosophy or model. When entering any new domain, you need to be aware of the existing competition. It includes market shares, market sizes, unit prices, growth rates, brand positioning, and per capita sales.
- Analyzing complementary services/products: You need to monitor other companies’ product/service performance, complementary to your own. A packaging company for example is to monitor product sales to potentially package. On the other hand, coffee machine producing company is to gather information on coffee sales types. Complementary Potential Market trends are to be considered while making decisions.
- Analyzing foreign market: If you deal in products/services belonging to a saturated/mature market, then you can identify market opportunities. Markets across the globe are known to grow at differing paces. There are several reasons cited for the same including disparities in local habits and economic development. You need to be aware of the capita consumption evolution of any product in a particular country. It can help indicate the product’s life cycle and maturity. Proper information on Potential Market size and competitors can help gets an estimation of business potentiality.
In case, you find it tough to identify market opportunities, then you can always take the help of experienced professionals. They can evaluate direct/indirect competitors, diverse industries, complimentary services/products, foreign markets as well as relevant environmental factors.