A market feasibility study is a valuable activity for anyone starting a business to perform. These types of studies identify potential markets, look at what competition is out there, and analyse the market to assess the viability of the business idea.
Feasibility studies are different from marketing plans. They are used as assessment tools, looking at how things work (and indeed, if they will work at all), as well as identifying any potential challenges and addressing ways to resolve them. The PDF attachment explains what a marketing plan is. You can view some more information about business and marketing by visiting the Ahmed Dahab Pinterest page.
Market feasibility studies explore an entire business, including its products, ideas, processes and campaigns, providing an overall picture of its viability. There are five key components that make up a comprehensive market feasibility study.
In-depth interviews (IDIs) with stakeholders form a key part of any market feasibility study. Talking with all those people who have a stake in the potential business creates a solid starting point for further research.
Stakeholders may be people who are financially invested in the business, key personnel among employees, people working outside of the company who will play a role in ensuring the success of the business, people involved in the local economy, or anyone who can provide valuable feedback in terms of market research.
An open discussion with all stakeholders at the earliest possible stage provides market researchers with information that is essential when evaluating the next steps.
Assessment of Demographic and Analysis of Trends
Once the stakeholder interviews are complete, the next stage for market researchers engaged in a feasibility study is to assess the demographic and analyse existing trends in the market.
Demographic assessments look at factors such as population trends, consumer expenditures, age, education and other relevant statistics which can then be used to understand the market the business is poised to enter. A meticulous trend analysis can then be performed to search for current trends within the relevant industry.
In the modern world, both of these processes can be conducted relatively easily using the search engines, with notes being made of important ancillary data. The short video attachment explains what ancillary data is.
The third stage of a market feasibility study is a quantitative survey. This is where primary data is collected from the people who will be the end users of the product being marketed. This in-depth survey focuses on discovering information such as current usage of similar products, the predicted usage of the new product, and the overall impact the new business is predicted to have on the market. The questions asked of end users during this phase of the market feasibility study will deliver answers that can be used as a foundation for future demand estimates and models.
Stage four of the study is the competitive assessment, which looks at other businesses in the industry offering similar products and services. This portion of the study aims to identify areas where the new business idea can fill a gap or meet a need that other products do not. Activities within competitive assessment may include mystery shopping and personal visits, as well as collecting information that is publicly available. The research team will then make detailed profiles of each major competitor in the market and analyse them, to discover areas where there are product or service gaps where they can then market the new business.
Each of the first four stages is then compiled into a demand model, which includes recommendations and estimates.
Some other types of feasibility study are outlined in the embedded infographic.