There are lots of factors that can impact a business. Things such as economic, social, political, ecological, and technological changes can influence how companies progress. Marketers and business owners should always study and assess the ever-changing market trends to get a better understanding of what the customers need.
What Is Market Opportunity Assessment?
Marketing opportunity assessment is defined as taking a deeper look at the current state of a market to find out whether there is room to introduce new products, attract new consumers, and improve the overall business strategy to achieve and maintain growth within the company.
Simply put, marketing opportunity analysis expounds on the prospective size of a business’s sales and market.
Which Organizations Need to Perform Market Opportunity Assessments?
All types of businesses and organizations can benefit from performing a market opportunity analysis. Whether you own a start-up, a medium-sized, or a large-scale business, the insights gained will be invaluable.
Both B2Bs and B2Cs should also take advantage of market assessments. A good market audit will help companies tailor their strategies based on the data that they collect. This, in turn, will help entrepreneurs and marketers reach out to their audiences better by giving them exactly what they need.
Here are several possible ways to perform a thorough market opportunity assessment for your business:
Take a Good Look at the Market Profitability
There are three things that you need to pay attention to when it comes to determining market profitability:
- See if your consumers are open to spending their money on the products and services that you offer.
- Research if the market that you are going into shows signs of steady growth.
- Lastly, know the estimated amount of customers you can attract.
Here are a few ways to gather data about your target market:
1. Use social media. Social media platforms such as Facebook can help you determine the size of the demographic group that you are trying to target.
To get an idea of which audience group you are attracting the most, go for paid ads. The results will give you an insight into the age bracket of the people that are engaging with your ads. You can also see other useful details such as their location and gender.
Additionally, you can also use LinkedIn if you are trying to target professionals within the same industry as you.
2. Market research statistics and reports. You can find lots of websites that focus on reporting statistics and data based on detailed market research. These studies usually include the size of the market that your business belongs to and how much the industry is worth annually. Surveys and industry reports can also be found online.
3. Turn to online resources provided by government agencies. Visit your local government agencies’ websites and see if they have any data that can be useful to your business. Just make sure they are relevant to the industry that you are in.
Set and Segment Your Targets
Whether you are selling to a global brand or you cater to a smaller niche, you still have to implement customer segmentation into your strategy. Different customers have different needs. Therefore, getting to know your target personas can help you segment and personalize your messages.
The proper way to segment your audience is to send out surveys and track buying behavior. Then, create multiple personas and personalize your ads for each one. This way, you will have a better chance of your viewers engaging with your ads.
Creating personas will also help you define a specific and relative market strategy. And don’t forget that this is not a one-time task. You need to monitor your ideal customer personas every few months if you want to be up-to-date with the latest market trends and not miss out on opportunities.
Setting and segmenting your targets will not only help you determine how to cater to your current consumers better but will also give you a better understanding of your demand in the marketplace.
Look Out for Similar Opportunities
Keep your opportunities open by looking out for similar business ideas. This doesn’t have to be done right away, but it is important and is something that should be seriously considered.
Growing your company and adding a similar project can help expand your audience, thus leading to increased sales and conversions.
Be Aware of Your Competitors
Analyzing your competitors is always a must when it comes to market opportunity assessment. This will help you gauge whether the demand for the products and services that you are offering is high or low. Know who your competitors are by doing a simple search on Google or on social media platforms. Take note of their strengths and weaknesses and find ways to outdo them.
Additionally, you can also see who their customers are. Take a look at the comments on their posts so you’d know the demographics that you need to consider targeting.
There are two types of competitors that you can analyze:
- Direct competitors. These are businesses that are similar to yours – the ones that offer the same exact products and services that you do.
- Indirect competitors. These are companies that do not exactly offer the same products and services, but their brand can indirectly affect yours. They often provide items that are complementary to your business.
Keep tabs on both direct and indirect competitors so you can always be one step ahead of them.
Perform Purchasing Analysis
Keeping track of your consumers’ purchasing analysis can help you set your pricing. If you price your products and services too high, then chances are your customers will be turned off by this. However, if you price them too low, then your potential leads will probably think that your items are of low quality.
Dive into your potential clients’ buying behaviors and what their patterns are when it comes to buying products similar to yours. Know how much they are willing to pay and what qualities they are looking for in a product.
There are four types of buying behaviors:
- Complex buying behavior – This type of behavior is the one used by customers when they are making a bigger purchase. Say, a client is buying a house or a car. They will take bigger considerations into place, as these decisions will greatly affect their lives.
- Habitual buying behavior – A buying behavior becomes habitual when a person buys an item over and over again. These items usually include essentials such as food, toiletries, and more.
- Variety buying behavior – These people are usually the ones who are open to trying new things. They are on the lookout for products and services that can add value to their lives and thus, they continue to buy different items to try.
- Dissonance reducing buying behavior – This type of behavior is usually displayed by buyers who are hesitant about buying certain products and services. They are afraid that they might regret buying an item, which can make them doubt their purchase.
Execute Environmental Assessment
As we have mentioned, environmental changes can occur in businesses. Recession and climate change are two huge factors to consider when performing market opportunity assessments, as these can directly affect your business.
There are two ways to perform environmental assessments:
- Internal environment assessment – This involves analyzing factors that can directly impact your business. It includes additional technological developments, cultural changes, and new employees or management teams.
- External environment assessment – This affects not the business itself, but the customers that you are dealing with. It comprises additional laws, seasonality, technical changes, and more.
Doing thorough research on environmental factors can help you decide what to tweak in your strategy.
Do Lots of Testing
The last thing that you should do is perform testing on your market opportunity analysis. Implementing the methods above is just the start of your journey – maintaining it should be a major priority.
Here are ways to go about the process:
1. Review your data. This will help you see how many clients you have obtained and how much they’ve bought in the overall sales. Perform these checks regularly and keep up with the trends.
2. Perform a test launch. If you are launching a new product, service, or even a brand new business, then it pays to run a test launch. This will give you insight into what you should change so you can avoid any mishaps during the actual launch.
Keep your audience involved by sending them promotional ads through emails and setting up a landing page. You can also post on social media to keep the anticipation high. Take a look at the engagement and sign-up rates to see if your current strategy is worth pushing forward. If the numbers are low, then go back to the drawing board and consider tweaking some of your ideas.
3. Look for feedback. There is nothing wrong with asking for a little bit of help from your peers. Look for entrepreneurs that have been in the industry for a long time (preferably five years or more) and seek their advice. Discuss your plan and how you’ve come up with it. Ask them if they think it will be effective or if you need to change it up. These pioneers have been in the business for a while and they’ve most likely seen what works and what doesn’t.
Being prepared and well-researched with your marketing strategy will surely pay off. Putting up a business is not just a one-and-done deal, as you have to take so many things into consideration. As we have mentioned above: execute testing, assess the environmental factors, do purchasing analysis, know your competitors, seek similar opportunities, segment your audience, and perform market profitability to leverage your business. Let us know which ones of these tactics work for you!