| ||
| ||
|
Marketing Information | |
| Domain Names | E Books | Email Marketing | Ezine Marketing | |||
| Internet Marketing | Marketing | PPC Advertising | SEO | |||
| Traffic Building | Web Design | Web Development | Web Hosting | |||
| ||||||
|
| ||||
|
How to Size an Emerging Market
In developing their business plans, companies of all sizes face the challenge of determining the size of their markets. To begin, companies must present the size of their "relevant market" in their plans. The relevant market equals the company's sales if it were to capture 100% of its specific niche of the market. Conversely, stating that you were competing in the $1 trillion U.S. healthcare market, for example, is a telltale sign of a poorly reasoned business plan, as there is no company that could reap $1 trillion in healthcare sales. Defining and communicating a credible relevant market size is far more powerful than presenting generic industry figures. The challenge that many firms face is their inability to size their relevant markets, particularly if they are competing in new or rapidly evolving markets. On one hand, the fact that the markets are new or evolving is the reason why there may be a large opportunity to establish them and become the market leader. Conversely, investors, shareholders and senior management are often skeptical to invest resources because, since the markets do not yet exist, the markets may be too small, or not really exist at all. In developing over 200 business plans for emerging ventures, venture capital firms, SMEs and Fortune 500 spinouts, Growthink has encountered the challenge of sizing emerging markets numerous times and has developed a proprietary methodology to solve the problem. To begin, it is critical to understand why traditional market sizing methodologies are ill-equipped to size emerging markets. To illustrate, if a research firm were to use traditional methods to size a mature market such as the coffee market in the United States, it would consider demographic trends (e.g., aging baby boomers), psychographic trends (e.g., increased health consciousness), past sales trends and consumption rates, price movements, competitor brand shares and new product development, and channels/retailers among others. However, conducting such an analysis for emerging markets presents a challenge as several of these factors (e.g., past sales, demographics of the customer when there are no current customers) don't exist because the markets are presently untapped. The methodology required to size these new markets requires two approaches. Each approach will yield a different approximation of the potential market size, and often the figures will work together to provide a solid foundation for the market's potential. Growthink calls the first approach "peeling back the onion." In this approach, we start with the generic market (e.g., the coffee market) that that company is trying to penetrate, and remove pieces of that market that it will not target. For instance, if the company created an ultra high-speed coffee maker that retailed for $600, it would initially reduce the market size by factors such as retail channels (e.g., mass marketers would not carry the product), demographic factors (lower income customers would not purchase the product), etc. By peeling back the generic market, you eventually will be left with only the relevant portion of it. The second methodology requires assessing the market from several angles to approximate the potential market share, answering questions including: ?Competitors: who is competing for the customer that you will be serving; what is in their product pipeline; once you release a product/service, how long will it take them to enter the market, who else may enter the market, etc. ?Customers: what are the demographics and psychographics of the customers you will be targeting; what products are they currently using to fulfill a similar need (substitute products); how are they currently purchasing these products; what is their degree of loyalty to current providers, etc. ?Market factors: what other factors exist that will influence the market size - government regulations; market consolidation in related markets, price changes for raw materials, etc. ?Case Studies: what other markets have experience similar transformations and what were the customer adoption rates in those markets, etc. While these methodologies are often more painstaking than traditional market research techniques, they can be the difference in determining whether your company has the next iPod or the next Edsel. As President of Growthink Business Plans, Dave Lavinsky has helped the company become one of the premier business planning firms. Since its inception, Growthink has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share.
MORE RESOURCES:
Marketing - Google News |
|
|
|
RELATED ARTICLES
Client Attraction Technique #3: Study the Competition! One very powerful and cost-effective marketing strategy is to study the competition. This is an important exercise, as essentially it allows you to find out as much as possible about the opposition - how best they operate, what they lack and then how to capitalise on it!Study the Competition OfflineStart by reviewing the Yellow Pages, the Thomson Local or even go online to determine what you're up against locally (and if applicable nationally). Build Your Business Through Networking Here's one of the most important success principles you'll ever learn. It is this: The more people you know and who know you in a favorable way, the more successful you will be in your business or profession. Self Promotion Brings Business Success Your business success depends on your ability to promote your services, your products, and yourself. Fortunately, promotion is simple. Promotional Bags: Your Company Details on Parade The trick to a good promotion is to attach your company details to something useful. Now, there is "private useful" like the promotional toothbrush you use in the privacy of your own bathroom, and there is "public useful" that you use out there where everyone sees you inadvertently parading the promotion. Do You Know Where Your Email Address is Today? Having people go to your website is not always easy: remind them with a special business card.Whether you understand it nor not, the web is likely here to stay; those businesses that do not yet have a web presence, or at least email addresses, are likely to get left in the dust. How Much Is Your Popcorn Worth? Powerful Lessons In Marketing & The Psychology Of Selling - Part 6 How Much Is Your Popcorn Worth?: Powerful Lessons In Marketing & The Psychology Of Selling - The Final PartAdditional Lessons from Popcorn MarketingI'm assuming that the movie theatres have tested their price point and figured out what the highest price is that they can charge and get away with - the highest price the market will be willing to pay.And, that's what they charge for their popcorn. Two Steps to Improving Your Marketing Success Since the human brain seems to be able to focus on only one thought at a time, it's difficult to evaluate an advertising idea from the perspective of both a marketer and a customer. That's why it's necessary to use a two-step process when developing highly effective ads, sales letters, web pages, and e-mails. Design Does Matter The idea that good design can improve how people perceive your business has long been a part of a designer's sales tools.They try to convince you that by improving your image, maybe creating a new logo or changing the way you communicate with your customers you can somehow improve sales and improve your bottom line. First to Market Theory AGE OLD QUESTIONBusiness scholars throughout the planet keep asking the same question and have come to the conclusion that being first into the market place is preferable. Preferable to what? They say every product has a life cycle? What about milk? If that is true and many academia will classify products and services in order to make a point and simply lump them all together. Five Deadly Small Business Marketing Mistakes Here are some marketing mistakes that take a heavy toll on small businesses. They have been very harmful to businesses at any stage, but especially harmful for new businesses. Trade Show Promotional Products - Boosting Booth Traffic I was about seven or eight years old when I learned the value of promotional items at trade shows. I just didn't know it yet. Has the Internet Killed Off the Direct Mail Baron? Over the past 30 years, direct mail has been responsible for generating vast amounts of money for businesses and individuals alike, but is it still an effective means of marketing?The short answer, in the short term, is yes. But the Internet has without doubt diluted the power of pen on paper and will continue to do so, until only a few die-hard individuals and the glossy brochure brigade, are left to pick the bones of an industry once plump and ripe for plucking and plundering. The Advantage and Consequences of New Economy Marketing Some of the research that has been done today gives us a lot of information on the values of today's society. What I'm referring to is a lifestyle in which there is more to do in generally less time in which to accomplish it. How to Get a 100% Return on Your Marketing Investment Guaranteed! One of the most effective ways to market your products/services is to create strategic alliances. Strategic alliances are partnerships with companies who sell to a client base similar to yours but they sell different products/services. Are Corporate Awards and Corporate Gifts Beneficial for Your Business? With the increased challenges that all companies are faced with, many corporations have implemented various initiatives to continue to grow corporate earnings and shareholder value, some have discovered the strategic value of corporate awards and corporate gifts. From the boardroom to the frontlines to the client across the country, corporate awards and gifts offer many benefits to enhance performance. How to Put the Profit Producing Power of Couponing to Work for You Coupons have proven themselves to be highly effective sales tools for every conceivable size and type of business.Because coupons "pull in the business" they have gained remarkable acceptance and popularity among astute marketing managers. Make More Sells With Colors How Colors Effect Our Emotions?One of the most interesting things to me is how colors effect the way we think and feel. They effect us whether we are aware of it or not. How Testimonials Can Put You in the Spotlight If you need evidence that a testimonial or referral can help you, let me tell you a personal story:My friend Dave raved about his boss all the time. "She knows I'm still in school," he said, "so she always asks about my schedule. Why Instant Gratification Marketing Condemns Businesses To Losing 90% Of Their Potential Customers Most businesses target only people "ready-to-buy". These hot prospects are "Now Buyers" because they've been inching closer to a decision for some period of time. Want To Be A Stronger Marketer? Work Your Marketing Muscles! You want to be more flexible? You have to stretch your muscles. Want to be physically stronger? You have to find a way to workout and build your muscles.
|
| Domain Names | E Books | Email Marketing | Ezine Marketing | |
| Internet Marketing | Marketing | PPC Advertising | SEO | |
| Traffic Building | Web Design | Web Development | Web Hosting |
|
Home | Site Map | Traffic Building
| Free
Classified Ads | Free-For-All
Ads | Reciprocal
Links | Search
Engines | |
| Copyright © 2006-2007. The Highland Marketing Group. All Rights Reserved. |
|
| ||
|
