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Questions and Answers
What is a primary characteristic of a good business idea in terms of competition?
What is a primary characteristic of a good business idea in terms of competition?
- Requires minimal startup capital
- Has strong barriers to threaten competition (correct)
- Offers high profit margins
- Easy to replicate
Which factor is essential for the survival of a business idea over time?
Which factor is essential for the survival of a business idea over time?
- Being trendy
- Having a large marketing budget
- Solving customer problems (correct)
- Focusing solely on profits
What is one of the objectives of a market study?
What is one of the objectives of a market study?
- Establish a pricing policy (correct)
- Evaluate the competition's weaknesses
- Identify business location
- Generate immediate profits
How does a market feasibility study primarily differ from a marketing plan?
How does a market feasibility study primarily differ from a marketing plan?
What should be the driving force behind starting a business?
What should be the driving force behind starting a business?
Which of the following describes the contents of a market feasibility study?
Which of the following describes the contents of a market feasibility study?
What is a critical section of a market feasibility study?
What is a critical section of a market feasibility study?
Which of the following is NOT a purpose of conducting a market study?
Which of the following is NOT a purpose of conducting a market study?
What is the main question customers consider when evaluating a product description?
What is the main question customers consider when evaluating a product description?
Which component is NOT part of the N-S-P-P-USP model?
Which component is NOT part of the N-S-P-P-USP model?
What type of demand analysis focuses on future projections?
What type of demand analysis focuses on future projections?
Which of the following best describes the purpose of a product description?
Which of the following best describes the purpose of a product description?
What is an example of actual demand?
What is an example of actual demand?
Which factor is considered in the evaluation of potential demand?
Which factor is considered in the evaluation of potential demand?
What is highlighted in a good product description to differentiate from competitors?
What is highlighted in a good product description to differentiate from competitors?
Which analysis method would best help visualize market trends over time?
Which analysis method would best help visualize market trends over time?
What does local production refer to?
What does local production refer to?
Which of the following terms describes the demand for goods and services by individuals and households?
Which of the following terms describes the demand for goods and services by individuals and households?
What is a reliable indicator of an industry’s overall stability?
What is a reliable indicator of an industry’s overall stability?
Which of the following should NOT be included in the anticipated future market analysis?
Which of the following should NOT be included in the anticipated future market analysis?
Which analysis method can be used to project future demand based on past performance?
Which analysis method can be used to project future demand based on past performance?
What is a critical factor when minimizing risks in business projections?
What is a critical factor when minimizing risks in business projections?
How can one gather information about competitors effectively?
How can one gather information about competitors effectively?
Which type of demand projection is based on geometrical analysis?
Which type of demand projection is based on geometrical analysis?
What is a significant drawback in conducting a supply study?
What is a significant drawback in conducting a supply study?
What should be the main focus when gathering information on goods produced by competitors?
What should be the main focus when gathering information on goods produced by competitors?
Which question is pivotal in evaluating the historical supply growth pattern?
Which question is pivotal in evaluating the historical supply growth pattern?
When forecasting future supply, which data should primarily be considered?
When forecasting future supply, which data should primarily be considered?
How should the predicted values of future supply be presented?
How should the predicted values of future supply be presented?
What is the purpose of the demand-supply analysis?
What is the purpose of the demand-supply analysis?
What does market share analysis measure?
What does market share analysis measure?
Which agency is NOT mentioned as a source for supply data?
Which agency is NOT mentioned as a source for supply data?
What does the term 'discontinued' imply about a product?
What does the term 'discontinued' imply about a product?
Which strategy can be beneficial when exploring new product ideas?
Which strategy can be beneficial when exploring new product ideas?
What should you consider when examining local competition?
What should you consider when examining local competition?
Why are press releases considered valuable for market research?
Why are press releases considered valuable for market research?
What is an effective way to identify local competition?
What is an effective way to identify local competition?
When researching national competition, which resource is suggested?
When researching national competition, which resource is suggested?
What can be inferred from observing businesses that have recently gone out of business?
What can be inferred from observing businesses that have recently gone out of business?
What can you learn from researching local competitor information?
What can you learn from researching local competitor information?
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Study Notes
Business Idea Evaluation Criteria
- Profitability: A good business idea should be profitable and have a high chance of attracting investors.
- Replicability: A good business idea needs strong barriers to entry to discourage competition and ensure long-term success.
- Scalability: A good business idea should be scalable, meaning it can grow and generate more revenue over time. Avoid chasing trends that fade quickly.
- Passion: The owner's passion and commitment to solving customer problems are crucial for long-term success.
Market Study Objectives
- Industry Trends: Analyze trends in the industry to understand its future potential.
- Product Demand: Evaluate the size, nature, and growth of the market for the product.
- Product Description: Define the product's features, benefits, and price.
- Competitive Landscape: Analyze the existing supply of the product and the nature of competition.
- Market Factors: Identify factors affecting the demand for the product.
- Pricing Policy: Determine an appropriate pricing strategy for the product.
- Marketing Program: Develop a marketing strategy to reach target customers.
Market Feasibility (Market Study)
- Unsatisfied Demand: Examines unmet demand for the product and how the project will address it.
- Demand-Supply Analysis: Analyzes the relationship between demand and supply.
Market Feasibility vs. Marketing Plan
- Feasibility Study: Assesses the viability of an idea, campaign, product, or business. Focuses on identifying potential problems.
- Marketing Plan: A detailed strategy for promoting and selling a product or service.
Importance of a Product Description
- Highlight Value: Explain the benefits to the customer to convince them to buy.
- Describe Benefits: Emphasize the benefits that each feature offers to make your product more desirable.
- Unique Selling Proposition: Clearly communicate what makes your product stand out to differentiate it from competitors.
N-S-P-P-USP Model for Product Description
- Helps make detailed product descriptions by focusing on Need, Situation, Person, Product Description, and Unique Selling Proposition.
Demand Analysis
- Potential Demand: Maximum demand consumers could potentially buy in a given period.
- Actual Demand: Current and past demand for the product/service. Use national or regional sales data if specific data is not available.
- Future Demand: Projections of demand for upcoming years.
- Evolution of Demand: Analyze past sales to understand market trends and product life cycle phases.
Assessing Past Demand
- Consumption: Demand for goods and services by individuals and households.
- Importations: Goods produced outside the country and sold locally.
- Local Production: Goods produced or services rendered within the local community.
Forecasting Future Demand
- **Projected Demand Based on ** Past Demand
- Arithmetical: Straight line, Geometric curve
- Statistical: Straight line, Geometric curve or semi-log, Parabolic
Analyzing the Current Market
- Evidence of Demand: Show evidence of a market for your product or service, especially if it is unique or in a specialized niche.
- Industry Stability Indicators: Track employee growth and industry revenue growth to identify industries with potential for growth.
- Employment Trends: Look for positive employment trends within the industry as a sign of demand.
Anticipated Future Market (Based on Industry Trends)
- Narrative Description: Provide a written explanation of anticipated future market growth.
- Supporting Data: Include spreadsheets, graphs, or tables showcasing trends, statistics, and projections.
Predicting Future Market Growth
- Industry Research: Study successful businesses in your industry to understand their strategies and track records.
- Competitor Websites: Analyze competitors' websites to identify product lines, discontinued items, and high-priced items.
- Large Company Strategies: Analyze large companies' new product lines and services to gain insights into industry trends.
- Press Releases: Examine press releases from businesses in your industry to understand their strategies and new offerings.
Competition Analysis
- Local Competition: Identify all competitors within a 50-mile radius, focusing on those within 15 miles.
- National Competition: Analyze competition on a larger scale for businesses that plan to expand through franchising or internet sales.
Evaluating the Supply Growth Pattern
- Increasing or Decreasing Supply: Determine if supply is expanding or shrinking.
- Consistent Growth Rate: Analyze if the percentage increase in supply remains constant.
- Government Projects: Assess the influence of government projects on supply growth.
- New Suppliers: Identify emerging competitors entering the market.
- Private Sector Influence: Determine the impact of private sector initiatives on supply.
Forecasting Future Supply
- Prediction for the Next 3-5 Years: Estimate total supply for the future based on historical data.
Evaluating Supply Forecasts
- Adjustments: Account for external elements that might influence the supply pattern.
- Presentation: Organize forecasts in tabular form with clear and concise descriptions.
Demand-Supply Analysis
- Answering the Demand Question: Use the results of demand and supply studies to determine if there is a market for your product.
Market Share Analysis
- Market Share: The proposed project's share in the total demand for the product.
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