Market Feasibility

Market study is focused on gross market demand both present and future. It highlights the gap between expected market demand and supply in respect of a given product. The advantages of the study are:1. It can evaluate the product by arriving at a year to year estimate of sales. 2. Estimation of scale and utilization of installed capacity. 3. Preliminary input for marketing strategy.

Steps in the market feasibility study

1. Determination of information needs 2. Information Gathering 3. Analysis to reach conclusion.

1.Determination of Information Needs

A. 1. 2. 3. 4. Product and Segments. Product description Specific uses of the product Identification of target groups. Determination of geographical boundaries 5. Substitute products.

B.Demand its determinants

1. 2. 3. 4. 5. Past & present demand-Segmentation. Life of the product Seasonal/Perishable product or not. Feedback-Customers/Distributors about supply position, reasons for satisfaction or dissatisfaction Identifying Establishment of new enterprises Expansion of existing units Development of substitute product, its features and pricing Price trends.

C. Competition
1. Severe or low 2. Rests on price,quality,delivery,aftersales service or combination of such features. 3. Major competitors-Product range, product features, output,marketshare, pricing, installed capacity.

D.Distribution,trade practices & promotion

1. 2. Channels of distribution, commission Trade practices-warranties, after sales service, extension of credit etc.

E. Government Policy
1. 2. 3. 4. Entry/exit regulation Price control if any Product related taxation Fiscal concessions by government.

2.INFORMATION GATHERING
There are three methods 1. Exploratory cum desk study: Secondary Research: It is done through semi structured interviews of concerned individuals and reading of published or unpublished materials. Sources: Business Directories Census Data Survey of Indian Industry The Hindu Manufacturers Association Annual Reports of companies World Wide Web

2.INFORMATION GATHERING
2. Primary Research: It is done to collect the first hand data which may not be available or insufficiently available from secondary research. Techniques: Survey Focus Groups

Information can be collected from a) Present customers b) Potential customers (new product) c) Intermediaries d) Suppliers of Materials, Equipment, Packaging etc e) Product related Tax Authorities f) Regulatory Authorities Steps in primary research: a) Determination of objectives b) Determination of information needs c) Sampling unit and size d) Developing a questionnaire e) Administer of questionnaire f) Analysis

3. Test marketing

For new products, customers often find it difficult to react unless they have an opportunity to watch it perform or to use it.

Limitations
1. Imperfect information: Many a times the information may be inaccurate or exaggerated (Ex.: Power looms ,Machine suppliers). The solution is to cross check the authenticity of information.

2. Population Myth: 3.New product Inadequate knowledge:

4. Imponderables-A fact of life: a) Law and order problem can completely destroy tourism industry b) Industrial unrest c) Power problem d) Recession in the economy e) Infrastructure problem

So, the challenge is risk and uncertainty in business.