MARKET NEED

ANALYSIS
LESSON 1.2.1
Define the Market Need for the New Business
In analyzing the market need , the following questions should be asked:

• Who will get interested in my product?

• What does the market need or want?
• Who is buying the product? What and how much? Or how,
where and why they are buying those goods or services?
Market Analysis
• A market analysis is a qualitative and quantitative
assessment of a market ability to respond positively. It
looks into the size of the market both in volume and
in value, the various customer segments and buying
patterns, the competition, and the economic
environment in terms of barriers to entry and
regulation in the industry.
 How to do a Market Analysis?
1. Demographics and Segmentation

Demographics is the statistical characteristics of human population (as

age or income) used especially to identify markets; a market or segment of
the population identified by demographic.

Segmentation is the process of dividing into segments with similar

characteristics. Markets are needed to slice it into different segments. It can
be segmented through its size (number of potential customers) and the
value of the market. Estimating the market value is often more difficult than
assessing the number of potential customers.
2. Target Market

This is the type of the customers that are focused within the
market. It is focused on the more qualitative side of the market
analysis by looking at what drives the demand.
 3. Market Need

Investors must determine the needs of the market

through analysis based from research conducted
focusing on their needs. Identify what the customer
wants to classify their needs.
 4.Competition
Determining the competitor’s positioning and describe their
strengths and weaknesses.

Analyze competitors’ angle to the market in order to find a

weakness that company will be able to use in it’s own market
positioning. One way to carry the analysis is to benchmark
the competitor against each of the key drivers of demand for
the market (price, quality, add-on services, etc.) and present
the result in the table.
 Barriers to Entry
These are the hindrances or something material that
block or intend to block passage. It is a natural formation
or structure that prevents or hinders movement or action
or even separates the new businesses.
 Here are a few examples of barriers to entry:

1. Investment (project that requires a huge investment)

2. Technology (application of the combination of scientific and
engineering knowledge)
3. Brand (the huge marketing costs required to get to a certain level of
appreciation)
4. Regulation (licenses and permits in particular)
5. Access to resources (exclusively with suppliers, accessibility of
suppliers)
6. Access to distribution channels (exclusively with distributors,
availability of intermediaries)
7. Location (place, venue where the business is located)