PROVING A MARKET
Proving a market for a product or service involves identifying where and how many potential customers exist. First, determine your geographic region. Next, identify potential competitors vying for customers in the same geographic region. Finally, envision your ideal customers and calculate how many of them you will be able to reach. Defining the market -- learning who needs the product/service, where these people are located and how many of them exist -- is critical to successful entrepreneurship.
The first step in determining a geographic service area is to ascertain either how far customers are willing to travel or how far you are able to travel/ship. This may be difficult for online businesses. However, for businesses with a physical location, the next step is to pinpoint the best available spot in relation to exposure, traffic, climate, neighborhood, parking and customer convenience. Be sure to check on zoning to be certain your business fits the zoning codes of your selected site. Public libraries and city halls are excellent places to start hunting for this information.
Every business has competition. If there is no direct competition, consider in-direct competitors who are vying for the same limited number of consumer dollars available in the marketplace. For example, a movie theater and a mini golf course are in-direct competitors for the same consumers and their budgeted entertainment funds. Once the competition has been identified, determine what additional benefits your customer will receive by choosing your product or service over theirs.
Get to know your competition. In some instances it may be possible to cooperate with potential competitors and create relationships that may allow each of you to reach or serve a new and larger market.
Determining who is most likely to buy a product or service can be a difficult task. The best approach is to consider the type of customer likely to yield the most business and then formulate a demographic profile for this ideal customer based on age, income level, spending patterns, address, family compositions or more.
Customer Preference Information gives information about people's lifestyles, hobbies, beliefs, and attitudes. For instance does your customer prefer 100% organic products?
Combining demographic and customer preference information will lead you to a picture of your ideal customer. Western Dairyland can help you access and assess this information. Call (715) 836-7511 ext. 1171 or email to setup an appointment with a business development specialist.