Market Analysis and Market Opportunities

David J Freiman stated in his book What every manager needs to know about marketingÐ'- "Just as one would not build a house on sand one should not undertake a marketing programme that is not built on a firm foundation of market knowledge."

Identifying market opportunities is critical to the development and survival of an enterprise.

When identifying new market opportunities, managers need to examine a variety of factors involved in entering or not entering a market including the market's structural barriers to entry and the competition.

A good market analysis should include:

Ð'* Information on industry strengths

Ð'* Assessment of major competitors and their strategies

Ð'* Review of channels of distribution

Ð'* Wide variety of data on current and potential customers.

Most market analysis begin with a broad study of the overall industry and conclude with a narrow definition of the company's target market.

Philip Kotler in his book "Marketing Management: Analysis, Planning and Control" states the following as the essence of strategic marketing planning:

1. Analysing market opportunities from the explicit and implicit data surrounding us.

2. Developing market strategies in which strategic options are based upon organization's objective, strengths and weaknesses.

3. Shaping the market offering so that the chosen strategy is translated into a complete offering to the targeted customers.

4. Managing and delivering marketing programmes in which the product is delivered to the market place.

Once the opportunity is identified the market analysis should demonstrate why the target market chosen is more favourable than other segments since the company will be investing its limited resources in marketing to that target market.

Market analysis can be broken down into these steps.

1. Establish demand type

2. Assess correct size of the market

3. Analyse the growth rate of the market

4. Establish whether the buyer trends are favourable

5. Understand the stage and structure of the Industry.

6. Research relative market share held by various competitors.

7. Impact of significant laws and regulations

8. Understand the related technological environment.

In an outcome driven paradigm, an opportunity is defined as an outcome, job, or constraint that is important and not satisfied given the products and services that are available today.

In variety of markets, there are segments of consumers who are underserved or unsatisfied. Identifying the opportunities in these segments prior to the competition and devising products and services to this target market will yield success to an entrepreneur.

A footwear company in India trying to reestablish in a high competitive market has been taken as a case study to quantify market opportunities, analysis and techniques that should be employed by the company XYZ.

Market size:

Footwear business is faced with high competition but has also a large potential market. Considering the population size of India and the mix of urban versus rural population, footwear industry enjoys a huge market size. The middle market segment in India is in the range of 300 million people and steadily growing. Similar to this the lower economic segment is equally large sized. Footwear being more of a necessity than a luxury good has a huge consumer base particularly in a country like India.

Target Segment:

Today in India, there is a huge young adult (18 to 30 years) segment that is large and growing. Dealing with this segment will involve volumes but maybe with lower margins. In India it has been found that the top 6 cities contribute for 66% of organized retailing. With the metros already having been exploited, tier II cities and the rural segment