Your business offering is always permanent in a perfect world, expanding independently of external influences and remaining attractive for millennia. But, in reality, firms are susceptible to marketing changes.
When and how your business grows is heavily reliant on how fast you find a new market opportunity. Therefore, to stay light years ahead of the competition, you must investigate every potential business possibility.
However, it does not always work that way. To identify and capitalize on the best market opportunity for your company, you must undertake a market opportunity evaluation.
So let us first define what marketing opportunity means for your company and how you may capitalize on it.
What Is Marketing Opportunity?
A marketing opportunity is an estimate of your company’s future size and revenue. Market opportunity analysis is a technique for determining the attractiveness of a business venture. It is a critical component of any company’s planning.
The market is evaluated to determine the expected sales and profits from a service or product before launch.
It represents the estimated potential size of your sales market. This implies you’d have to count how many customers or firms are in your target market, as well as how much money you might generate from them.
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When Should You Start Looking For A Market Opportunity?
The emergence of an opportunity cannot be planned, no matter how much we want it. So, ideally, you should frequently assess and evaluate your market to look for a new market opportunity.
However, it is inconvenient to have to monitor every minute movement in the market. Moreover, it is not financially possible to shift the core area to make room for every market opportunity.
One approach to make the marketing opportunity evaluation process easier is to write out your business objectives. Understanding the need of the hour for your organization allows you to narrow your research for market opportunities and to evaluate the best one from them.
How To Identify A Marketing Opportunity For Your Business?
To begin with, you must create a framework to aid in the search for possibilities. This requires understanding your company’s direction of the business and awareness of your company’s resources, assets, and skills.
Once you have a solid knowledge of the business mission and areas of competence, the next stage is to do a market analysis, analyzing customer requirements and how they are already being addressed by competitors. Let’s look at a few ways to identify a market opportunity now;
1: Segmenting Your Customers
To evaluate your demand in the market, you must first define consumer categories with similar characteristics. For example, age, gender, location, educational level, employment, and total income are examples of “hard” factors. In contrast, lifestyle, attitude, values, convenience, durability, and purchase motives are examples of “soft” variables.
Hard factors might aid in estimating the number of prospective consumers a company may have.
For example, a diaper manufacturer should be aware of the number of children under three in a particular nation and the birth rate. If the company can keep a clear record of this, it will identify a new marketing opportunity.
2: Analyzing Customers’ Buying Potential
Segmenting the entire accessible and functional market also assists companies in determining how to develop their pricing strategies. As a new entrant, how you establish your price captures the mood for the following years.
If you set the price too high, customers won’t be able to afford it, and if you put it too low, they might think it is of poor quality.
Analyzing your potential customer’s psychology can inform you how much they’re willing to pay for high-quality goods. Likewise, researching the target market’s average purchase behaviors might give more information on how much you should charge for your products. It can also reveal how the market makes these purchases.
3: Analyzing Your Competitors
In addition to analyzing demand and purchase conditions, supply must also be examined. When exploring possibilities, it is critical to understand the current companies in the market you are or will compete with. Analyzing alternative industries might also lead to opportunities.
For example, when airfares fall, airlines may search for possibilities in customer groups traditionally served by alternative modes of transportation.
Airline companies should investigate how many people travel on long-distance buses and trains, which routes are the most popular, and how much passengers spend on their tickets—this sort of analysis aids in establishing competitive advantages over your competition. You get to identify a new marketing opportunity.
4: Diversifying Your Product Portfolio
Firms should keep an eye on the success of competing companies’ goods that complement their own. Success in your present business offering provides your company the confidence to investigate adjacent market prospects.
In addition, this is a perfect moment to explore the possibilities of broadening your company’s product offerings and portfolio.
This might take the shape of releasing a new product that complements your present product offering, or you may enter an entirely new industry.
Each scenario aims to add a new product to your portfolio. A well-thought-out product that checks all the boxes will appeal to both new and existing consumers.
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5: Analyzing International Market
Entering international markets is the best method for established firms to find a new market opportunity. However, moving to a foreign market requires more than simply translating your brand message to the native language of that nation.
People’s behavior and needs change significantly depending on the corporate environment in which they operate.
Markets in various nations expand at varying rates for various reasons, including differences in economic growth and local customs.
Thus, knowing the progression of a specific product per capita consumption in a given nation might indicate the maturity of the product’s life cycle.
6: Building Strategic Partnerships
Another method to improve your business offers is to form strategic alliances with companies that can supply what you presently cannot.
As much as we’d all like to become a one-stop-shop for every feature imaginable, building anything from scratch can be costly and time-consuming.
Rather than wasting significant time and losing out to other rivals in the same sector, it is better to locate another company with the same purpose as yours and form a healthy partnership with them.
Mergers and acquisitions are other forms of strategic alliances. Therefore, it is critical to understand why you want to acquire another firm and give it other than financial stability.
Frequently Asked Questions (FAQs)
We have given you a few ways to identify a market opportunity for your business. Now, let’s look at a few more questions to help you grasp a better insight into this topic.
1: What Is A Market Opportunity Example?
Ans: IKEA wanted to expand their business to India with their specialization in DIY Furniture, but Indian customers are used to having their furniture assembled from the store. They don’t read the instruction manual either.
So, IKEA identified this demographic detail, and they are currently working on their business approach to win over this subcontinent.
2: What Is Market Opportunity In A Business Plan?
Ans: Market opportunity means the projected amount of your annual revenue and your annual profit in a business plan. You must identify how many customers will fall into your target audience portfolio.
In addition, you also have to determine how many of those customers will generate revenue for your firm.
3: What Is Market Opportunity Analysis?
Ans: You have to analyze the potential market before launching a new product or service in that area. Many people confuse market research with market opportunity analysis, as the two have so many similarities.
So while you conduct market research, you figure out which market opportunities will be effective for you.
Do you think we have given you ample strategies to identify a market opportunity for your business? If your answer is yes, we are glad to be of help to you. But, if you think you still have a few questions to ask us, don’t hesitate to share them in the comment box. Just post your concerns, and we will get back to you with an answer.