Market research is very significant for business success. A good business plan can be prepared once the entrepreneur analyzes the market by conducting market research. The company evaluates customer demographics, purchasing habits of consumers, buying cycle and willingness of the customer to adopt and buy new products and services. The process of business plan preparation starts with an understanding of the market and opportunities inherent in it. The research process requires questioning about various aspects and situations of a business market and get the answer of it to design the best suitable business idea that will satisfy the needs and wants of the company. The viability of a business plan can be analyzed through market research and analyzing opportunities available. The market opportunity report contains the answers to some market-oriented questions, which are as follows:
- What is the size of the market?
- What is the market trend, is it growing, stable or declining?
- What segment of the market is to be targeted and what demographics and behavior make up the targeted market?
- What is the demand trend of specific products and services, whether is it rising or falling?
- How could a company differentiate from other competitors in terms of cost effectiveness and quality of products and services offered?
- What is the potential price of the products and services offered that the customer would be willing to pay?
The opportunity of the market can be determined by understanding the depth of the market, which can be ascertained as follows:
- Potential customers: Potential customers are people in the market, that a company wants to target to attract them to buy goods and services offered by the company. The total market is not significant for a particular company, a company or goods, and services offered by it can satisfy the needs and wants of a specific customer only. Which has to be analyzed on the basis of their demographics such as age, gender, educational qualification, taste, and preference, etc.
- Total households: The determination of a number of total households of the market is very significant and it depends upon the type of business. The business can determine the total population in the area by knowing the number of households.
- Median income: The spending ability of a target market is significant to know, whether the population has sufficient spending power to buy enough set of products and services. Through the analysis of Median Income of the market a business organization can evaluate the potential profitability to be generated. The spending power of potential customers also depends upon the locality in which they are residing. Thus, a business organization must select the location of their business site or in which they will supply the goods and services according to it that will increase the possibility of generating higher profits.
- Income by demographics: For the deeper analysis, a business organization can also determine the income level of the age group of the total population which would be targeted. The income level can be categorized in the form of age group, ethnic group, gender, etc. The senior citizens of the market may have less income to spend as compared to the population of middle-aged groups. The company will determine the current spending of customers on a particular set of products and services through market analysis, it will provide the knowledge of the potential of the business, they are planning to establish.
Thus, Market opportunity report provides information of all the perspectives about the market that provides opportunities to the business organization to generate higher profitability and run a sustainable business.