Tracking Code

Wednesday, September 29, 2010

Importance of Market Research

Another consideration we must think about is whether someone out there would be interested in purchasing our product or even visiting our retail store. We have to do our market research from two perspectives: who is our consumer and who are our competitors. Who are the consumers we want to attract? Do they have the right demographic profile: age, gender, income level, education, etc. to be able to purchase our product and even enjoy it? Moreover, what do they buy, what motivates them to buy, and why would they purchase your product? Competition can be fierce or weak. We must know what we are up against in the way of product offerings and also become aware of potential changes to product development which may threaten our own product offerings.

SWOT Analysis

In earlier essays we discussed SWOT analysis as a way of investigating our own personal abilities to become an entrepreneur. We can also use SWOT analysis to investigate the competition. Knowing the competition is critical. After all "Business is War!" General Colin Powell or General Schwartzkoff wouldn't commit our military to battle if they didn't know what they were up against. We must know everything about our competition, especially their strengths and weaknesses. You wouldn't go to war and not know what you are up against!

With competitive SWOT Analysis we look at the competition's strengths from every aspect: product, price, distribution and promotion. We also look at their weaknesses. And then we compare our own strengths and weaknesses to theirs. What makes our product or idea so much better than theirs? If we cannot identify a competitive advantage over the competition, or be able to differentiate our product in a meaningful way, then we should not proceed with our idea.

Our business concept must be fully explored in order to be successful. Why would someone want to purchase your product or venture into your store? The question is "Will the customers come, and will they buy?"

No comments:

Post a Comment