Perhaps the most challenging problem in developing new enterprises is assessing the Market. It is especially challenging for farmers who have not had an active role in marketing their products before. The first step is to understand that there it is not a crystal ball that can predict future markets with certainty. However, market research can provide information that will make projections about the future far more accurate, and it can help immeasurably in developing a successful marketing strategy.
It is also important to know that you don’t need any specialized knowledge or advanced technical training to do useful market research. Like any other information gathering process, it is a matter of asking the right questions and looking in the right places for the answers. The goal of market research is twofold:
(1) to project the volume of sales and the prices you might reasonably expect to achieve with a new enterprise (information you will need to analyze profitability and cash flow potential); and
(2) to gather information about potential buyers and competitors that will help in developing a marketing strategy. Some important questions that can be answered through market research include:
- What is the total current size of the market for this product (or service) within a given market area?
- How many competitors are there for this market? What are their strengths and weak- nesses?
- What type of buyer is being targeted?
- What prices can you expect to receive for a given size and/or quality ?
- What trends do you see in consumption, competition and pricing?
- What are the characteristics of consumers in the target market (in terms of age, income, lifestyle, gender etc)?
- What are they looking for and where are they looking for it? How can you do a better job than your competitors in meeting their needs?
- What proportion or share of the total market might you expect to capture ?