Business market analysis


· A fairly reliable estimate of demand for the proposed product.

· Seasonal patterns in consumption, if any

· Other market features affecting demand

· Price elasticity of demand,

· Competitive; major competitors, their market share, the dominant market segments held by them, etc.

· Volume-cost-profit analysis at different feasible levels.

· Type of marketing channels required, type of channels available, comparative costs/advantages of the available channel types.

· The marketing organization required for marketing the product; and what would it cost.

Business/market analysis is the next stage. This stage is of special importance in the new product development process, because several vital decisions regarding the project re taken based on the analysis done at this stage. This stage will decide whether from the financial and marketing point of view, the project is worth proceeding with.

Investment analysis and profitability analysis of the project under different assumptions are made at this stage. The project’s overall impact on the corporation’s financial position with and without the new product are estimated and compared.

The important aspects of business / market analysis are shown above. Only when reliable and comprehensive information on the above aspects becomes available can meaningful estimates of overall profitability of the project be made. And, it is based on the overall profitability picture that the corporation decides to proceed further. The financial estimates will be reliable only if they are based on a fairly accurate demand forecast and related market factors.

Estimating the Demand for New Products

Firms usually take up estimating the demand for the new product as a part of business analysis/market analysts. We had seen that business analysis of the new product needs a reliable estimate of its demand. In the case of new products, there is no past data to rely on. This reality actually makes demand estimation of new products difficult. And many new product ventures have failed due to inaccurate demand projections.