An assessment of the market should be done in a systematic manner. The process can be broken down into the following steps.
First, understand market conditions.
Gather basic information about your intended market - size, competition, potential customers and income levels. You will also need information about the business environment – political, economic, social and technological.
Next, identify market risks and opportunities.
Gather more targeted information about potential risks or opportunities in the potential market. Other information required includes data on market growth, trends, opportunities, risks and key players in the market.
Finally, you need to analyse the overall picture.
You need to put together all the information you have collected and determine if your business venture is still viable. Once you are confident that you should proceed with the venture, you can start developing your marketing plan.
Act on It
Red and Green Flags
As you analyze market conditions, environment forces and key players in your target market, you should identify negative issues (red flag items) that are areas of weakness, which generate risks. You should also identify positive issues (green flag items) that are areas of strengths, competitive advantages or even good timing, which favours entry into the market.
Make an objective assessment of all risks and opportunities before making a decision to venture into prospective markets.