Why do I need to do market assessment?
Market assessment is a detailed and objective evaluation of the potential of a new product, new business idea or new investment.
It is a comprehensive analysis of environment forces, market trends, entry barriers, competition, risks, opportunities and the company’s resources and constraints. Whether you are thinking of venturing into a new market or launching a new product, conducting a marketing assessment is the crucial first step in determining if there is a need or a potential customer base for your product.
A well executed market assessment will enable your company to decide where to use limited resources and to go after markets and opportunities that will provide the best returns on investments.
Failure to conduct proper market assessment could result in wastage of resources, missed opportunities, poor returns on investments and even substantial financial losses which could be detrimental to the future of your company.
Remember New Coke?
In 1985, Coca-Cola replaced the original Coke with New Coke. This was done in an attempt to challenge the increasingly popular Pepsi. After just 79 days of public outcry, Coca-Cola had to bring back the original formula and New Coke was eventually phased out.
Coca-Cola spent two years and millions of dollars on research before the launch. They focused on the physical aspects of the product, overlooking the strong brand that loyal customers had come to associate and identify with. They failed to ask the right questions during the research and as a result, collected irrelevant information. You need to remember that it is not enough just to conduct market assessment. You need to make sure that you are doing it right.