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Market Opportunity

Before any investor can give you money, they will accord 25% to the potential of your market. How much knowledge do you have of your market size, in terms of customers and competitors? Do you have a target market? Is your market well segmented? Do you have a buyer persona?

And I’ll just do an intro tonight, give an assignment and by tomorrow we’ll come and share our knowledge together

First, I’ll start from what we call Market Opportunity

By definition, market opportunity is a situation in which a product, service, etc. that is potentially wanted or needed by consumers is identified by a business as not being supplied by rival companies.

 

POTENTIALLY WANTED OR NEEDED

We’ll build around these words while we want to talk on Market size and using that as a keep factor to judge our market opportunity

Its sometimes not so right when entrepreneurs judge how their idea or product will perform in the market by just how beautiful it looks to themselves

Every idea or product design should be subjected to market research, some consumer behavioral factors etc. before you can say it’ll fly or not

And how will you do this, it’s what the knowledge of Market opportunity and research is about

Investors will not just pump money into your idea because it’s beautiful, they want you to analysis the market opportunity it’ll fill and knowledge of the industry

So how do I spot market opportunity?

Like I said earlier

Let someone say “Its a game of Numbers”

One of the best way to test and prove your assumptions when it comes to spotting POTENTIALLY WANTED OR NEEDED product as a Market Opportunity to explore or fill in is simply by using Numbers

Numbers?

Yes. My strongest weapon over the years to judge if my idea will fly or will make a good sense for possible investors to exchange their hard earn money for is to subject it to scrutiny by Numbers

The numbers am referring to are:

  1. Global population
  2. Certain Geographical population
  3. Consumer behavior
  4. Competitors report and analysis

And so on, which we will talk about going forward.

It is a game of mumbers

Market Segmentation and why this is important is because it gives you proper knowledge of potential customers. This will help your firm, your potential clients, and projects you well to external investors (I know most people here wants to raise external fund)

What is market segmentation in simple term?

Market segmentation is the process of dividing up mass/ total markets into groups with similar needs and wants.

The key words there are “Dividing up”

It’s just you breaking down the whole market into small unit which gives you more room to effectively penetrate or assessing milestone

The simple reason for market segmentation is that to achieve competitive advantage and superior performance (most especially for startups like us), firms should:

  1. identify segments of industry demand,
  2. target specific segments of demand ( I remember while I was segmenting my market for palm oil products, I choose Ibadan as a geographic location and household consumers as my final potential consumers), and
  3. develop specific ‘marketing mixes’ for each targeted market segment.

Hope you know the 4 P of marketing mix

  • Price
  • Product
  • Place
  • Promotion

To effectively use these, you need to first segment your market to the smallest possible state

Your full knowledge of those you want to deal with, the location, culture etc. will allow you proper information on price to set, media channel for your advert, how the physical appearance of your products to look like etc.

Why do we need to understand Market segmentation?

  • It gives you better understanding and matching of customer needs: Customer needs differ, and they must be well understood before you can meet them well.
  • It enhances profits for business: because you understand what precise feature the customers want, it reduces your waste and increases your sales during large acceptance. Thereby racking in more profit. But a lack of proper understanding and segmenting your products, waste increases and sales may not be impressive.

Have you ever wondered why some companies produces customized product for just a part of the country?

Example is why you will not see Rolls Royce being advertise every now and there on TV. Because the class of people that could afford it that sit to watch tv

  • It gives better opportunities for growth because you really understand what the market wants and where it is need. You understand your precise target customers.
  • Retaining more customers is easier because your really hitting the nail on the headYou marketing will be more effective because you’re reaching your target customer through targeted marketing communications.
  • You Gain share of the market through segmenting because you are not targeting the whole market but those that falls into your desired class.

Segmenting is important because everyone values things differently. You may be willing to pay one price for tickets to a football game, but someone else may be willing to pay twice as much as you did if they are a big fan of one of the teams.

Also, segmenting allows you to charge more for people who value your solution, and (for now at least) ignore people who do not.

Simple basic ways to segment your consumer market are:

  • Geographics
  • Demographics
  • Psychographics
  • Behaviour

How do I still do this?

‘Its A Game of Numbers’

Start from the total size or population of your market

 

Exercises

#1

You are selling athletic shoes meant for fans and players of football in South Africa. There are 53,000,000 people in South Africa, and 21% of them identify as football fans. What is the total number of potential customers for your shoes?

(A). 21,060,000 people

(B). 15,500,000 people

(C). 11,130,000 people

(D). 8,770,000 people

 

#2

You are selling fertilizer to female farmers in Ghana. There are 22,600,000 people in Ghana, and 60% are of working age. Within that working age group, women account for 53%. Of the working age females, 42% of them are employed in farming.

What is the total number of potential customers for your fertilizer?

(A). 7,180,000 women

(B). 3,018,000 women

(C). 2,506,000 women

(D). 1,120,000 women

 

#3

You are selling portable charging devices for mobile phones in Kenyan cities. Kenya has a population of 45,000,000 people, with about 21% living in urban areas. At least 75% of Kenyans own a mobile phone, but that figure is higher in urban areas. The biggestcause of Kenyans wanting to charge their mobile phones during the day is using the internet. About 25% of Kenyans with mobile phones use the internet.

What is the best estimate of the range of potential customers for your charging device?

(A). 7,000,000 to 7,500,000

(B). 5,000,000 to 5,500,000

(C). 1,800,000 to 2,300,000

(D). 1,300,000 to 1,800,000

 

 

My answers are:

  1. C
  2. B
  3. A
  4. Pop corn (though the corresponding data to pop corn is low compared to others, but there is huge untapped potential for the crop, while output for others are decreasing, pop corn keeps increasing at a high percent)

 

 

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