Q.4. Define
Marketing Opportunity Analysis. Describe its process in brief.

ANS:

Market
Opportunity Analysis is a tool used by a firm to identify the attractiveness of
a business opportunity in terms of its feasibility and viability. This is
conducted before undertaking the new product of service Marketing Strategies
and practices to estimate profit and revenue it can generate in a particular
market. The most important factor which is determined during the market
analysis of a product is its Forecasted Demand.

Market Opportunity Analysis helps in answering the following
question:

·       
Which
is the most profitable segment?

·       
What
is the rate of growth of opportunity?

·       
What
is the density and intensity of competition?

·       
What
is the gap which is not filled by competitors’ product?

Market
Analysis if carried out properly leads to creation of marketing intelligence
which will help us in formulating right marketing strategies for right market
segment at right time. It helps in determine how to provide a better product to
the market than being currently offered. This will make customers prefer the
firm’s product over competitors’. Process of Market Opportunity Analysis:

The process
of analysis of market opportunity comprises of the following steps:

1.
Scanning and Analysis Macro Environmental Forces:

The external
environmental factors like economic condition, policies and trends, political
environment, legal system, social and environmental pattern and technological
trends are studied with a view to determine their possible impact on the
business and its market.

2.
Describe the Industry:

The analysis
of industrial environment is done to find its current trend and anticipating
its future. Michael Porter Five Forces Model is a popular tool used to
determine an industry’s long term attractiveness. The five forces which are
examined in this model are:

i. Rivalry among Existing Competitors: The firms in the same industry
producing products which are close substitute of each other. Factors like
investment intensity required to start and sustain the firm, difference in
product characteristics, cost of switching from one brand to another etc. are
the factors to be studied under this force.

ii. Threat of New Entrants: New entrants intensify the
competition more. The greater this threat is the less attractive is the
industry. The threat increases when it is easy to attain economies of scale, less
capital requirement at outset, easy to gain distribution etc.

iii. Bargaining Power of Suppliers: the supplier to a firm may have increased
bargaining power if the cost of switching the suppliers is high for the firm or
substitute are either less in number or are Introduction to Marketing Strategies
expensive. If the firm can undertake backward integration the bargaining power
supplier become less.

iv. Bargaining Power of Buyers: Factors like price, product quality, added
services help. Other factors which may influence the bargaining power of buyers
are number of buyers, switching cost for buyers, product’s performance and its
importance for buyers etc.

v. Threat of Substitute Products: Substitute are the alternative of product
types (not the alternative of a brand) that can perform similar function. The
more similar is the performance of substitute to the main product, higher is
the threat to the firm. Substitute products are generally put barrier to the
product by limiting its price.

Michael Porter Five Forces Model

Source: www.business-to-you.com

3. Detailed Analysis of Competitors:

The firm has to do a detailed analysis of the competitors in
the industry, howsoever big or small, for gaining market intelligence to take
right strategic decisions. Some of the factors to be studies are product
description, strength and weaknesses (relative), market share, strategies
related to pricing, promotion and placing etc.

4. Creating Profile of Target Market:

The firm need to understand and record the essentials
features of target consumers and market. The answering the following questions may
help the firm to draw a profile sketch of target market:

·       
Who
are the potential customers?

·       
What
is their need? Or what are they looking for?

·       
When
do they need?

·       
Which
distribution channel can help reaching them?

·       
What
are the factors influencing their buying decisions?

·       
What
are the trends?

5. Set Sales Projections:

Information collected using different techniques
is deployed for forecasting sale of the product. The data also help in
anticipating most optimistic and pessimistic scenarios for future. Taking all facts
and analysis into account, the most realistic sale projection is recorded for
evaluation purpose.