Market opportunity is an opportunity to present a new or improved product or service to a target group of consumers. Organizations conduct market opportunity analysis to determine a market opportunity either as part of preliminary business planning or as part of marketing planning after the product or service has been developed. There are several ways that the organization can conduct a market opportunity analysis, but ordinarily the analysis involves seven steps.
Identify your playing field (also known as “value system”) broadly: customers, suppliers, distribution channels and other entities that help bring the product to the market.
Seek ways to deliver value by developing new partnerships, changing the price of the product or extending the reach of the product. Look at the organization's internal processes to see if there are ways to deliver value by customizing products, increasing efficiency or simplifying the product or service.
Identify which products you deliver to the consumer and how well they are meeting the consumer's needs. Review which competitor products are meeting or not meeting customer needs and how. Decide what improvements to make to the products or what new products to create to meet customers’ needs. Study how customers make decisions and why they buy certain products, and determine which products may appeal to the customer and result in the buying decision.
Identify target customer segments. Decide what types of customers you want to pursue and serve. The type of customer is defined based on demographic characteristics and on the customer’s typical buying decisions. For example, a target market of an upscale interior design firm may be people over thirty years old who make over 250 thousand dollars, are trendy, concerned about the environment and live in the urban areas in the Midwest.
Assess resource requirements. Determine what human, technological, financial and other resources it would take to bring the product offering to the market. Take into account the requirements that this offering will pose on its partners: suppliers, distributors, retailers.
Assess competitive, technological and financial attractiveness of the opportunity and decide if the opportunity is worth pursuing. Decide whether what you are offering is different enough from the competitor’s offering; whether the profit margin is high enough and whether the technology that is currently on the market is sufficient to allow the consumer to take part in the offering.
Review the results of the market opportunity analysis and decide if the opportunity is worth pursuing. This process is usually called the "go/no go assessment."