Knowledge of the Marketplace

Why Consider the Marketplace? Existing Similar Products Who Is the Competition? Who Are the Users and Who Are the Buyers? What Is the Total Available Market? Target Market Conducting Your Own Market Research

Why Consider the Marketplace? Problem Statement 1 –Some outdoor sports cannot be played year-round in Minnesota because the temperature is too cold in the winter. Statement of Purpose 1 –Prevent the outdoor temperature in Minnesota from falling below 70 degrees at any point during the year. Problem Statement 2 –The average office worker on average drinks two cups of coffee and as a result loses an average of 10 minutes of work time each day. Statement of Purpose 2 –Deliver coffee directly to workers’ mouths from a central location so that they are required to simply connect to the system each day. Are the problems valid? Are they worth solving (justifiable)?

Existing Similar Products Problem: People need to be able to communicate from remote physical distances. What are some solutions? How are solutions similar or different/better or worse? What else is tied to these solutions besides the end user’s device? ©iStockphoto.com

Existing Similar Products Do solutions to your problem already exist? –Why do those solutions fall short? –Why will your solution be more valuable or desirable?

Who Is the Competition? Even with a new device, some competition must exist or there is likely no need for the device. Even a new solution can expect competition from other makers once the new device has been introduced. The competition is not always among makers of the same product (e.g., bikes and cars are different but do compete). Image courtesy of Xerox The Xerographic Process, Chester Carlson

Who Is the Competition? Learn more about the market and your product’s place Ask these questions... –Who /what are your major competitors? –On what basis do you compete? –How do you compare? –Who are potential future competitors? –What are the barriers to entry for new competitors?

Who Are the Users and Who Are the Buyers? Are the users and buyers always the same? Who should be targeted, users or buyers? How does this relate to justifying a problem statement? Identify users and buyers in a graphic organizer.

What Is the Total Available Market? New Ink Pen Design 262,000,000 people in the US over the age of 14 in –US Census Bureau estimate On average, people buy two pens per year. –The Total Available Market is 524 million. A 0.5% market share the first year would represent 2,620,000 pens. At $2 each, that is $5.24 million. How much of that do you think is profit?

The target market should be... –Definable –Meaningful –Sizable –Reachable Why is it important to consider your target market as part of justifying the problem? Target Market iStockphoto.com

Conducting Your Own Market Research Decide what you need to know. Is there something that existing research cannot provide? Common methods include... –Personal Observation –Informational Interviews –Surveys –Focus Groups iStockphoto.com

Table of Contents Why Consider the Marketplace? Existing Similar Products Who Is the Competition? Who Are the Users and Who Are the Buyers? What Is the Total Available Market? Target Market Conducting Your Own Market Research

Image Resources Microsoft, Inc. (n.d.). Clip art. Retrieved from iStockphoto. Retrieved from Xerox Corporation. (2010). Chester Carlson and Xerography from xerography/enus.html