Exploring a potential marketing opportunity is one of the most exciting stages of the product development cycle. It is the time to delve into a customer need or problem, assess how large the business opportunity might be to meet the customers’ needs through a product or service.
No solutions to meet the customer need are proposed at this point. The development of the solution comes much further down the track, once the marketing opportunity has been thoroughly evaluated, defined and the requirements have been articulated in much detail.
So, how do we go about exploring a Market Opportunity?
Step 1: Identify the target market
During the planning stages of the product development process, define the characteristics of the target audience by describing their geographic, demographic, and behavioural profile and skills levels in relation to the customer problem. Consider the motivators and influencers of the potential customer, as well as what their goals might be.
Step 2: Scope the Market Problem
The next step in the planning stage is to identify and describe the target market’s problem that needs solving. There are 3 aspects of the market problem that may be considered:-
- Consumer problem – consumer needs in the B2C market that are unsatisfied
- Product problem – product requirements that unmet by a product or market offering, particularly in the B2B market
- Technology problem – the challenges in the applied science of product development
Step 3: Quantify the Market Opportunity
At this final stage, quantify the financial benefits if the business were to solve the target market’s problem. Calculate the volume of the market; multiplied by the estimate of the value of the benefit to the customer by solving the problem to quantify the value of the opportunity to the business if the problem is solved.
Other considerations when validating whether a market opportunity is worth pursuing is the duration for which the value may be derived for the business and whether the competitive advantage is sustainable.
If the market opportunity looks attractive enough to pursue at this stage, then the data and benefits compiled can then be used when preparing the business case for the solution as well as the Market Requirements Document.