Coach PA

Introduction

When it comes to crafting a strong feasibility study, one of the most important sections is marketing feasibility. As students, understanding this component will not only help you succeed academically but also provide a strong foundation for real-world business applications. In this article, we’ll discuss what marketing feasibility is and why it’s essential, with a focus on target market identification and demand analysis.

But before we dive into marketing feasibility, let’s take a step back and review the main components of a feasibility study (FS). A standard FS consists of five main areas:

• Market feasibility
• Technical feasibility
• Management feasibility
• Financial feasibility
• Socio-economic feasibility

Marketing Feasibility: Understanding the Target Market

The marketing feasibility section evaluates whether there is a demand for your product or service and identifies the market you intend to serve. The first
step is to define your target market or target customers. This is the very first narrative you’ll write in your FS, and it should explain:

• Who your target customers are.
• How you plan to reach them.
• Why you’ve chosen this particular group of people.

Identifying  your target customers is critical because without a clear understanding of who  will buy your product, you risk wasting time, money, and resources.

As a business owner once told me:

“If there’s demand for a product or a specific need in the market that isn’t  being met, and you have access to the necessary supply, then you have the
potential for a successful business. But you need to understand the capital requirements and how to manage the business.”

 A Real-World Example: RC Cola’s Rise in the 2010s

Remember the surge in popularity of RC Cola in the early 2010s? The demand for soda was high among Filipinos, and RC Cola capitalized on this by offering a cheaper alternative to Coke. While Coke’s taste remained superior for many, RC Cola offered a similar experience at a lower price, especially when served cold.

RC Cola successfully targeted the low- and below-middle-class markets, tapping into a large segment of soda drinkers who valued affordability. By identifying the right target customers and understanding the market’s demand, RC Cola was able to shift brand preference, even if only temporarily. This example shows the importance of knowing who your customers are and ensuring there’s demand for the product or service you want to offer.

 Demand Analysis: A Critical Step

Once you’ve identified your target market, the next step in marketing  feasibility is demand analysis. This is a crucial part of your FS  because your financial projections will be based on the results of this analysis. Essentially, demand analysis helps you estimate the number of  customers you will attract in a given period, whether annually, monthly, or daily.

Demand analysis can be done in two ways:

1. Demand and Supply Analysis: This approach looks at the demand for your product while considering the supply offered by your competitors.
2. Market Survey Analysis: This method relies entirely on survey results and market assumptions.

Before conducting your demand analysis, it’s important to have already completed a survey, as the data you gather will be used in the analysis tables.

 The Significance of Demand Analysis

Demand analysis helps you forecast how many customers your business will acquire over a specific period. It also serves as the basis for your projected
sales. Let’s take an example:

If your projected annual demand is 100,000 and your competitors can serve 50,000, the remaining 50,000 represents your demand gap—the potential customers your business could target. This demand gap can be further refined depending on your business goals. For instance, if you think serving  all 50,000 customers is too ambitious for a new business, you could adjust this number to just 10% of the total demand, giving you 5,000 customers  for the year. This number can then be broken down into monthly or daily customers, making it easier to set manageable sales targets.

If you’re using the Market Survey Analysis method, you can base your projections on the buying intentions of your survey respondents. For example,  if 65% of your respondents express interest in purchasing your product and your annual demand is 100,000, your demand gap will be 65,000 potential customers. You can again adjust this based on your business capabilities, similar to the demand and supply analysis method.

Key Differences Between the Two Methods 

• Demand and Supply Analysis includes competitor analysis, focusing on what portion of the market your business can capture compared to competitors.
• Market Survey Analysis is based solely on survey results and doesn’t consider competitors’ supply.

Both approaches offer valuable insights, but your choice depends on the nature of your business and the data you have available.

Conclusion: The Importance of Target Market and Demand Analysis

 In this article, we covered two key aspects of marketing feasibility: target market identification and demand analysis. These two components are  critical for ensuring that your business idea is not only viable but also financially feasible.  Whether you’re currently working on your feasibility study or just starting to learn

about it, understanding these components will help you create a well-rounded and realistic business plan. Stay tuned for our next article, where we’ll discuss how to design your survey questionnaire, which is a key tool for gathering the data needed for demand analysis.

Connect With Us

If you have any questions or would like to engage further in discussions about  feasibility studies, feel free to join our community or reach out via our official Facebook page!

• Facebook Page: Profezor A
•        Facebook Group: FS Students Group Page (by Prof A)

Thank you for reading, and feel free to reach out with any questions or comments!