Entrepreneurs
that want to be successful in business will not only concentrate on production/service
but also focus more on how to get their products/services to their consumers
and as well get feedback on the products/services they have offered/rendered,
this act gives room for improvement in the subsequent production/service. To
achieve this, however, there is need to identify various market opportunities. Business
does not just happen! Rather, it is a result of different important decisions
that are taken on a path leading to the development of a business, where the
first step relates to the identification of a concrete opportunity. In
practice, the identification of a new market opportunity may be driven by a specific
demand from the side of a buyer for a new product. However, in the context of a
new market which especially is the case of organic domestic markets in African
countries actors must be more proactive in gathering the needed information
that allows them to judge if there is a new business that they could get
involved in. The following steps/tools are important in identifying organic
market opportunity
1. Marketing Concept Development
In
the process of identifying a market opportunity, most important is to clarify how
a specific business idea might generate tangible benefits to a specific group of
consumers. In
terms of ’marketing thinking’, this comes down to the development of a sound
’marketing concept’, which relates the value that is perceived by a specific
target group of consumers with the costs that occur when providing a specific
good. For producers it becomes interesting as soon as the value
consumers attribute to a specific good is considerably higher than the costs
providing it.
This
is the case for many organic producers, but of course needs to be analyzed individually,
for example in the process of conversion to organic farming.
A
marketing concept is defined by 5 P’s, All these P’s – relating to
product, packaging, price,
place and promotion
– must be
defined such that they make
complete sense to a clearly defined consumer segment and generate optimal
profit. In practice this means, for instance, that high quality must go hand in
hand with a high price (even if production costs of such a product may be much
lower); or that these products should be sold mainly through the supermarket,
which many times stands for high quality and image.
Product: An innovative, high quality product is the basis for
success in an organic business.
Place: The place where a product is sold is of great
relevance to make sure that those consumers who are targeted get to know the
product and have access to it for purchasing. It is important to make sure that
the product is easily found in the store and shelf where it logically should be
placed.
Price: Each product involves production and marketing
costs. However, the product price is much more than ’just’ covering these
costs: it is to visualize the value this product has for the consumer.
Therefore, the price is an important asset to help consumers understand the
value of a product and should be determined based on knowing how much consumers
are willing to pay for this product.
Packaging: The packaging is many times the first thing a
consumer notices about a product. The packaging must not only be appealing but
communicate in an optimal way what the product is offering, making complete
sense to the consumer. In this sense, the packaging with its label must
establish a clear hierarchy of what attributes are most important and visualize
these correspondingly.
Promotion: There are so many products out there, that consumers
don’t have the time to search for products and get informed about them. That is
why promotion is so important, to help present a product to the target
consumers in the right way: in the right time, in the right place and with the
best way to make the consumer understand the valuable attributes it is offering
to him. It is important to come across clearly with one or two messages that
help consumers understand why this product is beneficial to them. Since the
main challenge for sound marketing concept development lies in a good
understanding of potential consumers and the market, marketing concept
development must go hand in hand with qualitative research, which help access and
analyze relevant information.
2. Rapid Market
Appraisal
Doing
a rapid market assessment for agricultural products is an efficient way to obtain
information about any sector and commodities that have market potential, for
example organic products. It aims to rapidly access information that is useful
to identify and analyze market opportunities. The sources of information that will be
approached may vary, including the following potential sources: Available
statistics; Revision of websites; Visits to outlets: supermarkets, street
markets, small retail shops; Face to face interaction with processors, traders,
retailers, consumers; Buying and testing of different products. All
information obtained will serve the same purpose: to assess existing and
potentially new market opportunities. Altogether the rapid market appraisal should enable
users to:
Identify market outlets
for specific products and understand how these products are marketed
Understand how different
products compete with each other
Detect deficiencies in
the marketing concepts of existing products
Develop a hypothesis of
how to better position existing or new products
3. Focus Group
Research
This
research tool relates to a systematic interaction with a group of 8 to 12 consumers
with the idea of understanding consumer perceptions and to validate certain
ideas. In the context of identifying market opportunities, focus group research
is ideal to understand consumers’ purchasing behaviour and confront the invited
consumers to marketing concept ideas and adapt them if they are not optimal
from the consumer point of view. The key for the successful use of focus group
research is the optimal involvement of a group of consumers that represent the consumer
segment that should be targeted (e.g. upper class supermarket shoppers,
middle class shoppers buying on the street market etc.).
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