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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