Knowledge of the MarketplaceKnowledge of the Marketplace

Knowledge of the MarketplaceKnowledge 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?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 ProductsExisting Similar ProductsProblem: 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

©iStockphoto.com

Existing Similar ProductsExisting 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?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?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?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?What Is the Total Available Market?

New Ink Pen Design• 262,000,000 people in the US over the age of 14 in 2010.

– 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 MarketTarget Market

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Conducting Your Own Market ResearchConducting 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

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Table of ContentsTable 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 ResourcesImage Resources

Microsoft, Inc. (n.d.). Clip art. Retrieved from http://office.microsoft.com/en-us/clipart/default.aspx

iStockphoto. Retrieved from http://www.istockphoto.com/index.php

Xerox Corporation. (2010). Chester Carlson and Xerography from http://www.xerox.com/innovation/chester-carlson-xerography/enus.html