Market opportunity analysis is conducted to evaluate market opportunities. Business firms need to conduct external environment analysis with special emphasis on customer requirements and strategies adopted by the competitors.
Philip Kotler identifies three main sources of market opportunity
1. Product in Short Supply: - a firm may identify a product/service which is in short supply. A firm may grab this opportunity to take advantage of the market demand.
2. Modified Product: -The product may have additional features beneficial to the customers. The company can use certain methods this regard;
· Problem Detection Method, where customers give suggestions for improvement.
· Ideal Method, which enables customers to imagine an ideal version of the product.
· Internal Research and Development to launch modified products.
3. New Product: - A firm may develop and supply a totally new product. Consumption chain method can be used, where customers are asked to state steps in acquiring, using and disposing of a product. Companies undertake market opportunity analysis to determine their attractiveness and the profitability of success by asking certain question such as;
1. Does the company have adequate resources to produce and deliver the product?
2. Will the company be able to satisfy the customers better than the competitors?
3. Will the company be able to convince about product beneficial to the target market?
4. Will the company get adequate return on investment?
5. Will the new product impact the performance of firm’s existing product line?
If the answer to the above questions is positive, the marketer may grab the opportunity, otherwise, the opportunity is allowed to pass by;
Advantages of Market opportunity analysis:
1. It helps to identify customer’s needs and accordingly design and deliver the products to generate customer satisfacti0on.
2. It enables a firm to launch new models or products as per the market needs.
3. It enables a firm to face competition in the market because of customer-oriented marketing mix.
4. It facilitates a firm to achieve its organizational objectives such as increase in market share, profits, corporate image, etc.
