The 4 essential components of a market feasibility study
Frequently, a company undertakes a feasibility study when it’s looking to introduce a new business, product, or service or grow its operations.
A feasibility study is intended to evaluate the viability of an undertaking in order to establish whether or not it will possibly succeed.
Through undertaking market feasibility studies, businesses can better validate their idea from ideation to fruition. This is where market research companies in Uganda such as Researchtec, come into play. We can help businesses study the market to establish if the available demand is sufficient enough to warrant the launch of a new business.
In terms of technicalities, a market feasibility study can do more than just evaluate the viability and likelihood of success for your business. It can also reveal the evidence required to bar you from starting a risky project, identify potential pitfalls or just study the nature of the competition you are likely to face.
In order to undertake an effective feasibility study, there are some elements that have to be incorporated. Below are the four essential components of a market feasibility study.
1. Stakeholder In-Depth Interviews (IDIs)
A great place to start a market feasibility study is to engage any associated stakeholders. As professional market researchers in Uganda, we begin this process by organizing between 8 and 12 in-depth interviews with stakeholders who may include important personnel within or without the business as well as market experts.
With each interview running for an average of 25 minutes, close to 5 hours worth of advice and insights will be at the market researcher’s disposal thereafter.
As expert African market researchers, we use this opportunity to better acquaint ourselves with the project and its objectives. Moreover, seeking and incorporating advice from stakeholders can be a guaranteed way to win their favour and approval in the initial phases which can later be drawn upon when their support is required.
2. Demographic Evaluation and Trend Analysis
Understanding your potential target market beforehand you launch a new product or service could be the critical decision that saves you from launching a failing product or business. With 1 in 2 businesses failing globally due to a lack of market need, understanding your potential target market is invaluable.
Through conducting secondary research, Researchtec can help you identify your target market and its demographic structure such as age, gender, consumption patterns, spending habits and income among others that would affect the project’s feasibility. As professional market researchers in Uganda, we are able to study to similarly study industry and market trends that are driving the industry or are likely to influence your market so you don’t second guess who your customers really are.
3. Quantitative Survey
Whereas our Research Analysts may use secondary data for our demographic and trend analysis, the quantitative survey will solely be hinged on primary data that will be gathered from your clientele and target population.
As part of the feasibility study, we will partake in formulating a survey aimed mainly at finding out the existing and anticipated uptake as well as the extent to which the new venture will impact the market. Not every market research company in Uganda will be able to pull this particular process off effectively, as it requires a very nuanced understanding of Consumer Profiling.
The survey, at this point, can be conducted in various ways including online or via telephone where the former is cheaper, faster and produces quantifiable data. The most effective online surveys range between 5 and 30 questions, running for an estimated maximum duration of 7 minutes to avoid leaving the respondents feeling drained.
If undertaking your consumer profiling in Uganda, your chosen market research agency in Uganda should then be able to take the findings from the survey, examine them, detect themes, make deductions and use the information to direct the strategy.
4. Competitive Assessment
This is the last essential and core ingredient of undertaking a market feasibility study. If you are looking to penetrate an existing market in Uganda, there will be businesses already existing and operating in the market whose potential impact on your entry as a new competitor, must be scrutinized.
A market feasibility study in Uganda must therefore include a thorough study of the competition to ascertain the influence they could have on your venture and also identify existing gaps in the industry that could potentially be exploited to gain a competitive advantage.
Secondary data as well as mystery shopping are some of the methods that can be used to obtain information required to carry out competitive analysis in Uganda. Mystery shopping and personal visits to rivals may also come in handy in instances where the information required may not be readily accessible to the public via secondary sources.
Whereas the 4 essential components of a market feasibility are applicable to any business regardless of the industry or objectives for conducting the feasibility, it is pertinent that you choose the best market research company in Uganda and Africa, to tailor these components to meet your individual needs.
A market feasibility study is a useful tool that all businesses need to utilize when venturing into new territories to avoid incurring losses and minimize the risk of failure. It avails you with reliable information and insights to make evidence-backed and informed decisions.
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