6 Ways to Identify Market Opportunities for Business Growth
Having an eye for and pursuing new market opportunities before anyone else does is what will make your business stand out from the competition.
By Sarah Morris
However, not all opportunities are worth investing in. Successful entrepreneurs will tell you that pursuing too many market openings can grow your priority list to unmanageable proportions, and that can lower your team’s productivity. That would consequently lower your ROI. To increase your chances of achieving above-average revenue growth, it is advisable that you only chase after a few promising market opportunities. But how do you distinguish between promising and wild-goose-chase opportunities? The simple answer: Market research!
Market research helps you evaluate the attractiveness of a new market before investing in it. It involves collecting and analyzing data about your product/services and how they would fair in a new market environment. It helps you understand the target consumer’s shopping habits, needs, and purchasing power. Lastly, it tells you how your to-be competitors have shaped the industry in your target market, and how you can disrupt the industry for the benefit of your business.
Someone might ask: How can I analyze a market before venturing into it? Well, you can pay researchers to study and analyze potential markets on your behalf, or you can identify market opportunities on your own through these six ways:
1. Focus more on your existing customers
The new market you are looking for might be right under your nose; your to-be customers could be the very people you currently sell to! Ask yourself: Apart from the items you sell, which other services or products might your current customers need?
For example: If you specialize in baby products (pacifiers, monitors, wipes, toys, diapers, and grooming products etc.), what happens to those babies after they outgrow your products? Before they were born, who dressed their moms through the pregnancy? Answer those questions and you will discover products that relate closely to what you sell now and, when added to your product offering, can help you create a new market for yourself.
2. Observe society evolutions
Consumers of products that your industry produces, not just what you sell but also the items your competitors sell, might encounter changes in their lives that revolutionizes their buying patterns. Observe those changes and evolve accordingly. In China, for example, consumer needs are consistently evolving towards luxury products as the country’s economy grows. So, is your and your competitors’ customers’ spending and purchasing power growing? If yes, that is a new market coming up right there.
3. Direct competition analysis
Poaching customers from under your competitor’s nose is totally legal. You should do it every time you get the chance. Analyzing competition will help you the strengths that they leverage and the weaknesses in their value proposition that you can exploit. Ask yourself: Of the products that existing players in the market are offering, which ones are struggling and why? Are they leaving any gaps that your products can fill? That could be the opening you seek.
4. Research international markets
You probably are struggling to find market opportunities because you are focusing too much on your local market. Cast your net beyond your domestic borders and look for markets that could be having the same needs you solve for your local market. Look for markets where shoppers have the same purchasing power as your current market, if not higher, and whose barriers of entry aren’t too demanding.
One international market that will never disappoint is the Chinese market. The country’s economy is growing and so is the locals’ appetite for western brands. However, if you are to expand and take advantage of the growing number of luxury consumers in China, you will need to hire local Chinese employees. Don’t panic though because you can simplify the hiring process by hiring through China employer of record.
5. Social media
The unsolicited comments and feedback social media users throw around for free can be invaluable to a visionary entrepreneur. They will tell you what they hate about the products your industry offers, the changes they would love to see effected, and why they import instead of buying local. They will discuss their pain points openly, so you just need to look hard enough to see how you can repackage your products to address those pain points.
6. Diversify
This means creating new markets by introducing new products. You will enjoy the first-mover advantage if you are the first one to cater for a need that other providers don’t even know about and probably a need that the target market didn’t realize they had until you showed up. You, however, have to be very creative and innovative to actualize this. Besides, the risk involved in diversifying your product offering is huge, so you need to experiment first before launching the products.
Final thoughts: Reaching your potential markets
Your job doesn’t end at identifying a potential market. It extends to targeting your social media, website, and offline campaigns for the new-found demographic. Strive to understand the values that matter to them and the languages that resonate best with them in order to establish a strong rapport that future competitors will struggle to infiltrate.
