Market Feasibility.

A market feasibility study determines the depth and condition of a particular real
estate market and its ability to support a particular development. The key concern of a market
feasibility study for multifamily development is a project's ultimate marketability.

The following process may be adopted to assure the market opportunities of a product.
I. Identifying the Market Potential
It involves an estimation of both the current demand of the product and projection of future
market trends. The prospective entrepreneur will do well to identify (a) specific end users, (b)
major market segments, and (c) potential volume of purchases within each market segment.
Some statistical yardstick may be of quite help in accomplishing this work. To illustrate, a
potential manufacturer of helmets may find out the annual production of two wheelers,
percentage of helmet users and proportion of demand already met.

II. Estimating Cost-volume Relationship to ascertain how various price levels may affect
total sales volume
The price must reflect the value of the product. The entrepreneur may not adopt a uniform
price structure to take care of the sensitivity of the buyer to price changes. The cost-volume
analysis would also facilitate the determination of appropriate economies of scales i.e. optimum
size of enterprise, which has lowest average per unit cost of production and distribution.

III. Sources of Market Information.

Relevant data for market analysis can be gathered from two main sources viz (a) primary
sources such as interviews, mailed questionnaire, survey etc and (b) secondary sources like
government agencies, trade unions, chambers of commerce etc. Whereas the former is costly,
the latter may not meet the requirements of the entrepreneur.
The following kind of data matrix may be quite helpful:
(a) Data relating to general economic trends as revealed by various indicators such as new
orders, house activity, inventories consumer spending.
(b) Market data relating to demand pattern, seasonal variation etc
(c) Pricing data i.e. range of prices for same, complementary and substitute products; base
price; discount structure etc.
(d) Channels of distribution both wholesale and retail.
(e) Data relating to competitors.
To obtain this data, the entrepreneur may either conduct his own survey or approach a
consultant.

IV. Market Testing

It is an important method of establishing the overall feasibility of a new venture, significant
market testing methods include: (a) displaying the product at trade fairs, (b) test marketing to
analyze the receptivity of the product, and (c) sample sales. A market test can provide following
information.
(a) Likely sales volume and profitability.
(b) Sales volume at different price levels.
(c) Soundness of chosen market strategy.
(d) Unknown weakness that need attention.

New Product Ideas Evaluation Methods and Techniques:

For beginning a startup business, the selection of new product to be introduced is very important.
And after deciding a product which is to be launched, a businessman need to evaluate that
particular new product ideas so that it turns profitable for the business. There are some of the
guidance stated below to follow and they are

1. Potential market size:

Whenever a businessman starts his/her business, the first and foremost decision to be taken is
that choosing a suitable product idea to be launched. And to execute that decision, a businessman
need to collect all the information about the potential market size. By understanding potential
market size, a person can understand the exact need of that product which is supposed to be
launched by their company.

2. Potential demand:

Whether it is a startup business or existing business, before deciding unique product ideas for the
business it is necessary to understand the potential demand for that particular product.
Understanding the potential demand for that particular product idea which needed to be launched
by that company makes the profit making easy. Therefore, it is important to understand the
potential demand for the new product ideas so that there won’t be any kind of loss or risk of
failure of that product idea.

3. Keep track of competitors:

By keeping a track of potential competitors a businessman can start eliminating the factors which
can be a potential risk for the company. Starting a new business or starting a chain new product
ideas can be considered as a risk factor because of existing competition for the business. There
may be possibilities that these competitors can be a big threat to the new business idea in the
business market. Therefore, by holding all the details about an existing competition in the
business market makes a smooth flow of launching of the new product.

4. Understanding growing market:

Launching a new product idea is not as easy, it seems, before launching such product idea. It is
necessary to understand the ground work. The most important groundwork for the selection of
the proper product idea would be made by the growing market line. By understanding growing
market, a business will get an idea of the product which can satisfy the needs and wants of the
customers. And end up gaining a profitable deal for the new product ideas which needs to be
launched.

5. A product which is not available locally:

While choosing a product a businessman need to search the business market, whether the product
which you are selecting should not be easily available in the local market. If the product is
available in local market then it can be considered as a potential threat to the business. Therefore,
it is better to choose ideas for new product which is not available in the local market and
ultimately all the potential buyers will be interested to buy that product.

6. Target buyers or potential buyers:

A launching of a new product idea requires a lot of market research, such as understanding the
product and targeting the buyers who will be considered as potential customers for the business.
Target marketing is a familiar element in the business market, it defines that choosing a group of
customers or target who can really be profitable while selling that particular product or services.

7. Deciding a selling price:

Once the process of selecting a suitable product for the business is decided then the second thing
is to decide about the selling price of the product. A selling price of the product is an amount
which is a marginal profit ratio of the actual selling price. Profit is calculated from the amount
which has been deduced the selling price from the actual product price. And ultimately it comes
to the profit which is the main motive of any business.

8. Potential profit ratio:

A businessman should be able to handle all the financial details of the company which is
required to be successful in business market. And a potential profit ratio is a marginal profit
ratio, which a company needs to earn by selling their product to their potential buyers. And at the
end, these profits should meet the marginal ratio of investment so that there should be
considerable profit from the business. Therefore, the potential profit ratio keeps all the selling in
the track of the profit earning process.

9. Varieties of product designs:

A customer needs to believe that the product which has been offered to him / her have another
alternative element as per their taste. While launching a product, a businessman need to be
prepared with other alternative designs of the product to satisfy the needs and wants of the
customers. As we all know that the customer is the main boss therefore, it is important to provide
satisfaction to them by offering different varieties of product to keep them intact with that
particular product and product lines.

10. Offering a suitable discount or sale:

A business can only survive by their returning customers and this can happen by offering them
some kind of discounts in the product or product line with marginal profit. By offering some
kind of discounted product, a businessman will be successful in holding their existing customer
without any loss or damage and it will also attract new customers to the business. Timely update
of product range and price will make things easier for the business.
11. Product size and weight:

A product which needed to be offered to their potential buyers should keep in mind that the
offering product should maintain certain kinds of size and weight. Every product vary in their
size and weight as they vary as per their designs, but a manufacturer need to understand one
thing that he/she should offer a product which should be reasonable with its quality and quantity.
Any kind of difference in their product line can expose their business very badly.

12. Durability of the product:

While manufacturing a product, a manufacture need to keep in mind that they should satisfy the
needs and wants of the customers. As the common thinking goes a buyer likes to buy such
product which relates his price range. For example, a buyer buys a product of a value and all of
the sudden the product bought didn’t delivered itself as it was promised, and at that time the
question comes that the product is having a very poor durability. To avoid such things it is
necessary to keep in mind that quality, quantity and durability with reasonable price are the most
common elements that a buyer or customer expects in their product.

13. Accurate launch time of product:

For example, as the monsoon season starts people starts buying umbrellas. Therefore, if a person
willing to start a business of umbrellas then it is a right time for his / her business. It is very
necessary to understand the right time for the launch of products. Therefore, if a businessman
fails to judge that accurate time of launch, then the business may face serious loss. To avoid such
stupidity a launch of a product should be accurate as per the needs of the customers.

14. Deciding a product type:

A product type is a variety of product which needs to be clear with their nature of availability.
The nature of the product in the sense that whether the idea of the product manufacturing is a
disposable or a consumable. By differentiating disposable and consumable product range, a
business can also differentiate its potential buyers because there are customers who believes in
buying disposable goods and in other side there are customers who only buys consumable goods.
Therefore, product type should be specified so that there will common product difference.

15. Specification of the product:

While choosing a product specification, a businessman should keep himself / herself in the place
of customers. If a businessman could understand the point of view of potential buyers then a
product specification goes smooth as planned. It is necessary to understand all the main elements
of the product. These product specifications help a potential buyer to decide the type of product
which he / she lies to buy and it makes a clear division of its validity.

16. Terms and conditions:

While launching a product line, the launching company need to be clear with its terms and
conditions. These terms and conditions helps a customer to make his / her final decision to
purchase with the trust that the product which a customer is buying will deliver all the elements
of which it was promised by the company. And still if there are any confusions, then a customer
can feel free to contact the company with their valuable complaints.

17. Safety and security:

For example, when a company decides to launch a range of beauty products then it is the
responsibility of the company to deliver the product which is safe and secured of customers’
usage. A beauty product is a range of product which consists of all the ingredients which can
affect customer skill externally. As it is a product of external usage, a manufacturer needs to
keep all the safety matters of that product.

18. Maintaining a startup trend:

A businessman after deciding all the elements of the product and the market should start
focusing on the fact of marketing the product. Recently there is a trend kind of marketing, which
has been introduced. These startup trends help that particular product or the company to create a
difference in the business market. By publishing certain kind of startup trends, a company can be
successful in attracting a range of customers other than potential buyers. Therefore, it should be
clear that every business holds on the ground of marketing of the product.

19. Promotions of product:

As mentioned earlier, startup trends requires promotional activities. These promotional activities
help that particular company to launch their product in a very grand manner to reach most of the
customers. Therefore, a business can start establishing some promotional activities or sample
products which gives an idea about the new product. By these activities the customers will
decide to buy such new product after using such sample products. And these kind of promotional
activities can build brand loyalty among other customers.

To end this discussion, we would suggest all the existing and startup businessman to consider all
the above mentioned elements before starting or evaluating any new product ideas. These
product ideas require patience and perfection to reach its ultimate goal. Every single business has
their own objectives and objectives specifies the main motive of their company. These motives
helps to start a honest and safe product range which can satisfy the needs and wants of the
customers. Therefore, when a business starts thinking about launching a new product idea, he /
she should consider all the above mentioned factors, before starting any business or company.
All the above mentioned elements can guide a businessman things which can favor his / her new
product ideas.

Marketing and Pricing Policy:

Pricing strategies for Entrepreneurs

1. Cost-led pricing

This is the most common pricing mechanism. Start by calculating all the costs involved in
manufacturing the product or delivering the service (variable costs), add the other expenses
(fixed expenses), and add certain margin (expected profit) to arrive at the pricing. The pitfall of
this method is its practically impossible to determine all costs as well as predict volumes
required to recover them. Always keep a margin of 5-10% to be safe, rather than run into losses.

2. Competition-led pricing
For a like to like product or service, determine what is the competition offering to customers and
match them. While pricing is an important factor for customers, you should have a compelling
reason for your customers to buy from you apart from the pricing factor. Once you are aware of
competition pricing, you may also decide to sell either too low or too high, to create a
differentiation for your company.

3. Customer-led pricing

Ask your customer what he or she is willing to pay, and offer it at that price. Absurd as it may
sound, this is one of the most efficient pricing mechanism (think about how you buy ads on
google!).

4. Loss leader

If you cannot match your large competitors marketing muscle, then hurt them a little by offering
low priced items. This will help you attract some customers, and increase your base. However,
be careful - always enter this game knowing when and how to get out.

5. Introductory offer

If you are confident your customers will love you once they try your products or services, then
start with introductory offers. This maybe free or heavily discounted - typically for 15-30 days
after launch or for first 100 customers etc.

6. Skimming

Start as high as possible and keep coming down gradually. At the beginning of your venture, you
may not know how much your customers will pay and how many will customers you will get. It
is always good to recover maximum value at an early stage to ensure you remain cash flow
positive.

7. Odd numbers

Bata's strategy of pricing shoes at Rs 499 rather than Rs 500 has got a lot to do with consumer
psychology rather than MBA methods! Play with your price, keep them at odd numbers which
will ensure customer recall!

8. One number

Remember the dollar store, where everything is priced at 1 dollar. This strategy will be profitable
if you know what are the average prices and what will be the mix of items you are selling.

9. Bundled pricing

If you can bundle a set of products or services, with a perceived value higher than what
customers pay for, it may increase your volumes and reduce your overheads per unit.
 10. Range pricing

For a category of products, you can create a range starting from Rs 100 and go up to Rs 10000.
This will allow you to sell the range of your company products or services to different category
of customers.

The biggest problem in pricing at an early stage company is uncertainty - about customer
traction, volume, orders, payments etc. Many entrepreneurs also feel shy about asking for money
against services, and quite literally are taken for a free ride!

As an entrepreneur, we have to experiment with pricing to overcome our fears. In fact, the same
product can be offered to different customers at a different price!

How? Imagine - whats the probability of getting 1 customer in 1 month - 1% (assuming 1 in

every 100 prospect), whats the probability of getting 2 customers in 1 month - 1% * 1% =
0.01%, whats the probability that they will get to know each other and also share the pricing
details = 1% * 1% * 1% = do your maths!

Distribution Channel:

Distribution channel refers to the network used to get a product from the manufacturer or creator
to the end user.

When a distribution channel is “direct,” the manufacturer is selling directly to the end user
without a middleman. When the distribution channel is “indirect,” the product changes hands
several times before reaching the ultimate consumer. Intermediaries between the manufacturer
and the consumer in an indirect distribution channel might include:

 Wholesaler/distributor
 Dealer
 Retailer
 Consultant
 Manufacturer’s representative
 Catalog
There might be just one intermediary; there might be many.

Direct vs. Indirect Distribution Channels

A company that sells directly to consumers through direct mail, a catalog of its own products, or
its own ecommerce site represents a business that uses a direct distribution channel. For example,
entrepreneurs who create and sell digital products that include workbooks, audio training, and
 online courses from their own websites are using a direct distribution channel. The digital
products go directly from the creator to the customer.

On a larger scale, the beverage alcohol industry uses a multi-tier, indirect distribution channel.
Distillers and wineries sell to distributors, who sell to retailers, who sell to consumers. But while
wineries must use indirect distribution channels to get their wines into retail outlets where
consumers can buy them, many also sell directly to consumers onsite at wineries. Using both
approaches lets wineries reach a mass market through an indirect distribution channel and a
smaller market through direct distribution via on-site retail operations that they own.

Distribution Channel Considerations

Businesses with products should ask a number of questions before determining a distribution
program. Those questions include:

 How does the end-user like to purchase these types of products? Does the consumer want to
touch and examine the product or is it a product that the target audience likes to buy online?
 What, if any, are the local, regional, or national regulations regarding the product category’s
distribution channels?
 Does the customer need personalized service?
 Does the product itself need to be serviced?
 Does the product need to be installed?
 How is the product typically distributed and sold in your industry?
The distribution channel will have an impact on pricing. With indirect distribution, a product that
goes from the manufacturer to a distributor before it goes to a retail outlet needs to be priced at
wholesale so that both the distributor and retailer can mark up the price. With a multi-tier
distribution channel, it looks like this:

 The manufacturer’s customer is the distributor.

 The distributor’s customer is the retailer.
 The retailer’s customer is the consumer.
The manufacturer, distributor, and retailer all need to make money on that product.

The direct-to-consumer price is often the same as the price of a product that has been marked up
several times through indirect distribution. Not offering a “direct to you” discount protects
retailer relationships and offers the manufacturer or creator a higher profit on the product.