How to identify untapped market opportunities for your business?
In this article, we'll share 7 proven techniques that will help you spot new growth opportunities, outsmart your competition, and increase your bottom line.
When an organization works in a mature or saturated market, it may find extra prospects in other countries.
Diverse factors, such as inequalities in economic development and local customs, contribute to the varying rates of growth of markets in various nations.
Knowing the evolution of a product's per capita consumption in each country might serve as an indicator of the product's life cycle maturity.
Having knowledge of the size of the market and the number of competitors in different nations will aid in estimating the business potential.
In addition to examining product sales, you can also analyse consumption patterns in more developed nations. For instance:
1. What percentage of consumers pay for their purchases using a mobile device?
2. What is the market share of private labels in a certain industry?
The answers to these questions in more developed nations can serve as markers of the indices' potential in their own nation.
Alternatively, monitoring what occurs in other nations may lead to the development of new products or services that are absent from your existing market.
It is also possible to identify market prospects by analysing environmental changes, with technical and scientific advancements creating new company opportunities.
The proliferation of the Internet and cellphones, for instance, has permitted the emergence of businesses with novel business models, such as Airbnb and Uber.
According to Euromonitor International, the proportion of mobile internet subscriptions to mobile phone subscribers in the world increased from 20% in 2011 to 53% in 2016.
In 2011, only 17% of households worldwide owned a smartphone; by 2016, that proportion had increased to 45%.
In addition to mobile and the Internet, artificial intelligence, robotization, the Internet of Things, biotechnology, and renewable energy sources offer numerous options for business.
Regulatory framework modifications can also provide opportunities. Since June 2016, Chile has mandated that companies label products that are rich in calories, salt, carbohydrates, and saturated fats.
This requirement may create a development opportunity for healthier products unaffected by the new labelling requirements.
Euromonitor International anticipates that product sales in Chile will be affected by product type.
More market research on category and product sales in Chile could assist in discovering areas with growth potential for new labelless products.
Other environmental changes, such as climate change, geopolitical shifts, and financial market fluctuations, can impact market potential.
It is essential to consider conducting market research to acquire insight into the local business environment, guaranteeing that your plan will flourish in a new or developing market.
Consumer segmentation, purchasing decisions, direct and indirect rivals, complementary products and services, industry, overseas markets, and environmental analysis are the eight sorts of analyses that will assist your company in identifying new market prospects.
Using a variety of analyses will enable your organisation to acquire a comprehensive perspective of opportunities and assist in the development of long-term strategic business plans.
Once opportunities are recognised, businesses must swiftly formulate a plan.
Develop a value proposition, organise the commercialization chain, and estimate costs, revenues, cash flows, and finance requirements.
Not all identified market opportunities will be successful, but exploring will reveal the viability of each.
Pilot testing of new products, services, or business models can be conducted in controlled environments to minimise the costs associated with failed prospects.
Among the dangers of pilot testing is revealing your plan to competitors. This danger must be weighed against the risk and expense of launching and failing to sell a new product on a global scale.
During pilot testing, most experiments will fail, but a few will succeed and be scaled up.
Euromonitor cites the example of Coca-Cola Life launch within the Low-Calorie Cola Carbonates category, in 2013.
It was a pilot test that began in Argentina and Chile, with subsequent launches in the United Kingdom, Sweden, Australia, Switzerland, Japan, and New Zealand.
In the majority of these markets, Coca-Cola Life sales did not increase as anticipated. According to Euromonitor International, Coca-Cola Life's value share in 2016 was less than 2% in Australia and less than 4% in the United Kingdom.
Coca-Cola thus dropped the brand in these two nations. In other nations, comparable steps have been announced, such as the discontinuation of a product line or a decrease in production.
Pilot testing helped Coca-Cola evaluate the viability of Coca-Cola Life, as a failure on a global scale would have resulted in greater financial and brand-image losses.
To comprehend your demand, you must define consumer segments with similar attributes.
These factors may be "hard" variables, such as age, gender, place of residence, level of education, occupation, and income, or "soft" variables, such as lifestyle, attitude, values, and purchasing motivations.
Hard factors might aid in estimating a business's prospective client base. For instance, a manufacturer of diapers should be aware of the number of children under the age of three as well as the country's birth rate.
Price, prestige, convenience, durability, and design are a few examples of soft variables that can be used to determine the factors that lead to purchasing decisions.
Aguas Danone, an Argentine bottled water company, exemplifies how segmentation can aid in identifying market potential.
Prior to a few years ago, the company's revenues were declining and it was searching for a new product. Aguas Danone identified two motivating factors for the consumption of non-alcoholic beverages: health and taste.
Bottled water was perceived as healthy but did not offer the attribute of good taste.
Soft drinks and juices tasted good but were perceived as highly caloric.
The company realised there was a market for healthy beverages with both flavour and taste.
As a result, they successfully introduced flavoured bottled waters Ser.
According to data from Euromonitor International, Aguas Danone has dominated the Argentine market for Reduced Sugar Flavoured Bottled Water since its inception in 2002, surpassing Coca-Cola and Nestlé.
In 2016, Aguas Danone maintained a 57% value share of the off-trade market for Reduced Sugar Flavoured Bottled Water.
Purchase scenarios must also be examined to uncover expansion opportunities. Consider the following questions while examining purchase analysis:
1) When do people buy our product or service?
2) Is it when they need it?
3) Where do consumers make purchases?
4) How do they pay?
Examining sales channels, payment methods, and any other purchasing-related circumstances can teach you how consumers make purchases and how to position your goods appropriately.
Introducing additional shopping options may attract new customers.
For instance, vending machines selling snacks such as yoghurt and individual drinks have been installed in Santiago de Chile's subway, increasing consumption on the go.
The acceptability of a variety of payment methods should also be investigated. For instance, Amazon introduced Amazon Cash in the United States, allowing people without credit cards to shop online by adding credit to their Amazon accounts.
It is also important to analyse supply.
When evaluating opportunities, it is important to be mindful of the existing competitors in the market where you compete or will compete.
Three useful questions are:
1) What are the products and brands of our industry that are growing more significantly and why?
2) What is their value proposition?
3) What competitive advantage do we have over them?
For example, SKY airline, competing in the Chilean market against a notably positioned brand such as LAN, found there was an opportunity to differentiate itself with a low-cost model, which until then had not existed in Chile.
SKY lowered its costs, by eliminating complimentary food and beverages for all passengers during flights and in doing so lowered its ticket prices.
This helped the compFor instance, SKY airline, operating in the Chilean market against a prominently positioned brand such as LAN, saw a chance to differentiate itself with a low-cost model, which did not exist in Chile prior to that time.
SKY cut its ticket pricing by eliminating complimentary food and refreshments for all passengers during flights, hence reducing its expenditures.
According to Euromonitor International, this allowed the firm to raise its proportion of passengers transported from 10% in 2008 to 20% in 2017.
It’s also possible to identify opportunities by analysing substitute industries.
For instance, because of lower prices, airlines may seek opportunities in consumer categories now served by alternative modes of transportation.
Airline companies should investigate how many people travel on long-distance buses and trains, which routes are the most popular, how much travellers pay for their tickets, the occupancy rate of long-distance buses and trains, and what it takes to convince a current passenger of buses or trains to travel by plane instead.
This form of analysis assists in establishing competitive advantages over indirect competitors and identifies further growth potential.
The performance of complementary items from other companies should be monitored by businesses.
For instance, a packaging company should track the sales of products that it could potentially package, whereas a coffee machine manufacturer should collect data on the progression of sales for various varieties of coffee.
When making investing selections, it is important to evaluate the trends in adjacent areas. The performance of complementary items from other companies should be monitored by businesses.
For instance, a packaging company should track the sales of products that it could potentially package, whereas a coffee machine manufacturer should collect data on the progression of sales for various varieties of coffee.
When making investing selections, it is important to evaluate the trends in adjacent areas.
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This article was inspired by Chehtman. (2022, November 22). 8 Ways to Identify Market Opportunities for Business Growth. Euromonitor. Retrieved March 13, 2023, from https://www.euromonitor.com/article/8-ways-identify-market-opportunities-business-growth
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