· is there a demand for the produce?
(Find out the characteristics required of the product and the size and value of the market) · who else is producing similar products?
(Determine the number and type of competitors)
· what is needed to make the product?
(Find the availability and cost of staff, equipment, services, raw materials, ingredients and packaging) · what is the cost of producing a product?
(Calculate the capital costs of getting started and the operating costs of production) · what is the likely profit?
(Calculate the difference between the expected income from sales to an estimated share of the market and the costs of production)
Although telephone or posted questionnaires are possible, in most developing countries it is better to conduct a market survey by going out into areas where the producer expects to find consumers and asking people for their views. There are two types of information that are needed: 1) Information about the product and its quality and
2) Information about how much people will buy, how often and for what price. It is important to think in advance about the type of information that is needed and to ask people the same questions each time, so that their answers can be compared and summarized. This should be a short exercise to keep the costs low and in-depth market research is not necessary for most products. A convenient way of doing this is to prepare simple questionnaires such as those shown below, which can be used by entrepreneurs to remind themselves of which questions to ask. Product quality survey
Consumers are familiar with the types of software products that are already on sale and surveys on these products are therefore easier than those for a completely new food. Questions can focus on what are the things that consumers like or dislike about existing competitors' products. Although initially, new products have the advantage that there will be no competitors, the...