55. Market Analysis

Here is where you make a market analysis in volume. First, you need to measure the dimension of the market:

Volume and dimension – There are big markets (they make millions of dollars), niches (the potential is very limited, because they are small markets), micro-niches, average markets and the others in between. Find out where the market of your company is in.

Number of buyers and quantity bought – Small number of buyers implies a more individualized marketing (business-to-business) and huge number of buyers implies a lot of mass marketing. There is also small number of buyers who buy a lot, and huge number of buyers that buy just one or two products. You need to know this information.

Consumer life value – It tells you weather the consumer is faithful to the product of this market or no. Nowadays, consumers tend to experiment a lot with products in some markets and it’s important to find out if your market is one of them.

Open or closed market – Is there room for more companies (open market) or no (closed market).

Fragmented or concentrated market – Does the majority of the market share go to just a few companies (for example, companies that sell computer operative systems) or is it spread in thousands of small companies (for example, bookstores).

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