Module 4

• The Pre-Feasibility Study


  The ultimate goal of doing the opportunity screening is to narrow down the many opportunities into one or two most attractive ones. The next step is to conduct a pre-feasibility study to ascertain the viability of the opportunity. The idea is to focus on a few key items that could make or break the business concept.
• Market Potential 


  Is based on the estimated number of possible customers who

  might avail of the product or service. For a more realistic number, it would help to narrow down your estimation to the relevant population or target customers in the area where you want to operate your business.
• Market Estimation


  The most difficult task of the entrepreneur because of the many ways customers can be divided and segmented
• Segmenting the market


  1. Using a set of demographics (e.g., gender, age, place of residence, income class, etc.)

  2. Determining the target segment
• Determining market saturation

  1. Identifying the number of suppliers and competitors within a confined area

  2. The more suppliers and competitors, the greater the level of saturation
• Entrepreneurs should assess the potential market share. The first thing that the entrepreneur must do is to define the market coverage or reach he or she wants to serve.
• Segmenting the Market


  The most basic approach in determining the target segment is by using a set of demographics (for example: gender, age, place of residence, income class, etc.) If you want to go into more details, then you might have to look into other specific classifications that are relevant to the market you are targeting such as the psychological profiling and lifestyle preferences of the different customer segments.
• Assessing Competition


  Market potential is also affected by the number of establishments supplying and serving your target customers. This process would determine how saturated the market is in the given area of coverage. The more suppliers and competitors there are within a confined area, the greater the level of saturation.
• Estimating Market Share and Sales


  After estimating the number of potential target markets or segments, the next thing that the entrepreneur should assess is the potential market share he or she can attract. Conservatively, the entrepreneur can go for a small market share unless the entrepreneur has a very superior product or service that can immediately command a

  large market share.