Marketing Assumptions

[Jhordell]

Hello all.

I am in the process of developing a business plan for a new product, and am specifically in the works of the Marketing Research section.

Once you have defined your market, by narrowing down the field based on Age, Gender, Education, Income, Marital Status, Ethnic and religeous backgrounds, and even Lifestyle, Opinion and Interests, how do you then calculate the percentage of your target market will purchase.

For example, after defining your market, you arrive at an understanding that there are 50,000 people in your target area that have been defined as people for whom your product fills a need. You have also defined that they have the disposable income to afford your product, and that you can effectively advertise/ get your product in front of those 50,000 people. How do you determine what percentage of those poeple will take the leap and make the purchase ?

Haven't found much info on this online, so any opinion or insight would be much appreciated.

Thanks in advance =)

[elliotiscool]

"Will they buy?" Is the big question we all want to know when starting a business. There is really no way of knowing exactly how many will buy. Conducting with surveys and talking to people can be a lot of help though as you can get their input and see if they would buy the product.

You cannot take surveys and word of mouth and convert them into an estimated income though. Lets say you surveyed 500 people about some product on the street, and 100 said they would buy it. That would be a conversion rate of 1:5. A sale to 20% of the 500 would not be a realistic answer. You have to hope for the best and prepare for the worst. Instead, expect 25-50 of those people to buy. That would be more realistic.

In conclusion, the best way to see how many people will buy your product is to actually sell it. Until then you will not know exactly how many will buy, and you can only make predictions.

Edit:
If you have a targeted audience of 50,000 potential clients, you will want to do heavy research on how to reach out to those people because lack of exposure to those 50,000 will lead to a loss in your profit.

[LMorgen]

I agree with the above post. You've done all the research now get out there and sell it! And be prepared to be flexible and make adjustments as needed to things like price or sales strategy. Especially in these economic times, flexibility is key.

[Chris Brooks]

I agree with all the comments. Projections and calculations will only get you so far. While they are important going out and selling your product.

I would start small with a soft market that you know will buy just so you have momentum going. After that you can start branching out maybe even using the testimonials for your soft market to help seal the deal.

You could even use the information you gather from testing out your soft market in your plan if you want. Another option would be to use a focus group of some sort to help you with your research in your plan.

[akula]

"Will they buy?"

In conclusion, the best way to see how many people will buy your product is to actually sell it. Until then you will not know exactly how many will buy, and you can only make predictions.

omg, am i dreaming?
finally some great advice on this forum!
yay
all hail elliotiscool
awesome stuff mate

Jhordell, as aforementioned, don't worry about your forecasts
it's all just wishful thinking, daydreaming and fairytales
the only forecast you need to worry about is how many suckers you can get over the coming week to get off their bums and transfer money from their account to your account
you should be able to count these people on your fingers

that's real planning, and everything else is mental masturbation done for the benefit of bankers