2005 Q4 Market Feasibility Study
In order to acquire financing, a market feasibility study is usually required by investors or lenders prior to launching a project, product or service. At Strategic Performance Group LLC (SPG) we have prepared feasibility studies for many business start-ups, as well as, established companies seeking to introduce a new product or service.
A market feasibility study typically includes two types of research – secondary and primary.
Secondary research
Secondary research is the process of gathering pre-existing information to gain knowledge. Once gathered, we then attempt to process and translate that knowledge, through analysis and interpretation, into usable intelligence. Secondary research can be a useful tool for collection of external information for verification and comparison purposes and provides an overview of the industry in which you will be competing. It typically includes industry size and growth trends.Primary research
Primary research involves gathering and assimilating information directly from the source, through processes such as interviews, written questionnaires, etc. and provides detailed information about the interest level and market strength of the potential product or service. It presents the opportunity to gain very specific feedback against very specific objectives. It is important that the client’s objectives are clearly spelled out so that specific information needs may be addressed.
Once a target list of prospective customers is identified, a market survey is conducted to assess the demand for your product or service. A market survey is usually conducted by telephone, on-line or mail to gain objective feedback. A typical sample size ranges from a minimum of 100 responses to a high end of 350 responses depending upon the precision of the data and your budget. It is critical that the questions for the survey are designed in a professional manner with no biased or leading questions that could compromise the quality of the research.
Armed with the information from the secondary and primary research, an in depth analysis of the data including a report with key findings can be presented to investors, lenders or used by company management to make a GO / NO GO decision regarding the feasibility of launching the project.