Understand your market

You need to be able to concisely explain what your market looks like. This includes showing an understanding for your competitive landscape, the key products being sold as well as how your product will fit into the space.

 For example, if you are in the market for apples and are selling "golden delicious" you would need to compete with all the apples indirectly (as customers could choose another type of apple) and with other brands of "golden delicious" directly (because you want them to choose you). Indirectly you would also be competing with other fruits because customers could choose another fruit altogether.

The importance of knowing your market is about how to position your product relative to the competition. Once you know what other products and players are on the market, you are in a great position to articulate what your product should be known for. This is called market positioning.
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Key questions to answer are as follows:

• Who are the big players?
• What key products do they sell (incl. quantities if you can estimate them)?
• What are the prevailing pricing structures?
• Why should customers choose you? How are you different?
• What is your pricing versus other players?
• Are there any indirect competitors?

BGH Example
BGH operates in the business services sector with a focus on SMMEs. This market is currently crowded with hundreds of competitors all offering business services. There are also non-profits that play in this market and allow customers to get similar services for free.

Key products being sold in this market are:

• Business Plans
• Company registrations
• BBBEE certificates
• Tax support
• Etc.

Our products differ from these products as we provide packaged solutions based on what the business needs. There are standard product categories (Integrated Start-up Package; Turn-around Strategies; Business Growth Package etc.) aimed at different business's position on the growth cycle which are then customised for the business based on a diagnosis of the business in question.
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