Before you plan details of how you will create your product, it is advisable that you first verify that your product concept is viable on today’s market:
Is it worth the effort?
- Do people want to buy it?
- Will they pay the price it will cost to make it?
To answer these questions, conduct an Analysis of Market Potential.
Such an analysis may start as a simple trip to several grocery stores and specialty markets. Find existing products that are similar to your concept and see how much they cost. Review the ingredient statements, observe the product claims and flavors offered. Follow up by asking those around you how much they would pay for your product.
Determining the optimal price point that accounts for the competitive space and consumers’ willingness to spend, and that will help cover your final costs will be a balancing act. Understanding the product price point will help with determining the budget parameters including margins, slotting fees, formula, overall quality of product, and packaging costs. Finding a niche for your product will help in making some of these choices.
A more sophisticated analysis can be conducted using consumer insight databases.
Databases can provide information that can guide how you market or develop your product, including:
- Market share
- Target consumer profiles
- Current trends
There are many to choose from, all slightly different. Food Science Extension recommends thorough business planning and does not endorse any specific or particular database. The following is a non-exhaustive list:
- Product Launch Analytics
- Mintel Oxygen and Mintel Food and Drink
- MarketResearch.com
- IBIS World Industry Reports
Some require a fee for use, but note that often academic institutional libraries may have subscriptions for their cardholders. These reports are free from theUMass Business Library.
The UMass Amherst Library is open to the public and invites public use of its collection and services. All Massachusetts residents are granted full book-borrowing privileges at the UMass Library. Most of the Library’s collections of over 400 subscription databases are available to the public on a walk-in basis. This includes many business research databases, such as those listed above.
For more information on Market Analysis