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Target Market Segments

1. In which primary target market segments are the majority of your customers? If possible, indicate the percent of total sales, which you think will come from each sector.
  % of Sales  
Consumers (individuals purchasing for personal or family use)
Companies (specific industries )
Government
Education, level
K-12
Post Secondary
Home Learning
Other
Organizations and Institutions:
2. What are the top 2 market segments you will target with your new product or service? Briefly describe the type of customer, as well as the geographic region. (For example: All parents and grandparents of young children, in USA & Canada.)
Description of Customer Geographic Location
3. Once these markets have been established, what would be the next 2 market segments/regions you would pursue?
Description of Customer Geographic Location

Buyer Behavior

Note: If you have diverse target market segments, you should do this exercise for each segment, starting with your biggest potential market segment.

4. Do your customers buy for
5. Do they normally buy
6. How frequently would a customer repurchase your product or service?
Over 50 times a year (approximately weekly)
11-15 times a year (approximately monthly)
6-10 times a year
1-5 times a year
Once a year
Other
7. Who makes the buying decision?
Individual
Committee or Group
8. Who influences the buying decision?
9. Where do they normally shop or order their goods and services?
Retail
Convenience stores
Boutiques & small stores
Major chain stores
Warehouse/discount stores
Catalogs (mail order or toll free number)
TV shopping channel
Internet shopping
Other
Wholesale & Business-to-Business
From Manufacturer/Service Company, directly
Wholesale distributor
Business catalogs (mail order or toll free number)
Regional buying group
Business warehouse/discount stores
Internet shopping
Other
10. Rank the importance of the following items in terms of your customer's buying decision.
a. Price
b. Features or options
c. Brand name
d. Quality
e. Convenience - Sold locally
f. Convenience - Sold over toll free phone number, or mail order
g. Convenience - Sold over the Internet
11. Would most customers be willing to buy your product or service initially, or would they be more likely to wait until other people have tried it first?
Most of my potential customers are interested in new products.
Most of my potential customers will buy a new product, if the price is right.
Most of my potential customers prefer to buy an existing name brand product.
Most of my potential customers like to wait until people they know have used the product or service.
12. Is there anything else your customers have to buy in order to use your product or service? (e.g. to play a music CD, you have to have a CD player)
13. Which channels for distribution would be most effective?
Retail Stores
Business Distributors
Your Own Sales Force
Telemarketing
eBusiness/Internet Sales
Catalog/Mail Order
TV Shopping Channel
14. Are there any distribution channels or major chains, which you believe are critical to your success?

Market Potential

Note: Make reasonable estimates, if you have not yet done your market research.

15. Is the market growing, shrinking or staying about the same?


Why?
16. Market Potential (Dollars): What are the estimated sales per year in the total market (for all products, both your products/services and those of your competitors)?
Greater than $50 Million
$10 Million - $50 Million
$1 Million - $10 Million
$500,000 - $1 Million
Less than $500,000
Other
17. Average Price: What is the average purchase price per unit of competitive products? If no competitive products exist, what it the estimated price at which people would be willing to buy your new product/service?
per unit
18. Sales Potential: How many units could you sell in your target market each year?

Sales Potential (Dollars): Based on the number of units you expect to sell and an average revenue of 60% * of the selling price, your annual sales would be as follows.

  units per year - Total Sales Potential, just for your product
* $ per unit - your Average Net Revenue
 
$ per year - your annual expected sales revenues

* Note that your Average Net Revenue will be less than the price the customer pays. Distribution channels can cost 20-60% of the customer's price - but they also save you a lot of expenses and cover some of the marketing and transportation costs, you would otherwise have to bear. Even selling direct to customers, you will have volume purchase and other discounted prices.

Costs

Note: Make reasonable estimates, if you have not yet done your research.

19. What is the estimated time to develop your product or service offering (including design, testing and initial production)?
Less than 3 months
3-6 months
6-12 months
1-2 years
Greater than 2 years
Other
20. What are the estimated startup costs to develop your product or service in the time period indicated above?
Less than $10,000
$10,000-$25,000
$25,000-$50,000
$50,000-$100,000
Greater than $100,000
Other
21. Once you are selling your product or service, how much do you estimate it would cost to make these products, or to provide these services, per year?

  $ Cost per unit to make product or deliver service
  * Units sold per year
 
  $ Total unit production cost per year
+ $ Sales and marketing expense
+ $ Facilities and administration expense
 
  $ Total Costs per Year

Profit Potential

Based on your projected Sales Potential and the costs estimated above, your projected annual profit is:

  Sales Revenues Projected per Year
- Total Costs per Year
 
  Estimated Profit

Breakeven Point

Based on the price, sales and cost estimates provided, the number of units you would have to sell per year to cover all your annual operation costs would be as follows: (This does not include your start up costs, which may take you a few years to repay.)

Breakeven Formula: Cash In = Cash Out
(# Units x Average Sales Price) = (# Units x Average Cost per Unit) + Fixed Costs
Breakeven # Units =
Variables:
  Units - solve equation for this number
  Average Sales Price - average net revenue per unit sold
  Average Cost per Unit - average cost per unit to produce
  Fixed Costs - Annual costs to run the business: administration, marketing, and overhead costs.

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