o Answer the following questions:

a. What is the profile of the company?

b. What is the recent issue/s and challenge/s they are facing?
c. Conduct a PESTEL and SWOT Analysis on the issue/s raised
d. Make recommendation based on the analysis
o Answers must be written or encoded personally and submitted within 1
week or as maybe prescribed by an instructor.
2. Essay. Enumerate and describe how each part of the Business Feasibility Study
is related to assess a business feasibility.

Module 2. Market and Industry Analysis

Overview

Revenue is an important driver in the financial performance of the company. This

results from effective management of the market environment. The sustainability of the
business is heavily dependent on the market where it operates. First, the customers
where it sells its products or services. And second, the market where the business
operates. This module will focus on reviewing how to analyze the 4Ps of Marketing and
the industry where the business operates with the focus on how to quantify its impact to
the financial results.

Module Objectives

At the end of the module the students, particularly BSA and BSMAs, should:

• Develop the Market Aspect of the Business Feasibility Study

• Identify the risks involved in the development of product/service, price, place and
promotion based on the emerging issues and trends

Course Materials

In conducting the market and industry analysis, the analyst must be aware that
each product and service offering is distinct from another. Hence separate demand

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study must be conducted for each product or service offering to establish a reference
and at the same time this must be accounted for separately to determine that
contributor to the impact to the total revenue.

Single Product or Service

In assessing or developing a single product or service is the easiest since the

analysis will have a focus. In the conduct of product analysis, the following are the areas
should look into:

• Input. For manufacturing, materials are very important especially when

penetrating a market with specific or specialized demand. It is important in
the analysis that you know where the product is made of and the
properties that the materials has. This will serve as a substantial input in
the marketing strategy and determination of the source. For service-
oriented businesses, in lieu of materials, competency or skill set must be
defined very well that will enable the delivery of the service.

• Output. In the product analysis, it is important that the desired output is

realized, or the function is met. Products must be able to work properly
according to how it is designed to keep the integrity of the marketing. For
service-oriented businesses, the customer feed will serve as the ultimate
assessment of the realization of the desired output.

• Aesthetics. Packaging plays a big role in making the product popular,

nowadays it is a plus if it is safe to health and environment. Some
products will have to be packaged with safety precautions like no sharp
edges etc. Style dictates the originality of the product. Branding is a key in
determining how the product will speak for itself. For service-oriented, the
brand and values carried by the employees. It is more challenging for the
service-oriented firms to establish and maintain good rapport to the clients
so that it will be marketed through word-of-mouth.

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 • Costs. Most of the time this is the deal breaker. The costs will affect the
viability of the product since this will serve as a significant basis to
determine the price. Affordability and value for money is always an issue
to enable the companies to market their product and services well.

• Environment and Safety. It started to become a fad that products and

even services should be environmental conscious and promotes safe
usage. Service oriented must demonstrate good corporate social
responsibility by knowing ways on how they should respond to their
customer needs and factoring it the care it should extend to the
environment and to the safety of their customer / clients.

Multiple Products / Services

The challenge in assessing multiple products and service offerings is that it all
affected the total revenue. Multiple products can easily be assessed if it can be isolated
from the inventory of offering. If cannot be isolated, sales mix analysis may be
conducted to the determine and allocate the impact or contribution of a product or
service offering to the total revenue.

Market Environment Analysis

The challenge in determining the feasibility of the product in the market is to
determine whether there is a demand for the product or service. In determining the
demand, extensive research should be conducted. In practice, research firms were
commissioned to conduct the research. Normally research is conducted through a
survey. A survey questionnaire is used as an instrument soliciting the potential
customers’ perception.

• Determining the Population, Sampling Technique and Sample Size

It is always a challenge in the determining the population of a study. In

order to establish the number of samples it is important to establish the

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population. The population will be established by determining the
characteristics of the target customers of the product or service offering.

Once the population is determined it will serve as the basis in determining

the sample. The sampling technique would be dependent on the profile of
the population. Normally, Slovin’s formula is used to determine the sample
if the population is defined. (Glen, 2020). Slovin’s formula is written as:

𝑁
𝑛=
(1 + 𝑁𝑒 2 )

n = no. of samples
N = total population
e = margin of error

To illustrate, you are going to launch a new model of ladies’ shoes in the
city of Marikina. Based on the local government statistics, Marikina City
has about 480,000 people with the male to female ratio of 52:48. The
researcher’s confidence level is 95%. Based on the foregoing the sample
should be 399.67 or 400 samples computed as follows:

480,000
𝑛=
(1 + (480,000)(1 − 95%)2 )

𝑛 = 399.67

In case that the population is undetermined or cannot be quantified,

Cochran’s Formula is used. The formula is written as:
𝑍 2 𝑝𝑞
𝑛= 2
𝑒

n = number of samples
p = estimated proportion of the population
e = margin of error
q=1–p
Z = z value based on the Z table

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 To illustrate, you are about to offer laptop repair service in the city. Given
that it is hard to determine who are the owners of laptop and more
specifically the laptops that will soon to be repaired the population is
undeterminable. Off-hand you think it is about 0.25 of the population and
you are setting 95% confidence. Based on the z-table the Z value is 1.65
for 95% confidence level, the samples you need to get is 204.18 or 205
computed as follows:

1.652 (0.25)(1 − 0.25)

𝑛=
0.052

𝑛 = 204.18

• Designing the Instrument

The instrument to be used in the research normally takes the form
of a questionnaire. The questionnaire must be designed to enable the
researcher to:

(1) gather the perception of the potential customers to establish

demand;
(2) determine any existing or potential competition in the market;
and
(3) validate the information gathered

The research instrument is subdivided into at least 2 parts – first is

the profile of the respondents and second is the determination of the
perception and inputs of the respondents. To facilitate the solicitation of
the information, the options were already made available for the profile.
This also helps the researcher to set the boundary for the responses.
Likert Scale is also used to facilitate gathering the perception of the
respondents. The Likert Scale is normally designed from 1 to 5 where 5
being the highest or most favorable.

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 Once the research instrument was designed, validate its integrity by
selecting small number of people in the population. These are the test
respondents. Test respondents should not be part of the samples that will
be processed for data analytics.

• Data Gathering Procedure

In gathering the data, there are a lot of possible ways and tools that
are available. Data gathering could be through observation, distribution of
the questionnaires, conduct of one-on-one interviews, and focus group
discussions.

The research instrument designed will serve as a tool to facilitate

the process of gathering the data. Determining the respondents will
depend on profile which you think relevant and would suits that target
market we are studying.

• Conduct Demand Gap Analysis

Once all information was gathered it will be analyzed and

assessed. An assistance of a statistician would be helpful especially if the
information gathered were quantified. It will also be helpful to validate the
consistency of the responses per profile of the respondents. Hence,
significant difference assessment should be made on the perception
versus the profile.

The demand may be based on the volume that will be patronized or

purchased if the product or service is launched. Based on the potential
demand you can have an idea on the following:

(1) Volume of sales or projected revenue

(2) Range of acceptable price
(3) Key attributes which the potential customers would have a good
reception on the product or service

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 Other that the demand, supply must also be gathered from the
research. In this context, supply does not only refer to the resources
available but on the providers of the demand. Existence of the suppliers
for the demand requirement either directly competing or alternative to the
product or service will also impact the revenue and penetration in the
market. This also includes identification of the barriers to enter the market.

The difference between when demand is larger than the supply

then there is a demand gap. The demand gap should be taken as the
opportunity to penetrate the market without competing with the existing
players. If the supply is equal or greater than demand, there will be more
challenge for the organization. This means that the market is saturated
already. In this situation a more comprehensive and strategic marketing
approach should be employed and designed.

Pricing
In setting the price, what is important is that you can set it to cover the
costs including the cost to finance the development and operations. There are a
lot of ways to determine that price. Although we can limit them into three pricing
strategies. Price can be cost driven, market driven, or customer driven.
(Marketing-Isider, 2020). The price is the value of the product or service that the
customer is willing to pay in exchange.

Cost Driven Pricing

Full cost recovery pricing is the most ideal for businesses. When
full cost is considered in the picture, the seller effectively charging their
customers with the total cost to produce including the selling and
administrative efforts of the company and their cost of financing the
required expenses. Normally this is called as the cost-plus because the
approach is determining the full cost plus a certain margin that would
compensate the seller’s initial financing and investment efforts. Cost
driven pricing is normally effective for monopoly type of industry.

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 Market Driven Pricing

Price can also be based on the market especially if there are price
leaders in the market. Normally the challenge for the firms is to maintain
their costs to remain competitive in the price set in the market. The price is
set and dictated by the market. The market driven pricing is normally
dependent on the:

(1) availability of resources

(2) country and foreign currency risk; and

(3) government policies.

Market driven price strategy is employed in oligopoly or monopolistic

competition type of industry.

Customer Driven

Price are set based on the customers preference and affordability.

The prices are not set by the manufactures, merchandisers or service
providers but the customers or clients. They dictate the price especially if
they have an alternative or they have another recourse to satisfy their
demand. Customer driven are normally adopted by pure competition type
of industry.

Distribution and Sales Strategy

For new players in the industry distribution and sales strategy is important
to be solid and effective, especially if there are strong entry barriers in the
industry. The strategy will respond to the challenges of entering the market or
capturing the market share of the existing players.

Nowadays, there are a lot of media in marketing your products and

services. For business to consumers engagement find social media to be about
90% effective as a tool in marketing, followed by website articles and e-

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 newsletters which is rated to averaging at 80%. Printed media is around 30%
effective to reach the consumers popular attention. (Ashwini, 2020)

The effectiveness of the strategy must be assessed with the use of

research tools as well. Correlations of the time when the effort was made to the
time the increase in sales also realized.

Read
• Books and literatures related to Marketing, Product Development, Demand and
Supply Analysis
• Market Aspect or Market Study of Feasibility Study

Activities / Assessments
• Prepare a marketing proposal on a product or service include the assessment on
the risks and challenges in the marketing of the product or service.
• Prepare a survey questionnaire that will enable you to assess the product or
service.
• Prepare a Sales Budget based on the results of the survey.

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