Explain the various factors involved in assessing the market while selecting a product or service?

Question

Accepted Answer

**1. Demand** — The demand assessment is based on the size of the market being targeted — local markets, state level markets or national/international markets. It also involves a study of the target groups of consumers, their preferences, tastes and other related variables.

**2. Supply and nature of competition** — The supply position is studied, i.e., the complete picture of the quantities of the product made available in the market by all existing players, also taking into account future supplies from possible entrants in the field.

**3. Cost and price of product** — It is important to determine the cost of the product and compare it with the available products in the market. The cost variables of competitors — transportation delays, wastage, storage etc. — are studied to spot a cost advantage, which influences the delivery mechanism of the identified product or service.

**4. Project innovation and change** — A study of the prevailing innovations and changes being carried out by existing entrepreneurs is required. Technological advancements in the field have to be analysed because they may change the quality and influence the cost and price ultimately.