This market feasibility report summarizes key elements to include when conducting a feasibility study for a new innovation project. It describes analyzing the current market, industry trends, competition, sales projections, and potential customers. The report emphasizes using factual information from research and cites sources to justify assumptions. Conducting in-depth analysis of these components can help determine if a project is both needed in the market and competitive against alternatives.

1. Market Feasibility Report
Naphunsakorn Waiyawuththanapoom, PhD

2. 1. Describing Innovation
• Describing innovation characteristics
• What is it? What is their component?, any drawing or any initial
design? or physical shape to be presented
• Product features
• What are the benefits or adding value out of this innovation?
• Is there any originality of this innovation? Or it is replicated from
others? Why?
• Describe competing and substitutes products in detail
(conducting detailed product landscape)

3. Feasibility at glance
• All feasibility studies should look at how things work, if they will work, and
identify potential problems. Feasibility studies are done on ideas, campaigns,
products, processes, and entire businesses.
• Feasibility studies are assessment tools - not just reports to try and sell your
business to investors. They should consider both pros and cons and analyze a
variety of potential business scenarios.
• A Marketing Plan maps out specific ideas, strategies, and campaigns based on
feasibility study investigations, that are intended to be implemented.
• Think of market feasibility studies as a logistical study and a marketing plan as a
specific, planned course of action to take.

4. What Should be Included in a Market
Feasibility Study?
Elements to appear in a market feasibility study include:
• Description of the Industry
• Current Market Analysis
• Competition
• Anticipated Future Market Potential
• Potential Buyers and Sources of Revenues
• Sales Projections

5. How to Write an Industry Description
• Give a brief description of the industry your Innovation is categorized.
Determining your industry is important for doing, applying, implementing,
adapting this innovation or for receiving government contracts government
incentives, attracting investors, and for receiving grants (if you form as a
non-profit).
• Example: The industrial first aid kit industry is a lucrative, fast-growing
field, with contract awards as high as $14 million dollars in 2006. Fictitious
Business Example (FBE) is being established for the purpose of producing,
and providing, quality industrial first aid kits to the United States
Government, privately-held and publicly-held companies to improve
worker's safety on the job.

6. Analyzing Your Current Market
This section of a market feasibility study describes the current market for your innovation. Few hints
are:
• If you are offering something so unique that there are few market statistics, you can either use
related industry information, or even conduct your own independent study.
• Several ways to conduct your own research for new ideas include: polling Internet forums,
questionnaires addressed to targeted consumer groups or the general population, or even
customer surveys.
• Any solid evidence you have that there is a demand (or market) for your innovative product or
services will help you sell your idea. This is particularly important if you are marketing something
unique, or within a very small, specialized market. You need to show that your ideas is novel
because you have found a niche and not because there is no existing market for the idea.
• A good indicators for finding out what is selling (and what is not) is employee growth is . This is a
good indicator of an industry's overall stability. You can use any other indicators.
• Massive layoffs or few employer or employees, indicates fewer business opportunities.
• Where there is demand for something, there should be correlating growth in employment, the
number of new companies being formed, or in the industry's overall combined revenue.

7. The market analysis
• The goal of any market study is
to find the point where supply
and demand intersect to supply
the right quantity of a good at
the right price. Since the world
is complex and dynamic, no
economist can ever identify
that exact point. A market
analyst accumulates
information on as many factors
as possible to make an
educated guess.

8. Component of Market Analysis
• The educated guess of a market analysis is based on four basic
components:
• the project description,
• a demand assessment,
• a review of supply, and
• a synthesis.
• The first three steps review detailed market information and note the
implications for the proposed project. The final stage draws
conclusions from those implications. By using this outline, the
consultant maintains the path of logic which lead to the study's
conclusions.

9. Project Description
The first step of a market analysis is the project description. In this section, you
should lay the foundation for a defensible market study. The project description
should perform four tasks:
1. Outlining the bounds of the study;
2. Listing the limitations of the study;
3. Describing the potential project; and
4. Assessing indirect economic and site factors.
The first task in any project should be defining the study. You should quickly identify
what type of analysis is being performed and for whom. Is the project a highest and
best use study for a private developer or a market study of a baseball stadium for a
municipality? The background provides the readers with a frame of reference for
the copious amounts of information they will encounter in the report.

10. Listing the limitations of the study
• All innovation project limitations should be explained.
• For example, most market analyses will assume that market trends
will remain constant and will not consider major shifts such as a
possible recession. It is also typically assumed that a use will be
operated the same as other similar uses.
• If a study is based on outmoded or insufficiently detailed
information, the data's effect on the conclusions should also be
noted. Not listing limitations may cause serious misinterpretations of
the conclusions.

11. Factors affecting demand
The factors affecting demand for a potential development are those which describe the scale and
purchase patterns of market participants. By examining the factors, the analyst attempts to quantify
the total level of demand. Some aspects of demand are difficult to quantify and may be assumed to
remain constant. Demand can be described by the following:
1. population,
2. income,
3. employment,
4. market trends,
5. relative prices,
6. taxes,
7. interest rate,
8. down payment requirements, and
9. future expectations.

12. Project Description (cont)
• Since general economic indicators can only provide a broad picture of
the market area economy and growth trends, it is necessary to assess
trends associated with the potential product. Market trends are often
tracked by industry groups. For example, the National Real Estate
Index Market Monitor provides information on apartment rents. If the
development is targeting a specific use, the group which represents
industries in that market may serve as a good contact. For example,
the National Sporting Goods Association tracks sports participation
rates annually. The Urban Land Institute text, Real Estate
Development, provides a comprehensive appendix of sources for
market analysts.

13. Factors affecting supply
The factors affecting supply are those which describe the amount of a product in
the market place and the price that product is currently receiving. The supply
section of a market analysis analyzes the potential competition that a product will
have in the market. Supply is a function of the following factors:
1. existing supply;
2. planned supply;
3. competitive environment;
4. availability of land; and
5. the cost of land, labor and capital.
Like demand, some factors of supply are macro-economic in scope and are rarely
examined. The analyst will concentrate on the economic decisions being made in
the local market.

14. Primary Market Area (PMA)
• A Primary Market Area (PMA) must be established based on the proposed
project’s location and project type. This is the smallest geographic area
from which the majority of support for a proposed project is expected to
originate. Accurately defining a project’s market area is crucial to providing
an accurate and effective market study. If you defines a PMA which
encompasses too large of an area, it is possible that demand for the
proposed project will be overstated, which could result in the development
of a project that is too large for a particular market. Likewise, if an analyst
is too conservative and defines a market area that encompasses too small
of an area, it is possible that demand will be understated, potentially
resulting in the development of a project that is too small and does not
meet the needs of the market. Inaccurately defining a PMA, primarily one
that is too large could also result in the identification of inaccurate
comparable properties.

15. Anticipated Future Market (Based on Industry
Trends)
• This section should include a narrative description, as well as attached
spreadsheets, graphs, or tables to showing trends, statistics, or projections of this
current market of your innovation.
• There are no sure-fire ways to tell if an industry will have measurable growth in
the future, but you can make logical and reasonable predictions based on trends,
past growth, and current markets.
• Don’t forget to justify your assumptions (if any) and don’t forget to quote your
reference or source of your information.
• Use Facts, Not Fiction! It is critical in this section that your innovation project are
fact-based as much as possible. Any business takes risks; the key is to minimize
those risks is by carefully studying already successful businesses. Rather than
target just the entire industry, try to isolate similar businesses and study what
they are doing, how they are doing it, and their financial track record.

16. Anticipated Future Market (Based on Industry
Trends)( cont.’)
• Visit Your Competitors Websites: You can obtain a lot of information just from
visiting company websites and looking over product lines.
• Look for discontinued products or services and high-priced items. Somewhere in
between these two things are probably the most stable long-term items.
Discontinued means consumers are no longer demanding the product, while
high-priced items may indicate a fad.
• Look at Big Companies Strategies: Since big companies spend big bucks on market
research, take advantage of their money spent and public information. For
example, if you are trying to crack the fast food chain, look at Mcdonal and KFC.
What new product lines or services are they offering? Chances are good that they
spent millions researching industry trends to develop new product ideas.
• Study Press Releases: Look for press releases about businesses in your
industry. Press releases are an advertisement, but they also often tell why a
company is branching out, closing a division, or change its product line. They have
already done the research for you so do not hesitate to take clues from other
businesses.

17. Research Local Competition in Business
• If you are planning to serve only local market, start by identifying every
competitor within your area.
• List each competitor. You should closely examine all competing businesses.
Consider their characters (e.g. business focus, nature, target customer,
strength and weakness) and how long they have been in business. These
things can help you determine how hard it will be to launch your
innovation and compete with them.
• You should also make note of any similar businesses that have recently
gone out of business. There may be a reason such as poor location, high
taxes or operating restrictions, or there may be not enough demand for the
product or service in that area to sustain a business. Don’t ignore the past.
• Researching competitor information can tell you two things: What works
now and what has not worked.
• IF you are planning to expand it at the international level, make sure you
did the similar thing at the country or region you want to expand.

18. How to Calculate Sales Projections
• Sales projections can be a challenge for any new business owner because
there is little, or no track record to support how fast you will grow, or what
innpvtaion products or services will sell best.
• Sales projections should factor in how much time and money will be
invested into the business, and the markets you will be targeting. For
example, if you get your product in the door at Paragon or Tesco, your sales
are more likely to grow faster and your profits will be higher than if you sell
your product at the local corner store.
• For this reason, it is important that you write market feasibility study first.
Your market study will help you decide where to sell your product of
services, and what innovation are most likely to generate the most
revenue.

19. Internet based innovation (if any)
• If you are have an Internet-based innovation project:
• Estimate the total traffic (number of visitors) to your website each month.
• Project anticipated site traffic volume over time.
• Use traffic projections to estimate the average number of sales per every 10,000 visits to
your site.
• Finally, calculate the average amount of each sale.
• The more traffic you can drive to your site, the more opportunities you have for
making a sale. Do you have good Search Engine Optimisation (SEO) skills? Do you
have your website live and ready to go? These things are important to
all internet-based innovation because as your site becomes more popular, you
can project an increase in sales.
Tip: Summarize sales projections in the content but attach a spreadsheet showing
actual numbers based on sales projections.

20. How to Identify Potential Customers, Clients,
and Contract Sources
• This component of your small business market feasibility study should be
descriptive.
• Your potential customers, clients, and contract sources should include the following:
• A list of current customers, clients, and contracts and the potential for new or renewed
contracts.
• Any sales leads that may generate new customers or clients.
• A list of government contracting agencies with a brief description of what type of contracts
they solicit, and how they pertain to your industry.
• A list of market types you currently, or intend to target such as seniors citizens, working
mothers, organizations, specialty retailers, etc.
• Depending upon the nature of your business, it may not be possible to associate specific
amounts of revenue with a particular market, but you can at least try to estimate the
percentage of total revenue expected from each source.
For example, if you plan to sell products to five specialty stores, list each store you
plan to sell to, and a total overall revenue for a category "specialty stores" rather
than an amount for each individual store.

21. • Based on the key components discussed above, a market study
should provide valuable insight to the project owner in regards to the
competitive position of a particular innovative project, and more
importantly, the need/demand for a particular innovative project in a
given market. In conclusion, a competitive project is not always
needed and a needed innovative project is not always competitive; a
good market study should be able to tell the story of what type of
product is both needed and competitive within a given market.