How do you assess the potential of a market segment?

Principles for evaluating market segments:

1. The market should have sufficient realistic demand, and its demand level has reached the specific market expected by the enterprise.

2. The market has a relatively good potential development prospect, which reserves the development space for enterprises and the prospect of obtaining greater profits, which is conducive to the continuous development of the market.

3. The competition in the market is not very fierce, there are few competitors, or the competitors are not easy to beat people, or the company has an absolute or relative advantage in the competition in the market.

4. This market can be dissolved or entered through appropriate distribution channels. Otherwise it cannot be used as a niche.

Market segmentation allows startups to explore market opportunities, and the next step is to choose which market segment to enter. However, which market segment to enter cannot be blindly chosen, it is necessary to put forward higher requirements for each market segment, and make competitors fight with each other, which ultimately damages sales profits and makes the market unattractive. The best solution is to provide customers with a quality product or service that they can't refuse.

** Threats posed by increased bargaining power. If the market is able to raise prices or reduce the quality of products and services, or reduce the quantity, the market segment will not be attractive. The best solution is to establish a good relationship with the best businessmen and strive to develop a variety of best channels.

Entrepreneur's Goals and Resources Even if a market segment has a certain size and development characteristics, and its organizational structure is attractive, entrepreneurs still need to consider their own goals and resources in conjunction with the situation of the market segment in which they operate. Some market segments, while more attractive, do not meet the long-term goals of the entrepreneur and therefore have to be abandoned. This is because these segments may be attractive on their own, but they don't push entrepreneurs to accomplish their goals, or even distract them from their main goals.

Even if this segment aligns with the entrepreneur's goals, the entrepreneur must consider whether the start-up has the skills and resources necessary to succeed in that segment. Regardless of the market segment, there are certain conditions that must be met to succeed in it. If the entrepreneur lacks the necessary capabilities in one or some aspects of a certain market segment and is unable to obtain the necessary capabilities, the entrepreneur should also abandon the segment.

Even if the entrepreneur has the necessary abilities, it is not enough. If the entrepreneur can indeed succeed in the market segment, he or she also needs to develop an advantage to overwhelm the competition, and if the entrepreneur cannot create some form of dominant position in the market or the niche market, he should not be rash.

When we evaluate a market, we should first evaluate the purchasing power of the market, and the purchasing power includes the buying group, which are the buying groups, such as mainly housewives, young girls, children or the elderly, and evaluate the market in more detail, which will help us do better market analysis.