Updated: Nov 15, 2019
The goal of every business is profit. Either service or product inclined, businesses succeed because of the positive interaction of the market and their brand. Market factors play an important role in the quest of a profitable enterprise, therefore, the need to understand the market space your business operates in.
Understanding the market is vital for new businesses as it determines their marketing strategies. Whatever agribusiness you are investing in, market analysis and a better understanding of your end user (customer) is vital. This can mean many things e.g. profiling your customers, determining the strengths and weaknesses of your competitors, or analysing where the potential risks lie in your market.
The good news is you don’t necessarily require a large research team or marketing budget to achieve this. A focused effort into unravelling who your customers are, where they are and how best to interact with them will optimise your agribusiness approach towards its business.
Why Should People Buy My Product?
What problem is my product solving? Why should people pay to have my product?
Your customers might not be aware that they have a need, you’re planning to solve. However, if you’re making a process faster, cheaper or easier, or bettering their situation in some way, then it could be something the customer is willing to pay for.
As you dig deeper into your research you should gain a better understanding of how your product meets your customers’ needs i.e. ‘why do they need your product?’ and ‘whether people will pay to use your product’.
Answering this question brings clarity and helps with your pricing strategy.
Who are My Customers?
Next, it is time to identify who your customers are. Generally, anyone you solve their need is your customers but that isn’t enough. You need to figure out not only those who need your products but also those willing to pay for it
Though your customers are all different, they’ll have some common characteristics and preferences which will allow you to group them.
Identifying shared characteristics will allow you to better understand your consumers and tailor your product to their needs. These characteristics are only relevant if they affect customers’ motivations to buy.
These characteristics could include:
Geographic. e.g. country, city, climate
Demographic. e.g. age, gender, profession, social class
Psychographic. e.g. lifestyle, activities, interests and opinions
Behavioural. e.g. usage rate, attitude towards and response to product, brand loyalty
What are my Customers Like?
Now, that we have established who your customers are, we need to know what they are like. How does their lifestyle affect their decision to buy your products?
Determine how your product or service will fit into your target's lifestyle. How and when will your target use the product? What features are most appealing to your target? What media does your target turn to for information?
What is my Unique Selling Point?
This is what sets your agribusiness apart. There is enough competition for customers now and in the future. It is important to determine what sets your farm apart and work with it. It is the difference between your farm and the others, it is what brings customers to your farm, and why they would refer you to others. A good USP should be able to answer these questions “Why should someone do business with me instead of my competition?” What unique benefits does my farm offer?
Now, you’ve identified what your USP is, but you can’t truly know if your product is unique without doing your research. This means looking at what your competitors are doing.
Your competitors are those with a similar product or service who also share your target market. They could also be someone with the same supply line as you e.g. a business which uses the same technology resources.
Not only do you need to make sure you stand out now but think about future competitors and how they could affect you. How are you going to make yourself stand out from future threats? These can be far more harmful than those you’ve prepared for.