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Market Validation
Summary
 Stage 1: Validation of Market Opportunity
 Stage 2: Selection of Target Market Segments
 Stage 3: Detailed Market Segment Analysis
 Stage 4: Define the Customer Value Proposition
 Stage 5: Validation of Sales and Marketing Plan
 Stage 6: Market Testing
Stage 1:
Validation of Market Opportunity
Stage 1: Validation of Market Opportunity
Objectives
 Validation of Customer Requirements
 Requirements as perceived by customer?
 Are alternative options adequate?
 Measurement of Market Readiness
 evidence of market acceptance?
 evidence of change from current solutions?
 It this an early adopter market?
 Competitive Analysis
 Access to cost effective distribution?
Stage 1: Validation of Market Opportunity
Methodology
 Primary and Secondary Research
 Interviews with Qualified Prospects and Industry experts.
 Sample of adequate size
 Secondary Research focus on sector v global information.
 Questionnaire / Information Requirements
 clearly defined / relevant
 Skills Required
 assistance of experienced sales and marketing specialists
Stage 2: Selection of Target Market Segments
Stage 2: Selection of Target Market Segments
 Target Market Segments defined by
 product/service
 customer profile
 geographic location
 other relevant criteria
Stage 2: Selection of Target Market Segments
 Criteria
 the market environment
 company resources/capability
 ROI
 Customer Demand, Market Readiness
 Competitive Environment, access cost effective
distribution
 Skills Required
 experienced marketing and business planning
specialists.
Stage 3: Detailed Market Segment Analysis
Stage 3: Detailed Market Segment Analysis
 Objectives
 to further validate the market opportunity;
 develop a ‘Value Proposition’
 identify potential reference sites;
 information required for Sales and Marketing plan.
 Methodology: interviews with 10-20 qualified
prospects in each market segment
 Skills Required
 assistance of experienced Sales, Market Research /
Business Planning specialists
Stage 4: Define the Customer Value Proposition
Stage 4: Develop a Customer Value Proposition
 Required for effective messaging
 Skills Required
 assistance of an experienced sales specialist
Stage 5: Validation of Sales and Marketing Plan
Stage 5: Sales and Marketing Plan
 Pricing Model
 Selling process
 Sales projections
Stage 5: Sales and Marketing Plan
Pricing Model
 Determine pricing model by:
 benchmarking against similar products;
 customer testing.
 Skills Required
 experienced sales specialist
Stage 5: Sales and Marketing Plan
Selling Process
 Defining the process
 method and cost of lead generation;
 prospect conversion rates
 conversion lead times.
 Selling Costs
 cost of achieving an average sale for each target market
segment.
 Skills Required
 experienced sales specialist
Stage 5: Sales and Marketing Plan
Sales Forecasts
 completed for the first three years of operation;
 provided by value and by number of units for each
Target Market Segment;
 supported by prospecting, lead time, conversion and
costing schedules.
Stage 6: Market Testing
Stage 6: Market Testing
 Process
 Commence initial selling to develop as sales pipeline.
 Establish reference customers
 Review the sales and marketing plan based on the
outcome of the initial sales activity.
 Skills Required
 Sales and Marketing Team