Module 3 • Market feasibility study
Now, based on the information you have collected, list the products that you believe would sell best to students in your school. Give reasons for each choice. Discuss the possibilities of selling these products or services in your school.
Source: Risks and Rewards of Entrepreneurship, Ashmore, Fischer et al, CD available from the Consortium for Entrepreneurship Education. Contact: Cathy Ashmore,
Cashmore@entre-ed.org
Revision questions
1. Ntuthuko Stationers intends supplying the small and medium-sized businesses with stationery in the Gauteng area. There are 5200 small and medium sized businesses in the area. Serobe estimated that each business spends R800 per month on stationery requirements. Serobe believes that they will enjoy a market share of 12% of the total market. Calculate the potential market share of Ntuthuko Stationers.
2. James intends selling pies to students at this college. There are 350 students and their average income is R1250. He estimates that they spend 1,5% of their income on pies. James believes that he will enjoy a market share of 15%. Calculate the potential market share for James. Name a few other factors that will influence his market potential?
Indicate whether the following statements are TRUE of FALSE 1. Demographic segmentation refers to the area of residence. 2. The most common instrument for collecting primary data is surveys.
3. Competitive advantage is when a product of a service is more “attractive” to customers than that of its competition.
4. Products can be categorized into three (3) different categories, namely industrial products, consumer products and services.
5. Information is what is collected and only becomes data once it is reworked and interpreted.
Which description in Column A matches the concept in column B? Column A
Column B 1.
2. 3. 4.
Customers buying patterns are influenced by ‘who they are’
Customers all live in a particular area Different customers have different lifestyles Customers who prefer a specific type of product.
Other Questions
1. Assume there are 2700 customers in a particular business’s target market. The average income per annum per customer is R60 000. You estimate that each potential customer could spend 2.5% of his, or her yearly income on the products that you plan to offer. And you believe that you will enjoy a 15% market share in the first year of your new business. 1.1 Calculate the potential market share of your business. Show all your calculations. 1.2 What will the average monthly turnover of your business be? 1.3 Assume you sell all your products at R25 each. Compile a sales budget for your business.
2. Miss Thandi Yeki started a new stationery business called BookPen CC. The business is based in the Eastern Cape. Typical products that are sold include pens, pencils, exercise books, rulers, airtime, sweets and schoolbags.
A. Geographical Segmentation
B. Psychographic Segmentation C. Demographical Segmentation D. Product Segmentation
T/F T/F
T/F T/F T/F
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