Market Analysis
Market Analysis - a framework for structuring the marketing plan
This is Part 2 of the step-by-step guide to rewriting an outdated business plan.
The Market Analysis section includes the competitive analysis, the target market, and a detailed customer analysis.
Understanding the competition propels a business forward to identify competitive advantages and formulating a marketing strategy.
The same fictional company’s Business Plan from part 1 of this guide will be used to examine in detail how the outdated Market Analysis section requires revisions.
The Market Analysis begins with analyzing the competitive landscape and identifying major competitors in the market.
Here’s the competitive landscape section reviewed in detail. Any outdated information should be researched and updated.
Start by reviewing all statistical data, facts, and references that should be reviewed again for accuracy.
Competitive Landscape
Could you describe the entire landscape succinctly without going into excessive details about your major competitors? An in-depth analysis of a few of your top competitors will be included in a subsequent section.
The competitive analysis provides an overview of the competition and the subsequent competitor analysis will provide a deeper understanding of the companies that are direct competitors.
In this example, there is a low barrier to entry. There is no allotment garden as a service available in the US. It is more common in Europe, as the Competitive Landscape section highlights.
However, a brief history of community gardens and mentioning the role that the American Community Gardening Association (ACGA) has on their efforts to provide community gardens in food deserts is an important part of providing an informative overview.
Areas requiring research and verification of current information are highlighted in the excerpt below:
Competitor No. 1 - Non-profit organizations/Community Gardens
SharedEarth.com is a non-profit organization mentioned in the 2021 version of the original business plan. Any updates to their business model or growth since 2021, or any other changes should be revised in this section.
The sentence describing the target market as “serious gardeners” can be rephrased to describe more succinctly the difference between a hobbyist and a “serious gardener”. Details of the demographics, psychographics, and behavioral patterns will be detailed in the later target market section, so there’s no need to be too detailed at this juncture.
The contrast between the target market and SPIN farmers can be rephrased to be describe that these are two different markets with completely different interests and characteristics.
Competitor no. 2 - SPIN Farmers
SPIN farming is a niche in the agricultural space. SPIN is an an acronym for “Small Plot INtensive” (Borghi, 2011). Instead of a traditional farming method, SPIN farming is known for urban farming on smaller plots of land.
Although these are parcels of land available for lease to SPIN farmers in urban areas, farming for sale of produce is not the target market for allotment garden-as-a-service.
The US Department of Agriculture has an advisory committee for Urban Agriculture and Innovative Production. According to their charter, their objectives include promotion of urban agricultural initiatives such as community gardens, urban farms, rooftop farms, indoor farms, and “other innovations in agricultural production (Urban Agriculture - Charter, p1).
Although at first glance, allotment gardeners may seem to have more similarities with community garden participants, this is inaccurate. The potential customer has the willingness to pay for a service for their own enjoyment and not for a profit, which is the intent for urban SPIN farmers.
the customer analysis: go beyond demographics and geography
Analyzing customer behavior is critical to break down into subcategories to understand potential purchasing behavior.
Customer Analysis
Understand your potential customers. Go beyond demographics and geography. Answer questions such as: what motivates your customers to purchase, and why do they purchase? What are their values and thought processes that make your products and/or services attractive to them?
The original Target Market section is lacking in a few ways.
The highlighted sections above include statistics requiring updates.
Customer Analysis can be elaborated based on the following:
Geography - potential customers reside in urban areas or in suburban neighborhoods with a high population of renters without access to a substantial amount of land required for gardening projects.
Demographic - the population in Wake County according to the April 1, 2020 census is reported as 1.13 million, and 467,665 for Raleigh, NC (Census.gov, 2023).
Psychographic - understanding values, interests, personalities, and the target market’s self-identification creates a lifestyle profile. For example, the cohort identified in the allotment garden-as-a-service are dedicated and possibly fanatical gardeners. This group is willing to pay a monthly rental fee in order to pursue their gardening projects, and are not deterred by their urban surroundings.
Behavioral - engagement and usage metrics, level of commitment to a service, are included in this study. In this example, they are willing to drive 10 to 15 miles to an allotment garden. Their potential usage level is frequently, as in multiple times per week, depending on the gardening season.
Primary needs - understanding the primary needs of a segment focuses the attention on how their needs can be met by your product and/or services. In this example, the need is for a piece of land or garden bed within a facility allowing gardeners to work on their own projects.
Benefits - the benefits potential customers are seeking include physical space for gardening projects with the autonomy to access the premises whenever convenient, as often as possible throughout the gardening season.
Price sensitivity - further research is needed in terms of price. Competition does not exist in the US. Depending on income levels and disposable income, the willingness to spend a range per month requires an understanding of the amount this segment is willing to pay. Compared to a gym or yoga studio, membership fees can be a starting point for conducting surveys for more insights.
Segment attractiveness - the lack of competition and ease of market entry makes this segment attractive to pursue. Finding the right location for the initial allotment gardening services is critical to scaling in the future. There’s potential to “create and capture new demand” (Blueoceanstrategy.com, n.d.)
Remember that some of these breakdowns will be challenging to assess since the current market does not accommodate the potential target market. Community gardens and SPIN farmers leasing agricultural or private land are not direct competitors.
If there is potential demand, information from surveys or other research studies can be gleaned to anticipate other pertinent qualities to produce the most accurate estimates based on available data.
In part 3 of this step-by-step guide, the Marketing Plan will be reviewed. This includes defining the product/service, price, place, and a fifth category of people. The value proposition will be communicated and backed up with points of difference and parity.
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References:
US Census Bureau. Quickfacts - Wake County. Retrieved Feb. 15, 2023. https://www.census.gov/quickfacts/fact/table/wakecountynorthcarolina,raleighcitynorthcarolina/POP010220
US Department of Agriculture. Urban Agriculture. Retrieved Feb. 15, 2023. https://www.nal.usda.gov/farms-and-agricultural-production-systems/urban-agriculture