The depth of detail in market analysis will depend a

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Unformatted text preview: ess. In your initial assessment you may have already developed your first basic Market Analysis worksheet for analyzing potential customers. It will help you define your market and understand your key market segments. As you complete your market analysis, look at your segmentation critically and strategically. Is this the best segmentation? Be sure to revise and polish your numbers. The Market Analysis Table As part of the business plan, you should generate enough information to develop a basic Market Analysis table. The illustration below gives you an example of a list of market segments, implemented as a spreadsheet table. Each segment is a group of customers that are classified according to the market segments you define. MARKET ANALYSIS TABLE This table shows a simple classification of market segments, each segment defined by its total potential customer count and its estimated growth rate. To calculate compound average growth rate (CAGR), the standard formula is: (last number/first number)^(1/periods)-1 You can see that formula at work in the illustration, in the formula shown in the edit bar of the spreadsheet, calculating the CAGR from the two numbers. Average growth in the Consumer segment during that period was 2%. In the illustration you can see how the spreadsheet works. It is pointing to cell H5, and the formula in the edit bar is the formula in that cell. It identifies the last year in row-column notation as G5, and the first year as C5. The growth rate calculation produces the number showing in H5, 2%. CHAPTER 12: YOUR TARGET MARKET FORECAST 12.3 As you can probably guess, the formulas in the rest of this row take the growth rate assumption in column B and apply it to the other cells, after the initial value in column C. You add 1 to the growth rate and multiply it by the previous year to get the next year’s calculated amount. You can create a simple market analysis by estimating the number of potential customers for each segment and the growth rate, as shown in this example. Once you...
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