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< prev - next > Food processing KnO 100189_Carrying out a feasibility study (Printable PDF)
Carrying out a Feasibility Study
Practical Action
Market feasibility
The first stage is to collect as much information as possible on the potential market for the
products you intend to make. This is achieved by carrying out market research, usually in the
form of a market survey of the target population in the area you intend to sell the product.
I. Market research: the
necessary steps of market
research are as follows:
a. Work out the size of the potential
What is the potential market area?
Who will be the potential
What are the potential outlets?
Who will be the competitors?
How much of the product can be
sold? (what quantities of the
product are already sold and what
quantities of similar products are
being sold?)
What is the seasonality of demand?
What is market research?
Market research is the process of investigating a
market to find out the sales prospects for a product
and how to achieve success with it. It is the set of
activities necessary to obtain the information
required about the market. Market research activities
include the following:
Consumer questionnaires
Tasting tests to see if people accept the
product or which taste they prefer
Interviews with retailers and wholesalers.
Market research is important to avoid the failure of
food processing ventures.
b. Research consumer attitudes towards the new products:
What, where and when do consumers buy?
What are consumers’ preferences about tastes, smell, texture etc?
What is the consumers’ reaction to packaging and labelling?
c. Find out how the new products can be made attractive to consumers:
What are the size units and prices of competing products according to location?
Where are quality weaknesses of the competition?
Which containers are used for competing products?
Which labelling is used by competitors and what are the legal obligations regarding label
and contents?
d. Identify the most appropriate option for distributing products:
Direct to consumers?
To suitable retailers in an area?
To supermarkets (if sufficient quantities can be delivered)?
To wholesalers (suitable for larger processors)?
To institutions and the catering trade?
e. The factors to be
considered in deciding on
the marketing channel to
use include:
Quantities processed and
quantities required by
distributors, transport and
payment arrangements,
margins and mark-ups
Notes on calculation to find the daily production rate
Estimated market size
Estimated share of market
Production required per month to meet 712 kg
market share
Production required per day @ 20 days 35.6 kg
work per month
Minimum process throughput @ 8
4.5 kg/hr
hours per day