To begin your entry into the e-commerce business, it’s important to define your target group and prepare to compare the market and the competition through analyses. It’s one of the key steps is the initial decision whether or not it’s profitable to establish a business at all, not just online.
The target group
Let’s start by defining the target group. It’s a specific group of people who we want to sell our product to, or who we want to reach through our marketing activities. We create this group based on various parameters, such as age, gender, marital status, income, family, and other specific factors.
The target group needs to be segmented into smaller groups, depending on the type of behavior and the aim of your products. We do this mainly to better target our marketing activities and advertisements. Specific persons may also be added to the groups, who will tell us more about the type, behavior and other characteristics of our key customers.
We may also use the archetype of our ideal customer, which can be used throughout our marketing and also during the process of branding and positioning our brand on the market. This is especially important for those with a fierce competition and those who have a large budget and want to secure their brand from the very beginning.
Market research and competition analysis
Doing business online isn’t easy even despite the many sources that pretend like it is. The advantage of the Slovak market is that there is a significantly smaller number of e-shops than, for example, in the Czech Republic.
If you’re planning to enter the market, it’s a good idea to first perform an analysis of the competition and a full analysis of the market, which will help you find out if you have a chance of succeeding upon entering the market. Based on the results of your analyses, you can also estimate the costs of your marketing and the cost of trying to get noticed among the competition. The analysis of competition is performed based on what we need and we usually try to gain the basic and necessary information.
- How many potential customers are there on the market?
- Is there an interest in my products on the market?
- How many times a year will my product be used and in which seasons?
- How many companies on the market sell similar kinds of products?
- Is the market oversaturated?
- How many people from the target group use the internet and shops online?
Every business should know who its competitors are even before they enter the business scene, in order to make the right decisions and choose the right strategy. We mainly look at:
- Who are our main competitors?
- What are their online activities?
- What is their share of the market?
- What do they do better?
- What is their strategy based on?
- What are their weak sides in the online and offline environment?
The market share is one of the most important metrics that e-commerce or a sales web can use to evaluate the effectiveness of its campaign. It’s important to know the weaknesses of the competition so we can effectively decide on the tactic we want to use to enter the market.
Market development and the future
Nothing lasts forever and the market always changes. It’s important to think in the present but also to look into the future and try to evaluate where the market is going and what awaits the entire business segment. The main thing to think about is whether or not our products or services will be sought after and how market-affecting technologies will evolve. New trends and the future development of the market are crucial.
Before you decide to buy and e-commerce platform or decide to establish your own e-shop, try and evaluate whether or not it’s profitable to enter the market. The above-mentioned analyses and the establishment of a target group based on your goals should help you decide.