Entry, Target & Potential Market Diagram

1. Entry, Target & Potential Market Diagram Use-it Cases ToolTips • To develop this diagram you need to have researched and selected information that will help you develop the size of your market. • Your first step is figure out the potential market size by identifying how much money can be spent on your product if everyone who meets your minimal criteria buys your product. There are two general approaches: • The bottoms-up approach takes census-like information to determine how many people will buy your product and how often they will buy it over the lifetime of the product, then multiply that number times the price. • The industry approach is to find all competitors (direct, indirect and alternative) and determine how much money is directed toward those efforts. Total up all possible categories. • Next, identify the size of your target market by revising the potential number. You can narrow the bottoms-up number by applying more stringent criteria to get to the people who are most likely to buy your product. You can also look to fine tune the industry approach number by determining those who are likely to switch. Another method is to look at your marketing strategy and determine the reach you will have and factor that into revising your potential. • The entry market size is more under your control. Look at your sales approach and determine the timeframe you want to establish as market entry then optimistically, what you can possibly achieve if 100% of your sales and marketing efforts are effective. • Your final picture needs to provide data sources and explain not only your definition of each of the market segments that you are sizing, but also rationale for why the numbers make sense to you and should make sense to others who are interested in your business opportunity. Case Study: Luminate Technologies • Luminate Technologies is developing intelligent buying guides (personalized product advisors) to enable a new generation of business to consumer web sites and in-store kiosks. Luminate’s approach is fundamentally different to using the search and browse features on a Web site. Search and browse are both time consuming and leave the burden of finding the best product squarely on the customer – resulting in an inferior experience and lower conversion of visits to sales. Among eCommerce market research companies, Jupiter Research –an online market research company – has identified Buying Guides as a feature that would offer an online merchant a significant competitive advantage. Our technology will do the foot-work for consumers looking to buy products and services, using Luminate’s state-of-the-art semantic web and artificial intelligence technologies.

2. Luminate Technologies • Online retail sales will continue to grow at a CAGR of 12% through 2010 reaching $144 Billion. • Consumer Advertisers account for 54% of the overall internet advertising revenue. This segment is led by the retail sector that brings in 46% of the overall consumer ad revenue. • Our entry market is the “Big Box” retail stores in the following segments • Home Improvement • Consumer Electronics, • Warehouse, Clubs • Supercenters Sources: Jupiter Research, IAB, Luminate Market Sizing Model

3. Summary statements about growth. • Describe the method or logic behind your sizing estimates. • Describe your entry market and indicate who will be addressed in your initial drive to sell your product Sources: Respected Market Resources