template to assess demand of a new service..

assessing demand.jpg

I use this example often when trying to assess the size of the market opportunity. It often comes back with a sobering picture. You would have to modify this methodology to suit your own application but the basic steps are the same – i.e. think in terms of concentric circles.

Start with the largest population base and work inwards. Some of these stats are not easy to obtain(for example – the population of a country may be easy to find but not the percentage of handsets supporting J2ME in that country). In that case, if you are really serious, I recommend you actually buy some of these stats from research companies. On the long run, they may save you more money!

A sample set of steps I use is as below

a) What is the population of the country?

b) What is the percentage of handset penetration amongst this population

c) Which operators are you targeting within this population?

d) Which handsets are you targeting within this population?

e) What is the technology of deployment for example Java, SMS, WAP etc?

f) Does the application have any special technology needs such as location-based services? How many people have handsets equipped with this technology?

g) What does a segmentation analysis of the subset reveal?(simplest segmentation is male/female. Prepay/postpay etc)

h) What are the distribution channels to market for the segments we are targeting?

i) What proportion of this subset do we expect to hit and convert to customers based on our marketing budget?(i.e. our marketing dollars)

This will give you your target audience.

Thus, your target audience subset times number of potential downloads per month should give you an idea of your monthly revenue. This could then be tied against your cost base including your development costs, porting costs etc to arrive at a more tangible picture of success/failure of the new service.

source: www.opengardens.futuretext.com. All other sources as indicated