COMPANY
SERVICES | feasibility study
 

 

STEP 2: Elaborate your product-market concept (PMC) - in five steps

 

“Every offer creates its own demand..." Say's Law

Olivier's Amendment: "...if you produce affordable quality!"

 

 

2.1 Define investment opportunity
2.2 Calculate cost of goods, contribution and profitability

2.3 Define production and market risks
2.4 Define market arrangements
2.5 Elaborate PMC requirements


2.1 Define investment opportunity | Back to top

Investment opportunity                         Product opportunity
   Existing product     New product

 

Market Opportunity

Existing market

Penetration 
(increase market share)

 

Product development

New market

Market development

Total diversification of products and markets



2.2 Calculate CB1 cost of goods, contribution and profitability | Back to top

Jump to CB1 cost price analysis and calculate break even volumes of sales and break even volumes of raw materials needed.


2.3 Define production and market risks | Back to top

Investment opportunity           Evaluate your abilities
Production risks  Ability to procure more raw material than needed for the break-even volume
Ability to procure other ingredients and packing material
Ability to control variable cost of production
Ability to control quality and food safety
Ability to control fixed costs
Market risks Ability to sell and deliver more outputs than the break-even volumes
Ability to maintain a price level to allow profits


2.4 Define market arrangements | Back to top

Market arrangement                                 Production Risk
Low High
Market risk Low

Spot market

Backward integration
High Forward integration Vertical Integration


2.5 Elaborate your PMC requirements| Back to top

2.5.1. Production requirements
Technological process characteristics
  • length of production cycle
  • minimum capacity and utilization %
  • degree of complexity
  • factor intensity (value  /volume ratio)
availability and comparative advantages of
  • cheap raw material
  • cheap labor
  

2.5.2. Supply chain requirements.

We assist to elaborate:

Market arrangements
  • spot market
  • long term contracting
  • vertical integration
number and function of collection points
transport, logistics & handling
trade regulations
  

2.5.3. Market requirements.

We assist to elaborate:

Product quality
  • Industrial ingredient or consumer product
  • Conventional or organic
  • Certification, ISO 22000, HACCP, EUREP-GAP, EKO
Packaging
Maximum sales price
Minimum offered quantity
Timing of delivery

  Design: KVL Reclame