Begin your market analysis by defining the market in terms of size, structure, growth prospects, trends, and sales potential.
The total aggregate sales of your competitors will provide you with a fairly accurate estimate of the total potential market.
The target market narrows down the total market by concentrating on segmentation factors that will determine the total addressable market -- the total number of users within the sphere of the business's influence.
The segmentation factors can be geographic, customer attributes, or product-oriented.
A market analysis also enables the entrepreneur to establish pricing, distribution, and promotional strategies that will allow the company to become profitable within a competitive environment.
In addition, it provides an indication of the growth potential within the industry, and this will allow you to develop your own estimates for the future of your business.
For instance, within the beer brewing industry, the total market potential would be the total sales of malt beverages in the United States, which is .2 billion.
Once the size of the market has been determined, the next step is to define the target market.
A company's positioning strategy is affected by a number of variables that are closely tied to the motivations and requirements of customers within the target market as well as the actions of primary competitors. Once you've answered your strategic questions based on research of the market, you can then begin to develop your positioning strategy and illustrate that in your business plan.
The strategy used to position a product is usually a result of an analysis of your customers and competition. What specific attributes does your product have that your competitors' don't? A positioning statement for a business plan doesn't have to be long or elaborate.