Introduction
Several things have to be considered when doing the market feasibility study of a product. This essay broadly categorises these said factors into three groups: ethical, regulatory and financial aspects of market feasibility.
Ethical Aspect of Market Feasibility
Gender plays a big role in market feasibility. The target population has not been divided based on sex but rather, based on an individual’s interest in sports. As stated, the app will have several fractions such as an online store, merchandise, discounts on some items from partner stores, and events. Both male and female users will be able to shop for the favourite merchandise through the app and get similar discounts. On the same breath, the app is age inclusive.
Indeed, children aged 14 and lower also watch and actively follow sports, especially if they play the same sports in school. Thus, the app will target sports lovers aged 12 through to 65. However, a challenge will arise on whether the younger target population (under 18 years old) will require parental consent to access the app. This can be a challenge due to both cultural and religious beliefs. The developer has to ensure that the marketing strategy clearly states that the app is also children friendly.
It is also important to consider cultural and religious ethics as affected by the app. UAE is made up of 80% Muslims with a population of approximately 9 million. 28% of the 9 million are women. Due to cultural and religious limitations, many of the women might not have access to the app due to limitations of sporting among women in some cities. However, many cities in UAE have made strides to ensure gender equality and equity. Thus, one can argue that the future market potential is very large and positive. It is important to point out that all the ethical considerations mentioned can be resolved. Therefore, using the ethical aspect of market feasibility study, one can argue that the product will be successful in the market identified.
Regulatory Aspect of Market Feasibility
Just like in any other country, there are several regulations that guide how to conduct business in UAE. This regulatory aspect will analyse system developments and zoning restrictions that would affect the effective production and market uptake of SPORTEC Mobile App. As mentioned, the company will be registered as a sole proprietorship. This makes regulations easy as the sole owner will be a citizen of UAE.
Regulations state that the proprietor does not have to contribute any money towards the starting capital and can have foreign investors. The developer will, however, need part of the initial capital before registration of the business as required by the Ministry of Commerce. This money is used as a guarantee in case of any liabilities, but can be accessed immediately after registration.
A sole proprietorship is desired as it takes a relatively short time to register and set-up. Additionally, people trust locally-owned businesses, thus, the strategy would help penetrate the market better. Sole proprietorship also ensures that zoning regulations are avoided. In Dubai, companies owned fully by foreigners can only be hosted in the Free Zone. Running costs of companies in this area are very high due to higher rental and utility costs, among other things. The regulation aspect of the market feasibility study is important as it determines the time needed to start production, and other regulations that might affect the prompt and effective production and implementation of a project. From this study, one can argue that the market approach proposed for SPORTEC is viable.
Financial Aspect of Marketability Feasibility
One of the core things that comes out in the financial study is the fact that the target population can watch their desired games for free as there is no gate fees in UAE. Thus, streaming rights and live updates on games might not be strong selling points. The table below highlights operational costs for the first year.
The financial feasibility study below is for the first year of operation based on possible charges acquired from advertising, merchandise and discounts accrued from store partners. A sensitivity analysis was done to speculate on the usage of the app on a monthly basis. The average price per sign in for advertising across the board is 0.1 dollars. The other average amounts used were calculated through research on similar apps.
The yearly sales projection will then translate to $204,000 for high use, $102,000 for medium use and $44,400 for low use. Whereas there is a significance difference between the medium and low use revenues and the running costs, it is important to note that the running costs also include one-off payments such as office set-up and app development. Regardless, the market feasibility shows that the product can be successful in the target market. However, proper marketing strategies have to be implemented for the project to be a success.