Topic 2 · Understanding Your Market

Market Research & Customer Segmentation

Know your customer, your competition, and your market size before investing. Data-backed decisions reduce risk.

Primary Research Secondary Sources Customer Segments Competition

Primary Research Methods

Primary research means talking directly to potential customers. It's the fastest way to validate your assumptions.

Methods

🎤 Customer Interviews (5–10 people)
1:1 conversations. Ask: "How do you currently solve this problem?" "What would make you switch?" "What would you pay?" Don't sell — just listen.
📊 Surveys (Google Forms — free)
For 20–200 responses. Keep under 10 questions. Share via WhatsApp groups, Facebook, local associations.
🏪 Observation / Ethnography
Visit markets, shops, festivals. Watch how customers browse and buy. Count how many customers visit competitors per hour.
🧪 Test Sales (MVP)
Sell a small batch before investing in production. Haat bazaar, Facebook Marketplace, or WhatsApp group first.

10 Questions to Ask Customers

1. What problem does this product solve for you?
2. How often do you face this problem?
3. What do you currently use instead?
4. What do you dislike about current options?
5. What would the ideal solution look like?
6. How much do you currently pay for this?
7. What's the maximum you'd pay for a much better option?
8. Where do you buy this type of product?
9. Who else in your household / business uses it?
10. Would you recommend a better option to friends?

Secondary Data Sources (Nepal)

Free publicly available data for Nepal market sizing, demographics, and trade flows.

SourceData AvailableAccess
CBS NepalPopulation, income, consumption surveys, household surveys by districtcensusnepal.cbs.gov.np — free
TEPC Trade DataExport commodity volumes, destination countries, 5-year trendstepc.gov.np — free
Trade Map (ITC)International trade data by HS code, Nepal export/import flowstrademap.org — free registration
Google TrendsSearch interest for keywords in Nepal over timetrends.google.com — free
Meta Audience InsightsFacebook audience size by interest + location in NepalFacebook Ads Manager — free
FNCCI / CNI ReportsAnnual sector surveys, business confidence indexfncci.org / cni.org.np — free
NRB Annual ReportsCredit flows by sector, BFI lending statisticsnrb.org.np — free
DFTQC / MOF statsFood import/export volumes, agriculture dataGovernment portals — free
Market sizing formula: Total Addressable Market (TAM) = Number of target customers × Average annual spend per customer. Example: 500,000 households in Bagmati × NPR 5,000/year on organic food = NPR 2.5 Billion TAM.

Nepal Customer Segments

Domestic Segments

🏙️ Kathmandu Valley Urban (3M people)
Quality-conscious, online shoppers, disposable income NPR 30,000–100,000/month. Active on Instagram and Facebook.
🏘️ Secondary Cities (Pokhara, Biratnagar, Butwal…)
Growing middle class, price-sensitive but brand-aware. Buy via local shops + Facebook Marketplace.
🌾 Remittance Households (Terai, Hills)
High purchasing power (USD 400–1,500 inflow/month). Aspire to branded, quality products.
🏛️ Institutional Buyers (Hotels, Schools, Hospitals)
Bulk buyers. Need consistent quality, invoices, delivery schedule. High value, longer sales cycle.

Export Segments

🇮🇳 India Border Trade
High-volume, informal trade via land borders. Products: fresh produce, processed food, handicrafts.
🌏 Diaspora Markets (UAE, Qatar, Malaysia, Korea)
3M+ Nepali workers abroad. Strong demand for Nepali food, pickles, spices, handicrafts via online retail.
🇪🇺 Premium Export (EU, USA, Japan)
Fair trade, organic, artisan products. Need certifications (ECOCERT, fair trade, GI tags). High margin, complex compliance.
🤝 B2B International Buyers
Importers, distributors, supermarket chains. Need MOQ, consistent quality, certifications, lead time guarantees.

Competitive Analysis

How to Map Your Competition

1
List all competitors
Direct (same product), indirect (different product, same customer need), and future (who could enter your market).
2
Research each one
Visit their shops, buy their product, check their Facebook/website, read reviews. Note price, quality, packaging, distribution.
3
Find the gap
What are customers complaining about? What need is underserved? That's your positioning opportunity.
4
Define your differentiation
Price, quality, origin, certifications, speed, customer service, packaging. Pick 1–2 to lead with.

SWOT Analysis Template

Strengths
What you do better
Unique resources
Cost advantages
Weaknesses
What competitors do better
Resource gaps
Missing capabilities
Opportunities
Market gaps
Underserved segments
Policy changes
Threats
New competitors
Import competition
Regulatory changes