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Market Analysis - PowerPoint PPT Presentation

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Market Analysis
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  1. Market Analysis

  2. Background • Marketing plans can’t but put together without some form of analysis • How do I match my company’s assets with good business opportunities? • Possibilities = markets • market analysis: • finding and measuring business opportunities • targeting and dividing market into niches • suggesting product placement and position in mind of consumer

  3. Market Analysis • marketing requires a great deal of information about consumer needs • marketing research gives the marketing manager data needed to make decisions • required because managers are often hundreds or thousands of miles distant from end users • market analysis is the only way firms can stay in touch with customers and their needs

  4. Discovering Opportunities • most large firms are moving away from “mass” marketing to “target” marketing • mass marketing = production approach of looking at what most consumers want, assumes actions of all consumers are equal • mass marketing = mass production (low-cost, effective, easy), disposal of production • problem: always leaves someone unhappy

  5. Discovering Opportunities • target marketing: consumer needs set the product characteristics and marketing programs • production efforts change to meet needs of targeted groups of consumers • example: you grow grouper, but find out that processers want a variety of different sizes, species. You then become flexible to meet their needs (same holds true for processors, their market) • special needs = more sales, higher sales prices

  6. Discovering Opportunities • target marketing more costs, difficult to manage, but profitable to producer and pleasing to customer • goal: market edge because you offer what others can’t • from the market analysis standpoint, a market is: group of current or possible consumers with similar unmet needs and buying power • defined in terms of consumer needs and not the product being sold!

  7. Discovering Opportunities • problem: consumer needs change slowly, products come and go • example: old-style TV dinners vs microwaveable grouper Florentine • problem: can’t please everyone on a global basis  think regionally or locally! • target marketing recognizes differences in needs: for seafood, there are well-defined regional likes and dislikes • how can you possibly fill all the different needs in a profitable manner (you can’t)

  8. Consumer Demographics • within a defined area, the needs of consumers are often found to be similar • that is, after having divided them into groups according to common descriptions (e.g., age, sex, household size, level of income, level of education, marriage status) • demographics: dividing consumers into groups for easy identification • helps establish more specific consumer needs • information easily obtain for smaller vs. larger areas

  9. Consumer Demographics • by tying consumer needs to demographic info it is possible to find special groups of consumers w/special needs (i.e., the target) • research begins with listing consumer needs, advantages, benefits sought, likes, dislikes • must be fairly specific, but not related to a currently-existing product (e.g., flavor vs. texture) Group 1 Group 2 flavor (sweet to bitter) Group 3 texture (soft to tough) mass marketing would target dashed circle

  10. Consumer Demographics • The previous example indicates that three separate products might be required • products must be significantly different • large enough potential customers in each group • customers must be reached by promotion • needs must be long-lasting to make it worthwhile • This determines your ability to segment a market

  11. Segmentation Marketing • select the product and market area • determine all the needs that future customers might have in the product and market area • form at least three different market segments • find out what characteristics of the product of the product affect the “buy” decision of the consumer • give a name to each product market segment • describe each segment with demographic and other possible consumer-related information

  12. Determination of Marketing Goals • After segments have been established, match these results to your marketing goals • what are your goals wrt this (these) product(s)(i.e., promotion or penetration) • product development: new or improved version (microwaveable vs. frozen block) • market development: motivating people to buy the product (healthy vs. saturated fats) • product diversification: adding products to the product line (4 oz. fillets in garlic/lemon or Cajun spice)

  13. Determination of Marketing Goals • One way to study the market and marketing goals is to look at the chances or possibilities for market growth and projected market share • identifies the best and worst products a firm has to offer • Goal: blend of “stars” and “cash cows” 20 Question Marks Stars Annual Market Growth Rate (%) 10 Cash cows Dogs 0 10 1 0.1 Market Dominance Source: Seperich et al., 1994

  14. Estimation of Market Potential • There are several methods of guessing or estimating possibilities in a market • market possibilities: total number of sales possible in a target market for all producers • sales forecast: level of sales expected for a single firm within the target market • market share: percentage of total sales gained by a single firm (SF/MP)

  15. Estimation of Market Potential • Step 1: determine market potential • Methods: factor approach vs. demographics • Factor approach: uses a series of factors to discover the size of possible market sales for a specific product to achieve the sales forecast • requires gathering information about product usage and consumers

  16. Example of Forecast Approach • presents sales as a percentage of some easily-obtained industry statistic (e.g., gross domestic product, retail sales) • then estimates the firm’s proportion of total industry sales, work your way down: • GDP = $3 trillion • total retail sales of food is 15% of GDP ($3 trillion x 0.15 = $450 billion • supermarkets (retailers) that buy seafood sell 12% of national retail food sales ($450 billion x 0.12 = $54 billion) • 0.5% of their sales are as seafood ($54 billion x 0.005 = $270 million • 15% of this is as grouper ($270 M x 0.15) = $41 million

  17. Another Way: demographics or consumer-side forecast • if demographics show that people who would buy “glow-in-the-dark” grouper are: highly educated, men, have high incomes, live in cities, live in the SW portion of the U.S. and are between 45 and 60 years old; you can estimate size of the market: • population of the U.S. = 290 million • % males is 50% = 145 million • % urban is 40% = 58 million • % in SW is 20% = 11.6 million • % educated is 25% = 2.9 million • % with high income is 25% = 725,000 • % 45-60 yrs of age is 10% = 72,500

  18. Another Way: demographics or consumer-side forecast • Result: 72,500 customers would buy “glow-in-the-dark” grouper • If each consumes two pounds of grouper per month = 24 lbs/yr/customer x 72,500 customers = 1.75 million lbs • If your market research via interviews indicates 20% customers would become regular consumers of GITD grouper, your sales forecast for the first year is 350,000 lbs of GITD • At $10/lb, your sales forecast in $ is $3.5 million

  19. For next time... SEAFOOD MARKETING