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Industry/Market Potential. Understanding Segments and Exploiting Gaps. Mapping the Industry or Market. Key Questions: What products are in the industry? Which markets or customers are served? Who are the current competitors? Where are the competitors found?.

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industry market potential

Industry/Market Potential

Understanding Segments

and

Exploiting Gaps

mapping the industry or market
Mapping the Industry or Market

Key Questions:

  • What products are in the industry?
  • Which markets or customers are served?
  • Who are the current competitors?
  • Where are the competitors found?
segment of the u s beer market

Customer Type (Geographic Region)

Segment of the U.S. Beer Market

North-east

Midwest

South-east

South-west

West

Luxury-priced imports

Product Type

Super premium

Premium beers (except light)

Light beers

Popular budget-priced

Malt liquor

Independent food stores, convenience stores

Bars & Restaurants

Supermarkets

Liquor Stores

Distribution channel

which are the biggest fastest growing and most profitable customer segments
Which are the Biggest, Fastest Growing, and Most Profitable Customer Segments?
  • Data Needed
  • Identification of customer segments (according to needs, behaviors, and key characteristics)
  • Current size and value of each customer segment
  • Probability of each customer segments

Circle size represents millions spend

CUSTOMER SEGMENTS

CUSTOMER SEGMENTS

CUSTOMER SEGMENTS

CUSTOMER SEGMENTS

CUSTOMER SEGMENTS

CUSTOMER SEGMENTS

CUSTOMER SEGMENTS

CUSTOMER SEGMENTS

CUSTOMER SEGMENTS

  • Data Needed
  • Identification of customer segments (according to needs, behaviors, and key characteristics)
  • Current size and value of each customer segment
  • Probability of each customer segments
  • Data Needed
  • Identification of customer segments (according to needs, behaviors, and key characteristics)
  • Current size and value of each customer segment
  • Probability of each customer segments
  • Data Needed
  • Identification of customer segments (according to needs, behaviors, and key characteristics)
  • Current size and value of each customer segment
  • Probability of each customer segments
  • Data Needed
  • Identification of customer segments (according to needs, behaviors, and key characteristics)
  • Current size and value of each customer segment
  • Probability of each customer segments
  • Data Needed
  • Identification of customer segments (according to needs, behaviors, and key characteristics)
  • Current size and value of each customer segment
  • Probability of each customer segments
  • Data Needed
  • Identification of customer segments (according to needs, behaviors, and key characteristics)
  • Current size and value of each customer segment
  • Probability of each customer segments
  • Data Needed
  • Identification of customer segments (according to needs, behaviors, and key characteristics)
  • Current size and value of each customer segment
  • Probability of each customer segments

Segments to Focus On

Segments to Focus On

Segments to Focus On

Segments to Focus On

Segments to Focus On

Segments to Focus On

Segments to Focus On

Segments to Focus On

  • Data Needed
  • Identification of customer segments (according to needs, behaviors, and key characteristics)
  • Current size and value of each customer segment
  • Probability of each customer segments

Segments to Focus On

High

High

High

High

High

High

High

High

High

SEGMENT

PROFITABILITY

SEGMENT

PROFITABILITY

SEGMENT

PROFITABILITY

SEGMENT

PROFITABILITY

SEGMENT

PROFITABILITY

SEGMENT

PROFITABILITY

SEGMENT

PROFITABILITY

SEGMENT

PROFITABILITY

SEGMENT

PROFITABILITY

Low

Low

Low

Low

Low

Low

Low

Low

Low

High

High

High

High

High

High

High

High

Low

Low

Low

Low

Low

Low

Low

Low

High

Low

SEGMENT GROWTH

SEGMENT GROWTH

SEGMENT GROWTH

SEGMENT GROWTH

SEGMENT GROWTH

SEGMENT GROWTH

SEGMENT GROWTH

SEGMENT GROWTH

Circle size represents millions spend

Circle size represents millions spend

Circle size represents millions spend

Circle size represents millions spend

Circle size represents millions spend

Circle size represents millions spend

Circle size represents millions spend

outcomes of segmentation analysis
Outcomes of Segmentation Analysis
  • Who buys our product and why

° (buyer profiles-psycho/socio/geo/demographic)

° Need or function fulfilled

° Problems solved

• Who does not buy our product (light users—non-buyer profiles)

° When purchased

° Where (channel) purchased

slide11

•Rivals & Substitutes° Which competitors are selling what and to whom° What alternatives are buyers purchasing to satisfy the need/function/problem for which our product competes• Segment Attractiveness ° Current size-revenue/profit potential ° Demand penetration/growth ° Competition ° Compatibility with strategy/supply/distribution chain

slide12

Segmentation Gap Analysis Allows Managers to:Divide the market into meaningful and measurable segments according to customers’ profiles (needs, attitudes, behaviors, attributes) and products offered (existing or new).Estimate the size and profit potential of each segment by analyzing the revenue and cost impacts of serving each segment.

slide13

Target segments according to their potential (profit, entry, defensive) and to the company’s ability to serve them in a proprietary way. Invest resources to tailor product, service, marketing, and distribution programs to conform to the needs of each targeted segment. Continuously monitor each segment (customer/product shifts, competition, penetration) and adjust the approach over time as conditions change.

before entry some important questions to ask
Before Entry - Some Important Questions to Ask
  • What gaps will you fill? And why does that gap exist?
  • Will your entry give rise to a new product market?
  • How will your entry affect current product markets?
  • How might current competitors respond to your entry?
  • How will targeted customers respond to your entry?
  • What competitive advantage (if any) will you possess?
  • What might be your major vulnerabilities?
  • What can your firm do to preempt and respond to competitors?
identify potential market gaps
Identify Potential Market Gaps

Can’t afford at this price

Price/cost

Untapped Market Demand

Potential No. of Customers

Competitor’s products satisfy

Competitive Gap

Product does not fit customer’s needs or situation

Usage vs. Needs Compatibility

Performance, speed, features, etc.

Current Business Segment

60%

Noncustomers cannot obtain

Distribution gap

Personal Users 40%

Noncustomers unaware

Usage Gap

slide16

Price/Product line gap

Distribution gap

Expand the product line

a. Fill out existing product line

b. Add product line elements

 Expand distribution

a. Broaden distribution coverage

b. Increase distribution intensity

c. Improve distribution exposure

Stimulate heavier use

a. Find new users by

1  1.Stimulating nonusers to use

2  2.Stimulate light users to use more

3  3.Increase amount used each occasion

b. Find new uses for the product

c. Promote product usage at new times

Penetrate competitors’ positions

a. Direct assault on competitors

b. Attack substitutes

 Defend your present position

Usage gap

Competitive gap

Your sales

three different types of distribution gaps
Three Different Types of Distribution Gaps

1. Distribution COVERAGE Gap

Firm fails to distribute its products in all geographic

regions

2. Distribution INTENSITY Gap

Firm has an inadequate number of outlets to distribute its

products

3. Distribution EXPOSURE Gap

Firm has poor or inadequate shelf space, location,

displays, etc. within outlets

levi s possible growth modes
Levi’s possible growth modes

Existing Products

New Products

Market

Penetration

Strategy

Product

Development

Strategy

Existing

Markets

Market

Development

Strategy

Product/Market

Diversification

Strategy

New

Markets

repositioning levi s
Repositioning Levi’s

High Price

Lewis has figured out that kids

don’t wear the same jeans their

parents do and that trendy

retailers don’t stock the same

lines as J.C.Penny. So it’s creat-

ing a portfolio of dozens of brands

and sub-brands, from cheap

basics to high-priced fashion

Vintage

$125+

Dockers

Equipment

For legs

$100+

Red Line

$100

Sta-Prest

$75

Dockers K-1 $65

Slates

$65

Slates Collection

$60

Red Tab Elesco

$60

Dockers

Premium

$50

Red Tab Dry Good

$45

Silver Tab

$45

Classic

501

$35

Designer

L2

$30

Red Tab

Basics

$30

Dockers

Classic

$30

Low Price