Situational Analysis . Understanding the Market Definition and Measurement. Market Definition. Three dimensions of definition: Works from broad to narrow. Identifies all possible opportunities, enabling business to be proactive and to anticipate consumer needs. First Dimension:.
Understanding the Market Definition and Measurement
Generic need = thirst
Competing product classes =
milk, soda, coffee, tea, juices, water, etc.
Product class = coffee
Competing forms = whole bean, ground, instant, coffee bags, etc.
Product form = whole bean
Competing brands = Folger’s, Starbuck’s, Millstone, Gevalia, etc.
Everyone in U.S. > 14 years buys, on average, 4 CD’s per year at ave. price of $14/CD
Market attracts approx. 5 million new customers/year ≈ 70 mill.
MD = (65 mill. X 400 minutes/yr.) +
(5 mill. X 200 minutes/yr.)
= 27 billion minutes/year
To predict sales for 1st quarter 2000:
Sales = $125K + ($125K x .25)
= $125K + $31.25K
product awareness x (70%)
product attractiveness x (65%)
intention to buy x (60%)
product availability x (60%)
product purchase (50%)
MDI= current market demand
maximum market potential