Transcript Market Analysis

Market Analysis
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
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
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 (lowcost, effective, easy), disposal of production
• problem: always leaves someone unhappy
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
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!
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)
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
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 currentlyexisting product (e.g., flavor
vs. texture)
Group 1
Group 2
Group 3
texture (soft to tough)
mass marketing would target dashed circle
Consumer Demographics
• The previous example indicates that three separate
products might be required
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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
Segmentation Marketing
1) select the product and market area
2) determine all the needs that future customers
might have in the product and market area
3) form at least three different market segments
4) find out what characteristics of the product of
the product affect the “buy” decision of the
consumer
5) give a name to each product market segment
6) describe each segment with demographic and
other possible consumer-related information
Determination of Marketing
Goals
•
After segments have been established, match
these results to your marketing goals
1) what are your goals wrt this (these) product(s)(i.e.,
promotion or penetration)
2) product development: new or improved version
(microwaveable vs. frozen block)
3) market development: motivating people to buy the
product (healthy vs. saturated fats)
4) product diversification: adding products to the
product line (4 oz. fillets in garlic/lemon or Cajun
spice)
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
10
Cash
cows
Dogs
0
10
1
Market Dominance
Source: Seperich et al., 1994
0.1
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)
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
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
Another Way: demographics
or consumer-side forecast
• if demographics show that people who would buy “glowin-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:
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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
Another Way: demographics
or consumer-side forecast
• Result: 72,500 customers would buy “glow-inthe-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
For next
time...
SEAFOOD
MARKETING