Transcript Market Orientation - Technology Business Development Center

Defining the Opportunity
Douglas Amyx, Ph.D. College of Business
Louisiana Tech
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Question:
How do we know if we have a worth
while product or service?
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Answer:

By asking our customers. Our focus
must be on the customer – i.e., a
Market Orientation. Market research,
the process of collecting, analyzing,
and reporting findings relevant to a
marketing situation, facilitates a market
orientation.
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Primary Research Data

Data collected specifically for the research
problem under investigation. Provides the
advantage of addressing the issue of
concern. Its major disadvantage is that it
tends to be costly, time consuming, and
includes extensive planning.
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Secondary Research Data
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Data collected for some other purpose
but can be used for the problem at
hand (e.g., Census data). It offers the
advantage of being less expensive than
primary data but is not always available
for strategy-specific research questions.
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Market Research Answers the
questions:
Who will buy?
 What will they buy?
 Why will they buy?
 Where are the customers?
 When will the customers buy?
 How many customers are there?
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Assess Your Market Viability
Verify the general viability of your
product, market, financing, and
technology through credible
sources…again, that means objective
research, not just a subjective opinion.
 Empirical data (primary or secondary)
is necessary (e.g., sales data, economic
reports, industry facts, observed
purchase patterns, etc.)
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Scales of Measurement
Nominal – identity (e.g. male/female)
 Ordinal – order (e.g. preference for
brands)
 Interval – comparison of intervals (e.g.
attitude toward brands)
 Ratio – comparison of absolute
magnitudes (e.g. probability of
purchase)
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Sample Nominal Scale
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These scales help answer the question
of who will/will not buy by identifying
basic information in a survey.
Gender: Male__ Female __
 Age: 18-29__ 30-45__ 46+__
 Marital Status: single__ married__
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Ordinal
Help identify order preferences among
choices.
 e.g., Please rank order your
preferences of the following competing
brands from favorite to least favorite.
Coke
Pepsi
Dr. Pepper
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Sample Interval (Likert) Scale
Strongly Neutral Strongly
Disagree
Agree
The bank offers
Courteous service __ __ __ __ __
1 2 3 4 5
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Sample Ratio Scales
How Likely are you to purchase brand X?
0-100%______
In what quantity do you expect to
purchase brand X? ______
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Qualitative Measures
Open ended questions: Why did you
buy that brand?
 Observation of consumers in natural
setting
 Focus groups
 In-depth interviews
 Projective techniques
 Thematic Apperception Test T.A.T.
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Feel the Customer’s Pain
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Its all about the customer…understand
his/her unmet needs (pain) and create
a product or service that meets the
need (resolves the pain). Do not focus
on the product/service…Do focus on
the benefit(s) to the customer. Use
Marketing to sell the benefit.
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What is Marketing?

Marketing is an organizational function
and a set of processes for creating,
communicating and delivering value to
customers and for managing customer
relationships in ways that benefit the
organization and its stakeholders.
(American Marketing Association 2004)
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Create a Unique Value
Proposition
Create a value offering for your
customers with unique and meaningful
benefits. Avoid becoming a
commodity.
 For Example, what do Nike, Fed Ex, &
Toyota offer?
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Nike offers advanced
ergonomic designs
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FedEx offers time & place
utility
FedEx creates a
unique value
proposition with
Sunday deliveries
based on customer
requests and
market demand
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Toyota offers reliability
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Define The Opportunity
Assess Market Opportunities based on
your business concept
 Understand Megatrends
 Examine the forces that affect the
business environment
 Evaluate competitors
 Evaluate yourself & your strategy
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Assess Market Opportunity

Examine the market conditions to
determine if a viable market
opportunity exists for your product or
service idea.
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Market Opportunity Analysis
(MOA)
Can the benefits involved in the
opportunity be articulated convincingly
to a defined target market?
 Can the target market be located and
reached with cost-effective media and
trade channels?
 Does the company possess or have
access to the critical capabilities and
resources needed to deliver the
customer benefits?
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Market Opportunity Analysis
(MOA)_2
Can the company deliver the benefits
better than any actual or potential
competitors?
 Will the financial rate of return meet or
exceed the company’s required
threshold for investment?
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Business Opportunity Analysis
Fads
 Trends
 Megatrends
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10 Megatrends Shaping the
Consumer Landscape
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Aging boomers
Delayed retirement
Changing nature of
work
Greater educational
attainment
Labor shortages
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Increased immigration
Rising Hispanic
influence
Shifting birth trends
Widening geographic
differences
Changing age
structure
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Business Environmental
Forces
Economic
 Natural
 Technological
 Political-Legal
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Economic Forces
Purchasing Power
 Income distribution
 Savings Rate
 Debt
 Credit Availability
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Natural Forces
Shortage of raw materials
 Increased energy costs
 Anti-pollution pressure
 Governmental protection
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Technological Forces
Pace of change
 Innovation opportunities
 Increased regulation
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Political-Legal Forces
Increased business legislation
 Special interest group growth
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Analyzing Competitors
.
Market Share/Customer Loyalty
Competitive Advantage(s)
Weaknesses
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Competitive Forces Assessment
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SWOT Analysis
.
Strengths
Weaknesses
Opportunities
Threats
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Evaluate Your Strategy
Create the building blocks of Marketing
Strategy (your plan of action). The
basic pieces of any successful
Marketing Strategy must include:
 Market Segmentation
 Target Marketing
 Positioning
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Market Segmentation Defined
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The process of dividing a heterogenous
group into smaller, homogeneous
clusters or segments who contain
people with similar needs within each
segment and significant, meaningful
differences between each of the
segments.
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Major Markets
Consumer markets
 Business markets
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Ways to Segment Consumer
Markets
.
Geographic
Demographic
Psychographic
Behavioral
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Demographic Segmentation
.
Age and Life Cycle
Life Stage
Gender
Income
Generation
Social Class
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PRIZM Data
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Characteristics of Business
Markets
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Close supplier-customer relationships
Professional purchasing
Many buying influences
Fewer, larger buyers
Multiple sales calls
Inelastic demand
Geographically concentrated buyers
Direct purchasing
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Target Marketing
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The process of identifying a specific
group of customers who have unique,
identifiable needs, have the authority,
ability, and desire to make an exchange
with.
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Positioning

The art & science of fitting the product
or service to one or more segments of
the broad market in such a way as to
set it meaningfully apart from
competition. Positioning affects how
customers perceive your company and
its products, and perception is reality!
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Positioning approaches
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Perception must be managed, and can be
based on any of the following:
Product attributes – Apple first stressed ease of use
Price/Quality – Rolex, expensive but worth it
Application – Arm & Hammer baking soda has many uses
Product Class – Amtrak vs. planes, CDs vs. MP3
Product User - Valvoline appeals to car enthusiasts
Competitor - Avis “tries harder,” Coke vs. Pepsi
Cultural Symbol - Ronald McDonald, Jolly Green Giant
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Competitive Advantage
Strategies
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Overall Cost Leadership
Differentiation
Focus
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Differentiation
Where product or service is perceived
as unique or better than competitors’.
 Value may be added through
differentiation.
 E.g., Frank Purdue’s Chicken
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Differentiation Strategies
.
Product
Personnel
Channel
Image
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Product Differentiation
Product form
Style
 Design
Features
 Performance
Conformance
 Delivery
Durability
 Ordering ease
Reliability
 Installation
Maintenance
 Customer training Customer Consulting
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Personnel Differentiation:
Singapore Airlines
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Channel Differentiation
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Image Differentiation
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Summary of Major
Market Orientation
 Market Research
 Assess Market Opportunities based on
your business concept
 Consider Market Trends
 Examine Environmental Forces
 Develop Your Strategy
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Questions
?
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