Transcript Ch 3 marketing study

Chapter (3)
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MARKETING FEASIBILITY STUDY
Lecturer.Ahmed El Rawas
chapter content
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What is marketing study?
What is marketing Mix?
What is market structure?
What is the Product-Market Growth Matrix?
What is SWOT analysis?
What is competitive profile?
What is market segmentation?
What is customer analysis?
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Lecturer.Ahmed El Rawas
Marketing research
Marketing research is the function that links the
consumer, customer and public to the market
through information.
The goal of marketing research is to identify and
assess how changing elements of the marketing
mix impact consumer behavior.
Marketing research consists mainly in the analysis of
demand, competition, consumer behavior,
consumer needs, competitive products and
marketing tools.
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Marketing strategy
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 Is a process that can allow an organization to
concentrate its limited resources on the greatest
opportunities to increase sales and achieve a
sustainable competitive advantage.
 Marketing strategies based on market dominance.
Typically there are three types of marketing
dominance strategies.
1. Leader
2. Challenger
3. Follower
Marketing structure
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 Traditionally, marketing analysis was structured into
three areas, customer analysis, company analysis
and competitor analysis. So called “3Cs” analysis.
More recently, it has become fashionable in some
marketing circles to divide these further into certain
“five Cs” customer analysis, company analysis,
collaborator analysis, competitor analysis and
analysis of the industry context.
Lecturer.Ahmed El Rawas
(2)Marketing Mix
 The 'marketing mix' is a set of controllable, tactical
marketing tools that work together to achieve
company's objectives.
 The term marketing mix was coined in 1953 by Neil
Borden.
 Marketing mix includes product, place, promotion
and price.
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4PS
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Four Ps
 Elements of the marketing mix are often referred to
as 'the four Ps':
 Product - A tangible object or an intangible service
that is produced or manufactured on a large scale
with a specific volume of units. Intangible products
are often service based like the tourism industry &
the hotel industry.
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Four Ps
 Place – Place represents the location where a
product can be purchased. It is often referred to as
the distribution channel. It can include any physical
store as well as virtual stores on the Internet.
 Promotion – Promotion represents all of the
communications that a marketer may use in the
marketplace. Promotion has four distinct elements advertising, public relations, word of mouth and
point of sale.
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Promotional mix
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Advertising: presentation and promotion of ideas, goods
or services by an identified sponsor. Ex print ads, radio,
television, billboard, brochures, catalogs, posters, web
pages and emails.
2. Personal selling: a process of helping and persuading one
or more prospects to purchase a good or service through
the use of oral presentation.
3. Sales promotion: media and non media communication
for a limited time to increase consumer demand. Ex
coupons and exhibition.
4. Public relations
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Lecturer.Ahmed El Rawas
Four Ps
 Price – The price is the amount a customer pays for
the product. It is determined by a number of factors
including market share, competition, material costs,
product identity and the customer's perceived value
of the product. The business may increase or
decrease the price of product if other stores have the
same product.
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Lecturer.Ahmed El Rawas
Four Cs
 The Four Ps is also being replaced by the Four Cs
model, consisting of consumer, cost,
convenience, and communication. The Four Cs
model is more consumer-oriented and fits better in
the movement from mass marketing to niche
marketing. The product part of the Four Ps
model is replaced by consumer or consumer
models, shifting the focus to satisfying the consumer.
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Lecturer.Ahmed El Rawas
Four Cs
 Pricing is replaced by cost, reflecting the reality
of the total cost of ownership. Many factors affect
cost
 Placement is replaced by the convenience
function.
 promotions feature is replaced by
communication.
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Lecturer.Ahmed El Rawas
(3)Market structure
 In economics, market structure (also known as
market form) describes the state of a market with
respect to competition.
 Perfect competition, in which the market consists
of a very large number of firms producing a
homogeneous product.
 Monopolistic competition, also called
competitive market, where there are a large number
of independent firms which have a very small
proportion of the market share.
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Lecturer.Ahmed El Rawas
Market structure
 Oligopoly, in which a market is dominated by a
small number of firms which own more than 40% of
the market share.
 Monopoly, where there is only one provider of a
product or service.
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Market share expectation
Market Share Before Entry
5%
Market Share After Entry
25%
28%
33%
17%
Gap
Movenpick
Hilton
Intercotinental
Four seasons
14%
20%
11%
30%
Small World
Movenpick
Hilton
Intercotinenta
Four seasons
17%
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(5)Product-Market Growth Matrix
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Product-Market Growth Matrix
 The matrix consists of four strategies:
 Market penetration (existing markets, existing
products): Market penetration occurs when a
company enters/penetrates a market with current
products. The best way to achieve this is by gaining
competitors' customers (part of their market share).
Other ways include attracting non-users of your
product or convincing current clients to use more of
your product/service, with advertising or other
promotions. Market penetration is the least risky
way for a company to grow.
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Product-Market Growth Matrix
 Product development (existing markets, new
products): new products need not be new to the
market; the point is that the product is new to the
company. For example, McDonald's is always within
the fast-food industry, but frequently markets new
burgers. Frequently, when a firm creates new
products, it can gain new customers for these
products. Hence, new product development can be a
crucial business development strategy for firms to
stay competitive.
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Lecturer.Ahmed El Rawas
Product-Market Growth Matrix
 Market development (new markets, existing
products): An established product in the
marketplace can be targeted to a different customer
segment, as a strategy to earn more revenue for the
firm. For example, Lucozade was first marketed for
sick children and then target athletes. This is a good
example of developing a new market for an existing
product. Again, the market need not be new in itself,
the point is that the market is new to the company.
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Lecturer.Ahmed El Rawas
Product-Market Growth Matrix
 Diversification is a form of growth marketing
strategy for a company. It seeks to increase
profitability through greater sales volume obtained
from new products and new markets.
 Diversification (new markets, new products): Virgin
Cola, Virgin Megastores, Virgin Airlines, Virgin
Telecommunications are examples of new products
created by the Virgin Group of UK, to leverage the
Virgin brand. This resulted in the company entering
new markets where it had no presence before.
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Lecturer.Ahmed El Rawas
Types of diversification
Concentric diversification
 This means that there is a technological similarity
between the industries, which means that the firm is able
to leverage its technical know-how to gain some
advantage. The technology would be the same but the
marketing effort would need to change. It also seems to
increase its market share to launch a new product which
helps the particular company to earn profit. However,,
Addition of tomato ketchup and sauce to the existing
"Maggi" brand processed items of Food Specialties Ltd. is
an example of Technological-related concentric
diversification.
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Types of diversification
Horizontal diversification
 The company adds new products or services that are
technologically or commercially unrelated (but not
always) to current products, but which may appeal to
current customers. In a competitive environment, this
form of diversification is desirable if the present
customers are loyal to the current products and if the
new products have a good quality and are well promoted
and priced.. In other words, this strategy tends to
increase the firm’s dependence on certain market
segments. For example company was making note books
earlier now they are also entering into pen market
through its new product.
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Lecturer.Ahmed El Rawas
Types of diversification
Conglomerate diversification (or lateral
diversification)
 The company markets new products or services that have
no technological or commercial synergies with current
products, but which may appeal to new groups of
customers. The conglomerate diversification has very
little relationship with the firm’s current business.
Therefore, the main reasons of adopting such a strategy
are first to improve the profitability and the flexibility of
the company, and second to get a better reception in
capital markets as the company gets bigger. Even if this
strategy is very risky, it could also, if successful, provide
increased growth and profitability.
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(6)SWOT Analysis
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SWOT analysis
 Strengths: attributes of the person or company that
are helpful to achieving the objective.
 Weaknesses: attributes of the person or company
that are harmful to achieving the objective.
 Opportunities: external conditions that are helpful
to achieving the objective.
 Threats: external conditions which could do damage
to the business's performance.
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SWOT analysis
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 Internal environment
 Strengths
 1- Service quality
 2- Service fees
 3- Location
 4- Safety
 5- Speed
 6- Reliability
 7- Environment
Lecturer.Ahmed El Rawas
SWOT analysis
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 Weakness
 1- High cost of the project
 2- Long construction years
 3- Intangibility
 5- high Operating cost
 6- Working hours
Lecturer.Ahmed El Rawas
SWOT analysis
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 External environment
 Opportunities
 1-Growth rate
 Threats
 1- Energy cost
 2- high Competition
 3- bad transportation
Lecturer.Ahmed El Rawas
(7)Competitive profile
 Competitive profile is a profile prepared by the
researcher through primary or secondary data, its
function is to compare between your project and
other similar competitors. Comparison includes
pricing, quality packaging etc…
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Lecturer.Ahmed El Rawas
(8)Market segmentation
A market analysis can be made for either the market as
a whole or each market segment separately. It is
advisable, however, to divide the market into certain
segments, on the basis of differentiated customer
behavior. Market segmentation is, moreover, a
central prerequisite for efficient use of the marketing
tools.
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Lecturer.Ahmed El Rawas
(9)How to Identify Potential Customers,
Clients
 This component of your small business market
feasibility study should be descriptive. Your potential
customers, clients, and contract sources should
include the following:
 A list of current customers, clients, and contracts and
the potential for new or renewed contracts.
 Any sales leads that may generate new customers or
clients.
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Lecturer.Ahmed El Rawas
Analyzing Your Current Market
 This section of a market feasibility study describes
the current market for your product or service. If you
are offering something so unique that there are few
market statistics, you can either use related industry
information, or even conduct your own independent
study.
 Several ways to conduct your own research for new
ideas include: questionnaires addressed to targeted
consumer groups or the general population, or even
customer surveys.
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Lecturer.Ahmed El Rawas
Analyzing Your Current Market
 Any “proof” you have that there is a demand (or
market) for your product or services will help you sell
your idea. This is particularly important if you are
marketing something unique, or within a very small,
specialized market. You need to show that your ideas
is novel because you have found a niche and not
because there is no existing market for the idea.
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Advertising budget
18%
News Paper
29%
Magazines
14%
T.V
Baners
6%
Internet
12%
21%
Flyers&Brochours
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Lecturer.Ahmed El Rawas
Marketing analysis main points (project)
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2.
3.
4.
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Marketing mix
Product ( Quality, packaging, maintenance, service
and design)
Price ( price positioning and strategy)
Place ( channel of distribution, lead time,
transport,)
Promotion ( adv, public relations, sales promotion
)
Type of market.
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Lecturer.Ahmed El Rawas
Marketing analysis main points ( project)
 Target customer and segmentation
 Competitive profile
 SWOT analysis
 Market share
 Analyze current market.
 Pricing strategy
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Lecturer.Ahmed El Rawas