Chapter 6 Market Analysis

1. Chapter 6Market Analysis Business Management Mrs. Deady

2. 6.1 Doing Market Research Objectives Def: Market Research – process of systematically collecting, recording, analyzing and presenting data related to marketing goods and services • Define an area of analysis for your research • When to use different types of research • Develop and conduct effective market research

3. 6.1 Definitions • Industry – collection of businesses with a common line of products or services • Market – group of people or companies that have a demand for your product or service • Carrying capacity – is the industry able to support new growth, support expansion • Complexity – number and diversity of contacts with which you must deal • Target Market – particular group of customers you are interested in to sell your product

4. 6.1 Definitions • Market Segmentation – process of grouping a market into smaller subgroups defined by specific characteristics. • Industrial Market – goods or services bought for business use • Primary Data – information you obtain specifically for your study • Secondary Data – information collected by someone else

5. Market Segmentation Process of grouping a market into smaller subgroups: • Geographics – region, state, country, city and/or area • Demographics – age, gender, income, occupation, education ,religion, race, nationality • Psychographics – personality, values, opinions, beliefs, motivations, attitudes, activities and interests • Product Benefits – knowledge of and personal experience with a product or service

6. Steps in the Research Process • Identify the Information needs • Obtain Secondary resources • Collect Primary Data (Disadvantages are questionnaires not returned, returned multiple times, cost and accuracy) • Organize the Data • Analyze this Data

7. Three Types of Market Research • Exploratory – when you know little about a subject • Focus Group • Government or industry publications • Descriptive – to determine a customer profile • Questionnaire • Interviews • Observation • Historical – study the past to find patterns to predict the future

8. Data Interpretation • Data Mining involves collecting data from one or more existing databases and looking for relationships among the data. • Used to find or predict: • Market segmentation • Customer or client profiling

9. 6.2 Industry and Market Analysis Objectives • Explain how to research an industry • Identify a customer profile and customer needs analysis

10. 6.2 Definitions • Barriers to Entry – conditions that make it difficult or costly for outside forms to enter a market or compete with established firms • Economies of Scale – cost of producing one unit of a good decreases as the volume of the production increases • Brand Loyalty – tendency to buy a particular brand • Mass Marketing – trying to reach all customers with a single marketing plan • Market Share – portion of total sales generated by all competing companies in a given market

11. Definitions, cont’d • Niche – small, specialized segment of the market, based on customer needs • Market Positioning – act of identifying a specific market niche for a product • Competitive Advantage – feature that makes a product more desirable than its competitors’ products • Customer Profile – complete picture of prospective customer; geographic, demographic, psychographic and product benefits • Customer Needs Analysis – pinpoints features and benefits of your goods or services that customers value

12. Industry Forces that Affect Your Business • Barriers to Entry • Threats from Substitute Products • Sources of Supply • Buyers’ Ability to Bargain • Technology

13. Creating a Customer Profile – Questions to Ask • Who are my customers? • What do they generally buy; how do they hear about the products and services they buy? • How often do they buy? • How can my business meet their needs?

14. Ways to Forecast Demand • Use historical analogy products to predict demand for your product • Interview prospective customers and intermediaries • Go into limited production to test the market