Lesson 3 Flashcards by Shyla Carace

Importance of Market Analysis

G A H
-Great help in understanding the customers
-Analyze competitors
-Helps determine unique sales proposition

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Dimensions of MA

Market size
Market segment
Market trends
Market growth rate
Market profitability
Industry cost structure
Distribution channel
Key success factors

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refers to the current and
potential volume of the selected market.

Market size

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Methodologies for market sizing

Bottom-up, top-down

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determine by considering the major variables of your business, such as where you sell your products, the number of potentialcustomers and the historical numbers of competitors’ products sold.

Bottom up

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determine the size of
the entire market, figure
out how much of that
market you control and
then
compute the amount
your business may
earn from that share of
the market

Top-down

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This refers to the rate at which the
market is expected to grow in terms of ____ for a particular product or
service over a period of time.

demand; market growth rate

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The ____ is also the
basic information investors need
before making an investment decision.

market growth rate

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HOW DO WE DETERMINE MARKET GROWTH RATE?

Product diffusion curve, Extrapolating

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_____ the past data
into the future, market growth
rate can be ascertained in an
organization.

Extrapolating

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based on the study of characteristics of adoption rate of similar products or services in the past

Product diffusion curve

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refer to the general direction or
pattern of change in a particular market over time

Market trends

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They are the movements or shifts in demand, supply, and pricing that reflect changes
in consumer behavior, preferences, and needs.

Market trends

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are influenced by various factors
such as demographic shifts, technological
advancements, economic conditions, and
cultural shifts.

Market trends

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process of dividing a larger
market into smaller, more defined
groups of consumers who have similar
needs, wants or characteristics.

Market segment

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There are many ways to segment a
market, including

demographic, geographic, psychographic, and behavioral factors.

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refers to the ability of a company or product to generate profits within a specific market.

Market Profitability

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It is a measure of the
potential financial returns a business can make from operating within a given market segment.

Market Profitability

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It refers to the way in which costs are incurred in a particular industry, including the fixed and variable costs associated with producing and delivering products or services.

Industry Cost Structure

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Manufacturer -> wholesaler -> retailer -> customer

Distribution

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These are the specific factors that are critical to the success of companies operating in a particular industry.

Key factors

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Such key factors might include:

i. Accessibility to essential and unique resources
ii. Competence to reach economies of scale
iii. Accessibility to channels of distribution
iv. Accessibility to the state-of-the-art technology

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PORTER’S FIVE FORCES MODEL

Threat of new entrants
Bargaining power of suppliers
Bargaining power of buyers
Threat of substitutes
Rivalry among existing
competitors

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This force refers to the
potential for new competitors
to enter the market and
disrupt the current
competitive landscape.

Threat of new entrants

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Factors that influence this force include the ease of entry, capital requirements, and barriers to entry such as patents, economies of scale, or brand recognition.

Threat of new entrants

This force refers to the power that suppliers have over the industry and their ability to increase prices or reduce the quality of goods or services.

Bargaining power of suppliers

Factors that influence this force include the number of suppliers, availability of substitutes, and switching costs.

Bargaining power of suppliers

This force refers to the power that buyers have over the industry and their ability to negotiate lower prices or higher quality goods or services.

Bargaining power of buyers

Factors that influence this force include the number of buyers, the size of their orders, and their price sensitivit

Bargaining power of buyers

This force refers to the potential for substitutes to take market share away from the industry's products or services.

Threat of substitutes

Factors that influence this force include the availability of substitutes, their relative price and performance, and the switching costs for customers.

Threat of substitutes

This force refers to the intensity of competition among existing firms in the industry.

Rivalry among existing competitors

Factors that influence this force include the number and size of competitors, industry growth rate, differentiation of products or services, and exit barriers.

Rivalry among existing competitors

5 skills that one must acquire to understand their target market

Segmenting the market Targeting Understanding your target Analyzing the Competition Estimating Potential Market Demand

Segmenting the Market

Geographic Demographic Psychographic Behavioral

marketing concept that describes grouping potential customers into segments or groups with comparable demands and and responses to marketing actions.

Segmenting the market

- evaluate and select target segments. - allows you to focus your attention on one market or group at a time

Targeting

- The goal of market research is to better understand the demands of a market by methodically collecting data on individuals, businesses, or both. The outcomes of market research are then applied to assist business owners in making more informed decisions concerning the company's operations, strategy, and potential customers.

Understanding your target

Ways in Understanding your target

-SURVEYS -OBSERVATION -PROTOTYPING -FOCUS GROUP DISCUSSION -EMPHATIC TOOLS

when trying to understand your target market, do not neglect to look at your competitors.

Analyzing the Competition

Competitor’s Analysis

- What yourcompetitor's marketing is (4PS) - Why the target market is buying or will buy from the competitor (SWOT)

4Ps

Place Product Promotion Price

SWOT

Strengths Weaknesses Opportunities Threats

a marketing skill that has an impact on projecting sales, sales growth, and capital, machine, and manpower requirements

Estimating Potential Market Demand

numerical representation of how well the entrepreneur understands the target market.

6 Steps of a Market Analysis

Research your industry Investigate the competitive landscape Identify market gaps Define your target market Identify barriers to entry Create a sales forecast

Gain a holistic understanding of everything happening in your industry and prepare to navigate it.

Research your industry

Know your customer's unique characteristics and tailor your offers and marketing accordingly

Define your target market

Know who the big players are and how you can differentiate your brand

Investigate the competitive landscape

Market gaps are needs that are currently not being filled by existing brands.

Identify market gaps

Know what stands in your way and address challengers head on.

Identify barriers to entry

Estimate future sales and make confident business decisions

Create a sales forecast.

This refers to certain factors that allow a company to produce products and services cheaper and with a higher quality than its rivaling companies.

COMPETITIVE ADVANTAGE

These factors commonly include pricing, branding, cost structure, quality of services, distribution network,intellectualproperty,and customer service.

COMPETITIVE ADVANTAGE

Competitor Analysis

Identifying Competitors Assessing Competitors Selecting Competitors to Attack & Avoid

To be able to create effective marketing strategies, a company needs constant analysis of their existing and potential competitors that includes theirprices, strategies, promotions, offers, and many more.

Competitor Analysis

Identifying your company’s competitors plays a major role in keeping your company competitive in the market

Identifying Competitors

IDENTIFYING COMPETITORS FROM:

Industry Point of View Market Point of View

Competitors have the same product/service and target market inside the same category or industry.

Industry Point of View

Types of Competitors

Direct Indirect Replacement

Competitors have the target market but differ in products/services that they offer.

Market Point of View

This type of competitor offers the same products/services as your business.

DIRECT COMPETITORS

This type of competitor is inclined with your category but offers different products/services to solve the same problem.

INDIRECT COMPETITORS

This type of competitor offers alternatives products/services from you offer to solve the same problem.

REPLACEMENT COMPETITORS

Ways to Identify Competitors

1. MARKET RESEARCH 2. KEYWORD RESEARCH 3. ANALYZING GOOGLE SEARCH (PRODUCT/SERVICE +LOCATION) 4. MONITORING SOCIAL MEDIA CONVERSATIONS 5. CUSTOMER FEEDBACKS

By ____, a company can identify its strengths and weaknesses relative to its rivals, and develop strategies to improve its competitive position.

assessing competitors

ASSESSING COMPETITORS

Company's objectives Company's strategies Competitor's strength and weaknesses Estimating Competitor's Reactions

Each competitor has a mix of objectives. The company wants to know the relative importance that a competitor places on current profitability, market share growth, cash flow, technological leadership, service leadership, and other goals.

Competitor's Objectives

The company needs to look at all the dimensions that identify strategic groups within the industry.

Competitor's Strategies

Marketers need to carefully assess each competitor’s strengths and weaknesses to answer a critical question: What can our competitors do? As a first step, companies can gather data on each competitor’s goals, strategies, and performance over the past year. Admittedly, this some of this data is hard to obtain.

Competitor's Strengths & Weaknesses

The company needs to look at all the dimensions that identify strategic groups within the industry company wants to know: What will our competitors do?Marketing managers need a deep understanding of a competitor’s mentality if they want to anticipate how that competitor will act or react

Estimating Competitor's Reactions

Selecting Competitors to Attack & Avoid

Strong or weak Good or bad Close or distant Finding uncontested market spaces

Most companies will compete with ____ competitors that resemble them most rather than ___ competitors

Close Distant

Rather than competing head to head with established competitors, many companies seek out unoccupied positions in _______.

uncontested market spaces

make the competition irrelevant

Blue-Ocean Strategy

beat the competition

Red-Ocean Strategy

A ____ refers to aunique advantage that a company has over its competitors,which enables itto outperform them over a long period of time.

sustainable competitive advantage

A company works hard to achieve the lowest production and distribution costs.

Overall Cost Leadership

The Cost Leadership strategy can be implemented in various ways, including:

-EFFICIENT OPERATIONS -ECONOMIES OF SCALE -LOW-COST INPUTS -COST-EFFECTIVE MARKETING -MINIMAL PRODUCT FEATURES

A company concentrates on creating a highly differentiated product line and marketing program so that it comes across as the class leader in the industry.

Differentiation

The Differentiation strategy can be implemented by:

-MARKET RESEARCH INNOVATION AND DEVELOPMENT -ESTABLISHING BRAND REPUTATION

A company focuses its effort on serving a few market segments well rather than going after the whole market.

Focus

FOCUS STRATEGY

COST FOCUS DIFFERENTIATION FOCUS

A company aims to become the lowest-cost producer in a specific market or industry segment.

COST FOCUS

A company aims to differentiate its products or services from competitors in a particular market or industry segment.

Differentiation Focus

A concept that describes a business strategy that tries to achieve both low cost and differentiation at the same time but fails to excel in either of them.

Middle-of-the-roaders

MICHAEL PORTER'S Basic Competitive Strategies

Differentiation Overall cost leadership Focus

TREACY & WIERSEMA'S CompetitiveStrategies

Product leadership Operational excellence Customer intimacy

The company provides superior value by leading its industry in price and convenience.

Operational Excellence

The company provides superior value by offering a continuous stream of leading-edge products or services.

Product Leadership

The company provides superior value by precisely segmenting its markets and tailoring its products or services to exactly match the needs of targeted customers.

Customer intimacy

____ is a marketing strategy that refers to how a marketing team can differentiate a company from its competitors.

Competitive positioning

DIFFERENT COMPETITIVE POSITIONS

MARKET LEADER MARKET CHALLENGER MARKET FOLLOWER MARKET NICHER

firm with the largest market share

MARKET LEADER

Firms fighting to increase market share.

MARKET CHALLENGER

firms that want to hold onto their market share.

MARKET FOLLOWER

are firms that serve small market segments not being pursued or overlooked by other firms.

MARKET NICHERS

Market Leader Strategies

EXPAND TOTAL DEMAND PROTECT THEIR CURRENT MARKET EXPAND MARKET SHARE

EXPAND TOTAL DEMAND BY DEVELOPING:

New users New uses More usage of its products

PROTECT THEIR CURRENT MARKET BY:

Fixing or preventing weaknesses Maintain consistent prices that provide value Keep strong customer relationships Continuous innovation

EXPAND MARKET SHARE BY:

Producing high-quality products Creating good service experiences Building close relationships

Market Challenger Strategies

FULL FRONTAL ATTACK INDIRECT ATTACK

By challenging the market leader and other competitors in an aggressive bid for more market share (market challengers)

FULL FRONTAL ATTACK

By carving out toeholds using tactics that established leaders have trouble responding to or choose to ignore.

INDIRECT ATTACK

Market Follower Strategies

FOLLOW CLOSELY FOLLOW AT A DISTANCE

Market Nicher Strategies

BY SPECIALIZING IN SERVING ONE TYPE OF NICHE SUCH AS CUSTOMER, MARKET, QUALITY-PRICE, SERVICE. MULTIPLE NICHING

In the modern business landscape, companies must balance two crucial elements:

customer and competitor orientations

A __ prioritizes the needs and wants of its customers above all else.

customer-oriented company

___ is primarily focused on beating its rivals,often atthe expense of customer satisfaction

competitor-oriented company

aims to find a balance between customer and competitor orientations.

market-oriented company

A ___ is primarily focused on beating its rivals. Its main goal is to capture as much market share as possible, even if that means sacrificing customer satisfaction.

competitor-centered company

A ___ is primarily focused on meeting the needs and wants of its customers. Its main goal is to create loyal customers who will continue to do business with the company for years to come

customer-centered company

This approach can be effective in the long term, as it can create a strong brand reputation and customer loyalty

customer-centered company

Competitors have the target market but differ in products/services that they offer.

Market Point of View

Lesson 3 Flashcards

(114 cards)