chapter three market potential, market demand, and market share
TRANSCRIPT
Chapter Three
Market Potential, Market Demand, and
Market Share
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 3-2
Market Potential, Market Demand, and Market Share
• Market definition
• Market potential
• Market development index
• Managing market growth
• Product-market vs. product life cycle
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 3-3
Benefits of a Broad Market Definition
• Reveals new opportunities in light of a broader set of customer needs
• Enables management to recognize potential substitutes and competitive threats
• Provides management with a thorough understanding of fundamental customer needs
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Estimating Market Potential
Market Potential = 4 billion potential x 35% buying ceiling = 1.4 billion users
Figure 3-5 Estimating Market Potential — Personal Computer
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Market Development Index
• MDI = Current Market Demand
Market Potential
• Low MDI– Untapped market potential
X 100%
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Factors Limiting Full Market Development
Figure 3-7 Factors Limiting Full Market Development
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Market Potential and Market Growth
• Forces affecting rate of market growth– Market potential– Market penetration– Rate of entry
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Managing Market Growth
• Major Customer Groups:– Innovators– Early adopters– Early majority– Late majority– Laggards
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Managing Market Growth
Figure 3-8 Customer Entry and Market Development
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Accelerating Market Growth
Figure 3-10 Customer and Product Forces Driving Market Growth
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Life-Cycle Demand, Margins, and Marketing ExpensesFigure 3-16 Life-Cycle Demand, Margins, and Marketing Expenses
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Market Share Metrics
Figure 3-18 Market Share Metrics and Share Development Path
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Market Share Metrics
• Market Share Index (MSI) = Product X Product X Price X Product X Service Awareness Preference Acceptability Availability Experience
• Share Development Index (SDI) = Market Share Index Share Index Potential
X 100
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Managing Growth Potential
Figure 3-20 Managing a Business’s Growth Potential
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Review
• Market definition
• Market potential
• Market development index
• Managing market growth
• Product-market vs. product life cycle
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 3-16
• Figure 2-8 Sante Fe Sportswear
• Profits and Marketing Profitability
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Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice HallPublishing as Prentice Hall