market analysis business organization and management chapter 6
TRANSCRIPT
Market AnalysisMarket Analysis
Business Organization and Business Organization and ManagementManagement
Chapter 6Chapter 6
Defining Areas of AnalysisDefining Areas of Analysis
• Market Analysis – Identify your target market and determine
customers spending habits– Analyze the industry
Target Market and CustomerTarget Market and Customer
• A market is a group of people or companies who have a demand for a product or service and are willing and able to buy it.
• Target customers are the particular groups of customers you want to buy your products/services.
Market SegmentationMarket Segmentation• The process of grouping a market into
smaller subgroups defined by specific characteristics– Geographic area– Demographics– Psychographics
Conducting Market ResearchConducting Market Research
• Occurs after you identify your target market.
• Market research is the collection and analysis of information aimed at understanding the behavior of consumers in a certain market.
Conducting Market ResearchConducting Market Research1. Identify the focus of the research2. Select the type of market research
• Choose a research approach• Exploratory Research is used when you know very
little about a subject. • Focus group- a group of people whose opinions are studied
to determine the opinions that can be expected from a larger population
• Descriptive research determines the status of something. Information is collected through questionnaires, surveys, observations
• Historical research studying the past. Help predict future potential.
Conducting Market ResearchConducting Market Research 3. Start the Research Process
Secondary Resources• Internet• US Census Bureau• Chamber of Commerce• Government and community organizations Primary Data– Information you obtain for the first time and
use specific to your study.• Observations, interviews, surveys
Researching the Target CustomerResearching the Target Customer
• Customer Profile is a complete picture of a venture’s prospective customers– Who are my customers?– What do they generally buy, and how do they
hear about the products and services they buy?
– How often do they buy?– How can my business meet their needs
Researching The Target CustomerResearching The Target Customer
• Forecasting demand– use historical analogy products
• Compact discs from cassettes and records
– Interview prospective customers and intermediaries
– Limited production to test the market• Kiosk
Industry Industry • Four factors useful in understanding the nature
of an industry– Carrying Capacity – ability to support growth and
expansion.– Uncertainty – degree of stability or instability in an
industry• Fast changing = high degree of uncertainty = more risk =
typically high rewards
– Complexity- # and diversity of contacts with which you must deal.
• Suppliers, customers and competitors
– Stage of Life Cycle – Birth, growth, maturity, decline
Researching the IndustryResearching the Industry
1. Trends and Patterns of Change
Early 19501939 Late 1960’s
2000’s 1990’s
1980’s
2. Barriers to Entry are conditions that make it difficult for a firm to enter into a market.
• Threats from substitute products• Sources of supply
– You must have access to affordable sources of inventory, raw materials, and goods. Consider where supplier is located, trade discounts and alternate sources.
• Economies of Scale– Wal-Mart can purchase their inventories at large
discount prices.
• Brand Loyalty• Technology
Researching the IndustryResearching the Industry3. Industry Demographics
– # of companies, annual revenues and average size of the companies by number of employees
4. The competition– Market share is a portion of the total sales
generated by all competing companies in a given market.
– Competitive advantage is a feature that makes a product more desirable than its competitors products.