ByDr. Kapil Sharma

Market AnalysisMarket Analysis

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Study 2Site and Financial

Analysis

Study 2Site and Financial

Analysis

Two-Phased ApproachTwo-Phased ApproachTo the ProjectTo the Project

Two-Phased ApproachTwo-Phased ApproachTo the ProjectTo the Project

Study 1Market Demand

Analysis

Study 1Market Demand

Analysis

Does Market Demand Exist?

No

Yes

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Market Analysis – Macro Level

Overall market – size (number of customers, aggregate money spent)

Where is the market on the “S curve” – is it nascent, growing or saturating

Trends in broad categories – demographic, socio-cultural, economic, technological, regulatory

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Market Analysis – Micro Level

Target segment benefits and attractiveness – customers buy benefits, not products or features.

Clearly differentiated solution with value delivery unambiguously stated

Does an entry in a segment facilitate lateral entry in other segments

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Market Analysis

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Market Position

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Market Position

Market Niche – small part of an existing market Market Leader – maintain dominant position in

the market? Market Follower – Follow the lead of the

market leader – pricing, product development, etc.

Market Challenger – Seek to adopt strategies to challenge market leader’s position

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Market Objectives

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Market Objectives

Will involve/determine some or all of the following:– Market Penetration– New Product

Development– Branding– Diversification– Product Portfolio

Marketing Objectives for Pepsi?Title: Western goods sell well in China.

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Market Segments

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Which Segment?

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Which Segment?

Mass Markets – high volume, low margin goods – confectionary, cars, clothing, food stuffs

Multiple Segments – appealing to wider range of groups – e.g. 4x4 vehicles – town, country, gender, lifestyle, social class?

Single Segment – often a specialised product, e.g. machinery, exclusive goods

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Market Structure

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Market Structure

Nature of the market structure determines marketing strategy:– Pricing strategy– Branding?– Product Differentiation?– Market Penetration?– Market Skimming?– Direct Selling?

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Deciding Marketing Strategy

With the knowledge of these factors the next step is decide upon the marketing strategy.

For laying down a clear cut marketing strategy the following aspects should be considered.

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Deciding Marketing Strategy

The channels of distribution to be used keeping in view those used by the competitors and their efficacy and whether any innovative channels can be identified.

When, where and hot to advertise without spending too much and loosing out to the competitors.

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Deciding Marketing Strategy In case of a new product, whether

introduction of the same product under a well established brand name will adversely affect the sales and if yes, how to counter such an event

The price at which the product can be sold, considering the prices of competitors products and the ability of the venture to withstand a price war.

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Conducting Market Research

Market Research with Primary Data

Market Research with Secondary Data

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Market Research with Primary Data

Statement of Objective:- It is very important to clearly

state the output required from the study in precise terms before stating the process of data collection.

Lack of clarity at this stage may lead to collecting the irrelevant data, resulting in waste of time, efforts and money.

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Market Research with Primary Data

Specification of Data Requirement :- This to a great

extent depends upon the objective.

Suppose a company is planning to launch a new brand of toothpaste. If it wants to know in which color the toothpaste should be, then the required data will be on the color which the consumers like their tooth paste to be in.

If on the other hand the company is thinking of launching a tooth paste of a foreign brand, which is purple in color, it need data on whether consumers like a purple colored toothpaste. Color preferences of consumers is not necessary in the later case.

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Market Research with Primary Data

Design of the Sample :- Depends upon the type of product

and consumers.

Suppose a company is planning to launch a new brand of toothpaste. If it wants to know in which color the toothpaste should be, then the required data will be on the color which the consumers like their tooth paste to be in.

If on the other hand the company is thinking of launching a tooth paste of a foreign brand, which is purple in color, it need data on whether consumers like a purple colored toothpaste. Color preferences of consumers is not necessary in the later case.

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Market Research with Primary Data

Mode of Collecting Data :- Can be done using different methods

Observation method, Questionnaire method, Interview method etc. Dependent upon earlier three steps. Time and cost needs to be taken into consideration

Conducting the Survey and obtain Data:- Very important aspect of the entire process. Common difficulty is that many of the constituents do not respond. The problem of non response is generally higher in questionnaire method.

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Market Research with Primary Data

Analysis and Conclusion :- Data collected should be edited to eliminate responses that are wrong or dishonest outright before tabulation.

Tabulation should be done keeping in view the type of data collected and in a manner that facilitates the interpretation of the results of the tabulation.

At this stage it is also necessary to look out for other factors that were ignored, earlier, but show up now to be important. Such factors should be analyzed by collecting data afresh, if necessary , otherwise the whole study becomes incomplete defeating the purpose.

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Market Research with Primary Data

Advantages of Primary Data :- The accuracy of the study is high. Analysis is easier as data specifically required is collected.

Disadvantages of Primary Data :-

Sampling involves sacrificing a part of the accuracy to reduce the cost

When the response required is a question of opinion rather than fact, the reliability tends to be lower

Respondents inability to understand the questions.

In case of confidential or embarrassing information desired the respondents may not reflect the truth.

The appearance and manners of the interviewer and the presence of a third person may also affect the responses.

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Market Research with Secondary Data

Sources of Secondary Data:- Two main sources of secondary data

Internal; past records of the organization, primary information collected earlier for some other purpose may also sometimes come in handy

External; market research organization, trade organizations, government research organizations, etc.

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Market Research with Secondary Data

Advantages of Secondary Data:- It is available easily and saves time.

It may be cheaper than collecting it first hand.

Data collected by professional organization may be more accurate and reliable

Disadvantages of Secondary Data:-- For providing highly user specific information, research organizations charge heavily.

The user can often have no direct check on the quality of the data collection process of the research agency.

The plans of the user to enter into a specific area of the market may not remain confidential.