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CATEGORY, COMPETITOR &
CUSTOMER ANALYSIS
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1. Category Attractiveness
Analysis
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Deciding Factors1. Market Size Estimation
Industry Potential
Market Potential Company Potential
2. Aggregate Market factors
3. Category Factors
4. Environmental Factors
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1.Market Size Estimation
Unrealized
Potential
Company
Sales
Forecast
Industry
Sales
Forecast
Market Potential
Estimate
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0
100
200
300400
500
600
700
800
900
Sales (in 1000s
of units)
2003 2004 2005 2006 2007 2008 2009 2010
Market
Potential
Sales Forecast
Company XYZ
Sales Forecast
Market Size Estimation
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2.Aggregate Market Factors Industry size, growth, and composition
Typical marketing practices
Industry changes that are anticipated -consolidation trends, mergers, takeovers
Industry strengths and weaknesses
Strategic alliances among competitors
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2.Aggregate Market Factors Market Sizerefers to the BCG matrix
Market Growth - refers to the BCG matrix
Stage in PLC
Sales Cyclicityproducts tied closely to thebusiness cycle- financial services, agriculture, realestate, automobiles etc.
Seasonalityconsumption skewed in certain time ofthe yearfestivals, summers, wedding season etc
Profits
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3.Category Factors Threat of new entrants
Bargaining power of buyers
Bargaining power of suppliers
Current category rivalry
Pressure from substitutes
Category Capacity
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Threat of new entrants Economies of scale
Product differentiation
Capital Requirements
Switching costs
Distribution channels
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4.Environmental Factors Political
Economic
Social
Technological
Regulatory/Legal
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Category Rivalry
Many & Balanced competitors- fast-food,
automobiles, Personal computers
Slow Growthmature markets High Fixed costs- automobiles, chemicals,
telecommunications- high exit barriershigh
competition Lack of product differentiationindustrial
marketsintense competition
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2.Competitor
Attractiveness Analysis
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DEFINING & ANALYZING COMPETITORS
1.Define Product-Market Boundaries and Structures
2.Identify and Describe End-Users
3.Analyze Industry & Value Added Chain
4.Evaluate Key Competitors
5.Forecast Market Size & Growth Trends
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ProductMarket Boundaries &
Structure Determining Product-Market Structure
1. Start with the generic need satisfied by theproduct category of interest to management
2. Identify the product categories (types) that
can satisfy the generic need3. Form the specific productmarkets within
the generic productmarket
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Matching Needs with Product Benefits
A productmarket matches people with
needs to the product benefits that satisfy those
needs
A product market is the set of products judged
to be substitutes within those usage situations
in which similar patterns of benefits are
sought by groups of customers.
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SUPER
MARKETS
MICROWAVE
OVENS
CONVENIENCE
STORES
TRADITIONAL
RESTAURANTS
Illustrative Fast-Food
Product-Market Structure
FAST-FOOD
MARKET
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Illustrative ProductMarket Structure
Generic ProductClass
Product Type
Variant A
RegularVariant B
Brands
Food and beverages
for breakfast meal
Cereals
Ready to eat
NaturalPre-sweetened
Life
Nutritional
Special KProduct 19
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3. Analyze Industry & Value Added
Chain Extent of Market ComplexityThree
characteristics of markets:
1. Functions or Uses of the product
2. Enabling technology of the product
3. Customer segments in the product-market
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Analyzing Competition1. Define the Competitive
Arena for the Generic,Specific, and Variant
Product Markets
2. Identify &Describe Key
Competitors
4. Identify &Evaluate
Potential
Competitors
3. Evaluate KeyCompetitors
PRODUCTMARKET
STRUCTURE
&
MARKET
SEGMENTS
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Extent of Market Coverage
Customer
Satisfaction
Current
Capabilities
Past
Performance
CompetitorEvaluation
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4. Analyze Key Competitor
Business scope and objectives
Management experience, capabilities, andweaknesses
Market position and trends
Market target(s) and customer base
Marketing program positioning strategy
Financial, technical, and operating capabilities Key competitive advantages - access to resources,
patents etc.
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Competitor Analysis System
Analysis of Primary & Secondary data
Comparing Market strategies of competition -
Key questions - Who are they
What are their competing product features
Whatis their current strategy
Differential competitor advantage analysis-who has the competitive product advantage
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Comparing Market strategies
Value chains
Marketing Mix
Technology Strategy
Technology selection/specialization
R&D investments
Level of competence
Competitive timing- initiates or responds
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Product Features!!
Identify parallel needscoffee in an
environment, McDonalds in Beijing
Identify Purchase Patternsseasonality How customers use the productPepsi in
PET bottles
Identify customer perception of riskCitibank credit cards for students, internet
shopping with cash on delivery
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Competitors Will
How critical/crucial is this product to the
firm?
How visible is the commitment to the market? How aggressive are the managers?
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3.Customer Analysis
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Identifying andDescribing Buyers
HowBuyersMakeChoices
BuildingCustomerProfiles
EnvironmentalInfluences
DESCRIBING& ANALYZING
END-USERS
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Identifying and Describing End-Users
Buyer characteristics in consumer markets: Family size,
Age,
Income,
Geographical location,
Gender
Occupation
Buyer factors in business markets: Type of industry
Type of products
Company size
Location
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How Buyers Make Choices
Buying Decision Process
1. Problem recognition
2. Information search
3. Alternative evaluation
4. Purchase decision
5. Post-purchase behavior
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Environmental Influences
External factors influencing buyers needs
and wants:
Government, social change, economicshifts, technology etc.
These factors are often non-controllable
but can have a major impact on purchasingdecisions
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Building Customer Profiles
Start with generic productmarket
Move next to product- type and variant
profiles >> increasinglymore
specific
Customer profiles guide decision makingsegmenting, targeting, positioning etc.
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Current & Potential Customers
Who buys & uses the product- Initiator
Influencer
Decider Purchaser
User
What customers buy &how they use it
Benefits Purchase pattern
Product Assortment
Use
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Current & Potential Customers
Where Customers buy - channels
When Customers buyusage patterns
How Customers choose Consideration set
Steps in buyer behavior - attributes, perceptions
Why they prefer a productcustomer lifetime value
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Customer Value of a Brand
Importance of Usage situations
Effectiveness of product category in the
situation Relative effectiveness of the brand in the
situation
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Sources ofCustomer Value
Economic
Functional
Psychological
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Current & Potential Customers
How they respond to marketing programs?
Will they but it againSatisfaction
Satisfaction depends on- Expectations of performance/quality
Perceived performance/quality
Gap betweenexpectations & performance