market feasibility test
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Market Feasibility Study of PALM ISLAND
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NewGate India Hyderabad, Andhra Pradesh- 500038
Website: www.newgate.in
Email: [email protected] Slideshare URL :
http://www.slideshare.net/newgateindia
features of Palm island • Unique
• This makes it a resemblance of richness.
• To be related to palm island brings pride to people as its one of its kind.
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Palm island taps various markets…
• Tourism
• Residential
• Entertainment area
• Resorts, hotels and restaurants
• Cruise, boating and other water sports.
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Safety and security • It is more of a backwater than a sea beach.
• It is surrounded by high level boundaries which protects it from high tides.
Quantitative Tools
for Market Feasibility Test 4
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Market Feasibility Analysis of Palm Island Alliance University
SAT 17 APR
Quantitative Tools
1. Forecasting
2. Percent Median Market
3. Control Chart
4. Predictive Gravity Modeling
5. Assignment Model
6. Customer Life Time Value ( CLV )
7. Sensitivity Analysis
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Market Feasibility Analysis of Palm Island Alliance University
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Factors For Testing
1. Tourism Growth 2. Entertainment Clubs 3. Real estate Mapping 4. Footfalls in Malls 5. Resorts possible areas
Forecasting of Tourism Growth
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Market Feasibility Analysis of Palm Island Alliance University
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Definition : The process of analyzing current and historical data to determine future trends.
Step:1 Forecasting
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Market Feasibility Analysis of Palm Island Alliance University
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Definition : The process of analyzing current and historical data to determine future trends.
Year 2005 2006 2007 2008 2009 2010 No of Tourist 18,765 19,867 21,654 22,123 23,778 25,169
1. Regression Analysis 2. Moving Average 3. Extrapolation 4. Trend Analysis
y = 1263.5x - 3E+06 R² = 0.9877
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5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011
Axi
s Ti
tle
Axis Title
No of Tourist
Standard Deviation : 0.12 %
dy/dx = Growth
Step:1 Forecasting
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Market Feasibility Analysis of Palm Island Alliance University
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Definition : The process of analyzing current and historical data to determine future trends.
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5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
No of Tourist
Year 2005 2006 2007 2008 2009 2010 2011 2012
No of Tourist 18,765 19,867 21,654 22,123 23,778 25,169 26,741 27,891
Standard Deviation : 0.12 %
2011 Forecast : 26,741
Step:1 Forecasting
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Market Feasibility Analysis of Palm Island Alliance University
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Definition : The process of analyzing current and historical data to determine future trends.
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5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
No of Tourist
Year 2005 2006 2007 2008 2009 2010 2011 2012
No of Tourist 18,765 19,867 21,654 22,123 23,778 25,169 26,741 27,891 The analysis gives an idea about expected figure in Dubai but it does
not show how will it impact specifically palm Island
Step:2 Percent Median Market
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Market Feasibility Analysis of Palm Island Alliance University
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Definition : It defines the percentage distribution across various factor Helps to know
1. Market penetration 2. Potentiality of a particular segment
Standard Deviation : 0.12 %
2011 Forecast : 26,741
Step:2 Percent Median Market
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Market Feasibility Analysis of Palm Island Alliance University
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Definition : It defines the percentage distribution across various factor Helps to know
1. Market penetration 2. Potentiality of a particular segment
Age Group < 25 25-30 30-40 40-50 50> Total
Will Visit Palm Island
12 24 49 21 9 115
Will Visit Other Place
157 231 369 189 112 1058
Will visit for both Palm Island & Other places
4 9 19 7 3 42
Total 173 264 437 217 124 1215
Tourism
Standard Deviation : 0.12 %
2011 Forecast : 26,741
Step:2 Percent Median Market
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Market Feasibility Analysis of Palm Island Alliance University
SAT 17 APR
Definition : It defines the percentage distribution across various factor Helps to know
1. Market penetration 2. Potentiality of a particular segment
Age Group < 25 25-30 30-40 40-50 50> Total
Will Visit Palm Island
12 24 49 21 9 115
Will Visit Other Place
157 231 369 189 112 1058
Will visit for both Palm Island & Other places
4 9 19 7 3 42
Total 173 264 437 217 124 1215
Tourism The Percent Median table can be formed based on
1. Customer Survey 2. Customer Feedback 3. Expert Opinion 4. Historical Trends
Standard Deviation : 0.12 %
2011 Forecast : 26,741
Step:2 Percent Median Market
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Market Feasibility Analysis of Palm Island Alliance University
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Age Group < 25 25-30 30-40 40-50 50> Total
Will Visit Palm Island
12 24 49 21 9 115
Will Visit Other Place
157 231 369 189 112 1058
Will visit for both Palm Island & Other places
4 9 19 7 3 42
Total 173 264 437 217 124 1215
Tourism
Standard Deviation : 0.12 %
2011 Forecast : 26,741
Market Penetration = (115 + 42 ) / 1215 = 12.92 %
Marketing Penetration : 12.92%
Step:2 Percent Median Market
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Market Feasibility Analysis of Palm Island Alliance University
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Age Group < 25 25-30 30-40 40-50 50> Total
Will Visit Palm Island
12 24 49 21 9 115
Will Visit Other Place
157 231 369 189 112 1058
Will visit for both Palm Island & Other places
4 9 19 7 3 42
Total 173 264 437 217 124 1215
Tourism
Standard Deviation : 0.12 %
2011 Forecast : 26,741
Market Penetration = (115 + 42 ) / 1215 = 12.92 %
Marketing Penetration : 12.92%
Age Group % share Preference
< 25 14.23868313 5
25-30 21.72839506 2
30-40 35.96707819 1
40-50 17.8600823 3
50> 10.20576132 4
TOTAL 100
Potentiality of customer segments
Step:2 Percent Median Market
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Market Feasibility Analysis of Palm Island Alliance University
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Age Group < 25 25-30 30-40 40-50 50> Total
Will Visit Palm Island
12 24 49 21 9 115
Will Visit Other Place
157 231 369 189 112 1058
Will visit for both Palm Island & Other places
4 9 19 7 3 42
Total 173 264 437 217 124 1215
Tourism
Standard Deviation : 0.12 %
2011 Forecast : 26,741
Market Penetration = (115 + 42 ) / 1215 = 12.92 %
Marketing Penetration : 12.92%
Age Group % share Preference
< 25 14.23868313 5
25-30 21.72839506 2
30-40 35.96707819 1
40-50 17.8600823 3
50> 10.20576132 4
TOTAL 100
Potentiality of customer segments
It gives idea about market penetration & customer segment, but still gives no idea
about the feasibility of project
Step:3 Control Chart
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Market Feasibility Analysis of Palm Island Alliance University
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Standard Deviation : 0.12 %
2011 Forecast : 26,741
Marketing Penetration : 12.92%
Potentiality of customer segments Control charts, also known as process-behavior charts, in statistical process control are tools used to determine whether or not a manufacturing or business process is in a state of statistical control.
It has : USL : Upper Specification Limit LSL : Lower Specification Limit
Step:3 Control Chart
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Market Feasibility Analysis of Palm Island Alliance University
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Standard Deviation : 0.12 %
2011 Forecast : 26,741
Marketing Penetration : 12.92%
Potentiality of customer segments Control charts, also known as process-behavior charts, in statistical process control are tools used to determine whether or not a manufacturing or business process is in a state of statistical control.
No of tourist
• Over capacity • Risks
• Under Utilization • No ROI
LSL USL
Expected Tourism in 2011 = ( 26,741 X 0.1292 ) = 3208.92
3000 3500
Control Chart
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Market Feasibility Analysis of Palm Island Alliance University
SAT 17 APR
Standard Deviation : 0.12 %
2011 Forecast : 26,741
Marketing Penetration : 12.92%
Potentiality of customer segments Control charts, also known as process-behavior charts, in statistical process control are tools used to determine whether or not a manufacturing or business process is in a state of statistical control.
No of tourist
• Over capacity • Risks
• Under Utilization • No ROI
LSL USL
Expected Tourism in 2011 = ( 26,741 X 0.1292 ) = 3208.92
3000 3500 3208
Feasible
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LSL USL LSL USL
LSL USL
Feasible No Risk
Not Feasible
Feasible but Risky
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20 Tourism at Palm Island is Feasible
But feasibility may differ on territory level
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21 Tourism at Palm Island is Feasible
But feasibility may differ on territory level
Weak territories
Strong territories
Step:4 Predictive Gravity Modeling
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Market Feasibility Analysis of Palm Island Alliance University
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Potentiality of customer segments Forecast the total potential sales available from each neighborhood in the trade area
The model should be designed to mesh with the data that will be used when the model is implemented. In GIS analysis and most other large data analyses, the characteristics of individuals are summarized into the neighborhood's demographic or psychographic profile
Input variables V1 V2 V3
F ( X )
Output ( Graphic user Interface )
Step:4 Predictive Gravity Modeling
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Market Feasibility Analysis of Palm Island Alliance University
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Potentiality of customer segments
OUTPUT
Market Penetration
Step:4 Predictive Gravity Modeling
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Market Feasibility Analysis of Palm Island Alliance University
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Potentiality of customer segments
OUTPUT
Case: Opening a shopping Mall
Criteria : In a area where market penetration is between above 50%
Market Penetration
Feasible
Not Feasible
Step:4 Predictive Gravity Modeling
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Market Feasibility Analysis of Palm Island Alliance University
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Potentiality of customer segments
OUTPUT
Case: Opening a shopping Mall
Criteria : In a area where market penetration is between above 50%
Market Penetration
Feasible
Not Feasible
It gives an idea about feasibility but how to decide which territory is best feasible ?
Step:5 Assignment Model
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Market Feasibility Analysis of Palm Island Alliance University
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Potentiality of customer segments
To find most best feasible solution
Area 1 Area 2 Area 3 Area 4 Area 5
Shopping Mall 1 5 2 3 4
Step:5 Assignment Model
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Market Feasibility Analysis of Palm Island Alliance University
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Potentiality of customer segments
To find most best feasible solution
Area 1 Area 2 Area 3 Area 4 Area 5
Shopping Mall 1 5 2 3 4
Restaurant 2 4 3 1 5
Resort 5 2 1 3 4
Club 4 1 2 5 3 residential Area 5 2 3 4 1
Applying Assignment Model
BEST
Shopping Mall Area 1
Restaurant Area 4
Resort Area 3
Club Area 2
Residential Area Area 5
BEST FEASIBLE
Step:5 Assignment Model
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Market Feasibility Analysis of Palm Island Alliance University
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Potentiality of customer segments
To find most best feasible solution
Area 1 Area 2 Area 3 Area 4 Area 5
Shopping Mall 1 5 2 3 4
Restaurant 2 4 3 1 5
Resort 5 2 1 3 4
Club 4 1 2 5 3 residential Area 5 2 3 4 1
Applying Assignment Model
BEST
Shopping Mall Area 1
Restaurant Area 4
Resort Area 3
Club Area 2
Residential Area Area 5
BEST FEASIBLE
How much value would customers add to you?
STEP : 6 Customer Lifetime Value ( CLV )
In marketing, customer lifetime value (CLV), lifetime customer value (LCV), or lifetime value (LTV) is the net present value of the cash flows attributed to the relationship with a customer
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CLV = 𝑃𝐶𝑘 𝑛𝑘=0
1
1+𝑑
k
CLV: Customer Lifetime Value PC : Profit Contribution d : Discount Rate n : Number of years k : Time unit
STEP : 6 Customer Lifetime Value ( CLV )
In marketing, customer lifetime value (CLV), lifetime customer value (LCV), or lifetime value (LTV) is the net present value of the cash flows attributed to the relationship with a customer
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CLV = 𝑃𝐶𝑘 𝑛𝑘=0
1
1+𝑑
k
CLV: Customer Lifetime Value PC : Profit Contribution d : Discount Rate n : Number of years k : Time unit
Risks ?
STEP : 7 Sensitivity Analysis
Sensitivity analysis (SA) is the study of how the variation (uncertainty) in the output of a mathematical model can be apportioned, qualitatively or quantitatively, to different sources of variation in the input of the model.
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I ( X ) O ( X, Y) I ( Y )
If f ( x ) is altered, than to what degree O ( X,Y ) would change.
STEP : 7 Sensitivity Analysis
Sensitivity analysis (SA) is the study of how the variation (uncertainty) in the output of a mathematical model can be apportioned, qualitatively or quantitatively, to different sources of variation in the input of the model.
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I ( X ) O ( X, Y) I ( Y )
If f ( x ) is altered, than to what degree O ( X,Y ) would change.
Based on sensitivity analysis we have to decide contingency level
Qualitative Tools
for Market Feasibility Test 33
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Market Feasibility Analysis of Palm Island Alliance University
SAT 17 APR
Quantitative Tools
1. Concept Testing
2. Delphi Techniques
3. Focus Group Advice
4. Nominal technique
5. Alpha Testing
6. Beta Testing
7. Test Marketing
8. Market Simulation
9. Competitive Advantage Analysis
10. Sustainability Test
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Market Feasibility Analysis of Palm Island Alliance University
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Concept Testing
• People’s reaction to a basic idea of the product
• Usually done before a product is marketed.
• Ensures the selection of the most favorable concept
• Reduces research, development and marketing cost
• Lays a foundation for Benchmarking in future
• Forecasts and analyses the demand and ensures the right time of launching
Focus Groups?
• It's dangerous to take "customers" for granted
• To collect qualitative data
• To determine feelings, perceptions and manner of thinking of participants regarding products, services, programs or opportunities
• To promote self-disclosure among participants
Test Marketing
To test a new product or a new marketing plan under realistic market conditions to measure sales or profit potential.
Done based on the following
1. Population size
2. Demographic composition
3. Lifestyle considerations
4. Competitive situation
5. Media
Test Marketing
WHY
1. To identify and correct weakness in the plan
2. To estimate the outcomes
OUTPUT
1. Reduced cost
2. Increased secrecy from competitors
Alpha Testing
• Acceptance testing
• Done in front of client or customer for their acceptance.
• The Product is developed according to the customers requirement and Specification.
• Generally termed as internal testing
Beta Testing
• Done after Alpha testing
• Termed as External user acceptance testing
• Open to limited people
• Based on their feed backs the flaws are corrected
Competitive Advantage
“A project’s profit potential is largely determined by the intensity of competitive rivalry within that Project”
Competitive Advantage
• Variety of health spas, fitness centres and residents' clubs
• Outstanding facilities at 30 luxury five-star or boutique hotels
• Wide selection of restaurants offering the finest cuisine from all over the world
• Tax-free, designer brand shopping on the Golden Mile and in Palm Mall
• Safe, gated communities and top security in all apartment residences
• Miles of beautiful, golden beaches with spectacular ocean views
• Incredible range of attractions and events, as well as theatres, cinemas and nightclubs
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Questions Please ????