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WELCOME TO THE
ENTREPRENEURIAL PROGRAM
Today – Market estimation
Agenda
QUICK GROUP PRESENTATIONSWHAT ARE YOU WORKING ON
HOW WILL YOU WORK ON YOUR MARKET ESTIMATION
MARKET RESEARCHDIFFERENT TYPES OF MARKET RESEARCH
CUSTOMER SEGMENTS, TARGETING & POSITIONINGMARKET ESTIMATION
WORKING ON THE PROJECTSPROJECT STRUCTURE GROUP SUPERVISION
GROUP PRESENTATIONS
MARKET RESEARCH
Why do market research?
Definition
Marketing Research is:
”The process of designing, gathering, analyzing and reporting of information that may be used
to solve a specific marketing problem” (Burns & Bush, 2000)
Before doing market research, one should have:
• A clear objective as to what the organization is aiming to achieve – both through marketing and corporate objectives
• A reasonable understanding of the targeted segments, and thus an ability to position the product or service
HOW TO DO MARKET
RESEARCH ?
MARKET RESEARCH TOOLS
Primary Research Methods
Observations (going native + antropology)
Focus GroupsIn-Depth Interviews (In person, mobile, Skype or by using
video conference)
Questionaries (personal, mobile, online, e-mail)
MARKET RESEARCH TOOLS
Secondary Research Methods(Desk Research)
Intern information (sale, payment, inventory)
External information (Published or Commercial market research reports, Information about competitors, Government reports, Industry specific homepages
Market Research1. Ask the customers what they want
2. Ask the customers what they dream of
3. Talk to ”non-customers”
4. Talk to competitors
5. Understand the competitors’ business model
6. Know the positioning map of the industry
7. Talk to distributors
8.TEST!!!
WHAT CAN WE LEARN FROM TOMATO SAUCE ?
STP)Segmentation
– Determinations of variables that will influence which customer segment you focus on
Targeting– How many segments should you target?– Which segment should you target?
Positioning– Which position within a segment do you want to obtain?
Definition
Segmentation is the ability to:
”…divide the markets into groups, or clusters, of customers based upon realistic and meaningful criteria so as to offer clear, targeted benefits to every customer”
(Wright, 2004)
SEGMENTING BY MARKET TYPES
• Mass Market = Undifferentiated• Segments = Homogeneous groups• Niche = Specialized customer segments• Multiple segments = You serve multiple segments at
once – examples could be Google or even Golf courses
• Customized or individual = Dell• Local customer groups = You tailor the offering to
meet local needs
Targeting
• Targeting = Which customer segment should we aim at?
• Can we spot any gaps in the market?
• Look for fit between strategy and resources
Positioning
• The percieved position of the brand!
• Does it differentiate from competitors
• Is there enough customers in that place?
• Multiple positioning strategy = Procter & Gamble
MINI CASE - 15 min
List of car BRANDS
FORDFERRARIBMWVOLVOMERCEDESKIATOYOTA
MINISEATSUZUKIRENAULT
Positioning map for carsNiche Market
Sporty
Mass Market
Safety
How to Estimate the
market potential?
Estimating Market Potential Check-List
Estimating the market or market potential for a new business or business expansion is critical in determining the economic feasibility of a venture. Estimating the market potential will determine if the market is large enough to support your businesses.
• What type of customer will buy the product or service?• Where are these customers located?• How many potential customers (N) are there?• How often do they consume or use it?• What is the Competition?• What are people paying?• What is the Potential for the Market to Develop?• What is my share of the Market
Corn maze in Wake County, Georgia
Estimating Market Potential:
Key Steps in Estimating Market Potential:
1. Define your target market and market segments.2. Define the geographic boundaries of your market.3. Derive average expenditures for the category.4. Determine the average household income for the
area and state.5. Estimate market share
Estimating Market Potential:
MP = market potentialN = number of possible buyersP = average selling priceQ = average annual consumption
FORMULA: MP = N x P x Q
Estimating Market Potential:
EXAMPLE : Agritourism Market Potential AnalysisSituation - estimate the market potential for a new corn maze in Wake County, Georgia. Thefacility will have a maze and hayride. Other activities include pig races, hay bale play grounds,and a petting zoo. The average price for corn mazes in the area is $8.00 per person. They plan totarget children 8 years old and under. There are two other competing corn maze operations.These operations have been in business for over five years and have established a clientele.
Estimating Market Potential: MP = market potentialN = number of possible buyersP = average selling priceQ = average annual consumption
Number of potential customers (target market) =101,600 people under 9 years of age
P - average selling price = $8.00 per person Q - consumption - assumes an average of 1.5 visits per year per child= 1.5
MP= 101,600 * $8.00 * 1.5 = $1,219,200.00
Estimating Market Potential:
EXAMPLE : Agritourism Market Potential Analysis
Adjustment: It is unrealistic to assume that the operation will capture 100% of the market giventhey are new and there are established operations in the area. Need to estimate our market shareof the corn maze business in the county. Market share = Market potential * percent of the market captured.
Assume each corn maze obtains 33% of the market
Market Share = $1,219,200.00 * 33% = $402,336
Use 20% and 10% to see how sensitive the market share number is and if these figures willsupport your business. Market Share = $1,219,200.00 * 20% = $243,840Market Share = $1,219,200.00 * 10% = $121,92
How to dertermine THE Price LEVEL ?
HOW TO - Calculating The Price:1) Cost-plus pricing. Used mainly by manufacturers, assures that all costs (fixed and variable)
are covered and includes a desired level of profit.
2) Demand pricing. Used by companies that sell their product through a variety of sources atdiffering prices based on demand.
3) Competitive pricing. Price according to your competitors. Used in competitive markets withlittle product differentiation.
4) Mark-up pricing. Adds a level of profit to the cost of the product being retailed. Also goodfor products that are co-packed.
Evaluating Price Competitiveness:Investigate your competition. Are your prices in alignment with theirs? What is thevalue of your product relative to theirs? Do not be a price taker or implement a “me, too”pricing strategy if your product can be differentiated and offers a higher value thancompeting products. If your price is too high to compete directly in the market, look for aniche market that desires your product’s attributes and charge accordingly.
How do I KNOW IF MY PRODUCT IS
DIFFERENTIATED ?
3 criteria needs to be fulfilled
1. Does my value proposition differ from what is
currently being offered to the market?
2. Is the segment large enough for my value
proposition?
3. Is it hard for competitors to imitate, copy or
replace my value proposition?
1. OK quality – BETTER in price and size
2. OK price – BETTER in design
3. OK service – BETTER in price
4. Ok speed – BETTER in price and size
EKSTRA
Advertising MediaPrint MediaBroadcasting MediaViral Media
Newspapers: National & Local Newspapers
Magazines: Consumer- & Professional Magazines
TV & Radio
2 EXAMPLES on virale videos
Corporate Blogs
Personal Blogs
TOP TIP on corporate bloGGING
“…businesses with corporate blogs receive 55 percent more traffic than
small businesses that don’t blog”
Source: http://mashable.com/2010/07/20/corporate-blogging-tips/
Billboard
Billboard
Billboard
Billboard
Billboard Battle
Billboard Battle
Ambient Media
Guerrilla
FLASH MOB VIDEO
Mini Task
Which channels are you going to use?
– Find 2 potential channels for your company
– Describe why you have chosen these channels?
– How would you use them?
– What are you going to use it for?
Thanks for today