Professional Documents
Culture Documents
Bargaining Power
Reasons for market
development
Strategy in market
development
Tools and outcomes
Participation in
commodities market
development
Bargaining power and
market stabilization
Market information
define
Market development involves creating or
expanding a market for new or existing products
and/or increasing the value of these products
few consumers today are aware of the prickly
pear, however, but farmers who grow this cactus
plant
Emerging
Markets/
New Products
Beliefs
Preference
Temporary sales
increases
Mature markets
/established
products
Marketing Strategy
ASSESS AND RE-EVALUATE
MARKETING
OBJECTIVES
What we want to
accomplish
STRATEGY
How to best use
available resources
to accomplish objectives
under circumstances.
Make tough choices!
TOOLS
Use resources such
as distribution,
advertising, sales
promotion,
demonstrations
ASSESS AND RE-EVALUATE
TACTICS
AND
ADAPTATION
Implementing strategy
as things change.
More tough choices!
OUTCOME
CONSUMER/
MARKET
RESPONSE
Consumers or
intermediaries
respond
TRIAL
AWARENESS
INCREASED
SALES OF
PRODUCT
BUYING
CONVENIENCE
GET PRODUCT
USED FOR
NEW PURPOSES
JOINT
VENTURES/
COBRANDING
DEVELOP
PREFERENCE
RELATIVE TO OTHER
PRODUCTS OR BRANDS
Big picture
.
onlydetails
not important!
ADVERTISING
DISTRIBUTION
ENHANCEMENT
GET CURRENT
USERS TO USE
MORE
SALES
PROMOTION
Strategy Issues
Deciding on objectives
Realism
Suitability for
Company strengths
Competitor positions
Market structure and change
Consistency of objectives
Some Tools
Advertising
Awareness
Trial
Preference
Reminder
New uses
Distribution
Availability in
retail stores
Quality of
placement within
retail stores
Price/sales promotion
Coupons
Sales
Value
Premium
Joint ventures/cobranding
Demonstrations
Product investment
Quality
Differentiation
Packaging
Usability convenience
Setting strategy.
PROMOTION
ADOPTION BY
LIMITED GROUP
WORD OF MOUTH
TRIAL
INCREASING
ADOPTION/
ADAPTATION
OBSERVATION
MEDIA
COVERAGE
AWARENESS
TRIAL
SALES
Volumes
Prices
REPEAT
PURCHASES
PREFERENCE
REDUCED
PRICE
SENSITIVITY
USE BY
MORE
PEOPLE
USED
MORE
FREQUENTLY
USED IN
MORE
SITUATIONS
Definitions
Innovation:
An idea, practice, or
product perceived to be new by the
relevant individual or group.
Diffusion process:
The manner in
which innovations spread through
the market.
Types of Innovations
Fashionstastes go
back and forth over
timee.g., food fat
content
Fadsproduct is in
for a short time and
then fades (e.g., ostrich
meat)
Trendsconsumption
of a food product either
increases or decreases
consistently over time
N u m b e r o f n e w a d o p to rs
Adoption of Innovati
40
30
20
10
0
Early
Innovators
-2.50
-1.50
adoptors
2.5%
(13.5%)
Early
-0.50
majority
34%
Late
majority
0.50
34%
Laggards
1.50
2.50
(13.5%)
P e r c e n t d if f u s io n
0.8
100% adoption
or saturation
point
0.6
0.4
0.2
0
0
10
15
Time
20
25
Pioneering Advantage
Consumer expectations are usually shaped
by the first encountered brand
Satisfying and awareness by consumers
Order of entry vs. pioneering advantage
Positioning of existing pioneer vs. strategy of
first entry
Bargaining Power
Impact
Price
Conditions
Returns
Time of payment
Interest or finance
charges
Quality or other
adjustments
Transportation or other
services
Sources
Size, number, and
concentration of firms
Supply control
Unequal information
Diversification (?)
Product differentiation
Control of resources
Financial resources
Ratio of fixed to variable
costs
Grades, size
Packaging
Market allocation (quotas)
Minimum prices
Contributions to research
Advertising (market development)
Market Information
Some issues
Crop forecasts
Demand forecastsquantity
and prices
Government information
programs
Problems
Price specification
(comparability of location,
time, and other factors)
Net vs. gross prices
(allowances and discounts)
Cost vs. accuracy of
information
Changing market orientation
and scope of market
(proportion of buyers and
sellers involved in open
markets)
Voluntary cooperation