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Chapter Content
1. Describing and Analyzing End-Users 2. Analyzing Competitors 3. Market Size Estimation 4. Segmenting Markets
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It is useful to develop profiles of enduser buyers for the generic, producttype, and product-variant levels of the product-market.
family size, age, income, geographical location, sex, and occupation are often useful in identifying buyers in consumer markets.
1. Who is in the market and what is the extent of their power with regard to the organization? 2. What do they buy? 3. Why do they buy? 4. Who is involved in the buying? 5. How do they buy? 6. When do they buy? 7. Where do they buy? 8. What are the customers hot and cold spots?
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1. Describing and
Identifying & Describing Buyers
Illustrative factors used to identify end-users in organizational markets include
type of industry, size, location, and product application.
Many published sources of information are available for use in identifying and describing customers.
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1. Describing and
How Buyers Make Choices
We also need to try to find out why people buy products and brands. When considering how customers decide what to buy, it is useful to analyze how they move through the sequence of steps leading to a decision to purchase a particular brand. Buyers normally follow some type of decision process. They begin by recognizing a need (problem recognition); next,
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1. Describing and
How Buyers Make Choices
They seek information; then, they identify and evaluate alternative products; and finally, they choose a brand. Of course, the length and complexity of this process varies by product and situation. Decisions that are repetitive and for which a buyer has past experience tend to be routine. One part of studying buyer decision process is finding out what criteria people use in making decisions.
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1. Describing and
Environmental Influences
The final step in building customer profiles is to identify external factors that influence buyers and thus changing the size and composition of the market over time. These influences include the government, social change, economic shifts, technology, and other factors that alter buyers needs and wants.
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2. Analyzing Competitors
Buyers and competitors with products to meet buyers requirements comprise product-markets. Competitor analysis examines the companies and brands that compete in the product-market of interest. Analyzing competition follows the five steps: 1) Define industry structure and characteristics; 2) Identify and describe key competitors; 3) Evaluate key competitors; 4) Anticipate actions by competitors; and 5) Identify new competitors.
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2. Analyzing Competitors
Defining the Competitive Arena
A complete understanding of the competitive arena helps to guide strategy design and implementation.
Because competition often occurs within specific industries, an examination of industry structure is important in defining the competitive arena, recognizing that more than one industry may serve the product-market.
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2. Analyzing Competitors
Defining the Competitive Arena
This analysis looks at two kinds of info: (1) a description of the industry, and (2) an analysis of the distribution channels that link the various organizations in the value-added chain serving end-users.
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2. Analyzing Competitors
Defining the Competitive Arena
Industry Analysis. The information needed for
an industry analysis includes (1) industry characteristics and trends, such as sales, number of firms, and growth rates, and (2) operating practices of the firms in the industry, including product mix, service provided, barriers to entry, and geographical scope. The industry definition is based on the organization conducting the market analysis. Thus, an automobile producer should look at the industry comprised of 20 automobile producers.
2. Analyzing Competitors
Defining the Competitive Arena
Analysis of the Value-Added Chain. A
study of supplier and distribution channels is important in understanding and serving product-markets. While producers may go directly to their end-users, many works with other organizations through distribution channels. The extent of vertical integration by competitors backward (supply) and forward toward end-users is useful information. The type of relationships in the distribution channel should be identified and evaluated. The extent of outsourcing activities in the value chain is also of interest.
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2. Analyzing Competitors
Defining the Competitive Arena
Competitive Forces. Michael Porter offers a
useful basis for examining competitive forces in the value-added chain. The traditional view of competition is expanded by recognizing five competitive forces that impact industry performance: 1. Rivalry between existing companies 2. Threat of new entrants 3. Threat of substitute products 4. Bargaining power of suppliers 5. Bargaining power of buyers
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2. Analyzing Competitors
Key Competitor Analysis
Competitor analysis is conducted for firms directly competing (e.g., Nike and Reebok) and other companies that management may consider important in strategy analysis (for example, potential market entrants). We will look at two major aspects of competitor analysis:
(1) preparing the descriptive profile for each competitor, and (2) evaluating the competitors strengths and weaknesses.
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2. Analyzing Competitors
Key Competitor Analysis
Describing the Competitor.
A key competitor is a firm going after the same market target as the firm conducting the analysis. Information needed to describe key competitors are 1) business scope and objectives, 2) management experience, capabilities, and weaknesses, 3) market position and trends, 4) market target (s) and customer base, 5) marketing program positioning strategy, 6) financial, technical, n operating capabilities, and 7) key competitive advantages.
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2. Analyzing Competitors
Key Competitor Analysis
Evaluating the Competitor. Although
competitor description and evaluation are interrelated, it is useful to separate the two activities. Evaluation considers the strengths and weaknesses of each competitor in the four areas: 1. Extent of market coverage 2. Customer satisfaction 3. Past performance 4. Current capabilities
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2. Analyzing Competitors
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2. Analyzing Competitors
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2. Analyzing Competitors
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Market size is usually measured by dollar sales and/or unit sales for a defined product-market and specified time period. Other size measures include the number of buyers, average purchase quantity, and frequency of purchase. Three key measures of market size are market potential, sales forecast and market share.
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4. Segmenting Markets
Market segmentation needs to be considered early in the development of market-driven strategy. Segments are determined, customer value opportunities explored in each segment, organizational capabilities matched to promising segment opportunities, market target(s) selected from the segment(s) of interest, and a positioning strategy developed and implemented for each market target.
(See Chapter 4 of Customer Analysis)
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Group Discusion
4 Group of Students Group#1: Study the Students Behaviors for University in Cambodia Group#2: Analyzing Competitors ( Universities Group#3: Market Size Estimation Group#4: Segmenting Markets
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Procedures
Each Group has 20 minutes to present Evaluation: Group#1: Eye contact & Organization of Presentation Group#2: Feel Confidence & Voice of Speaking Group#3: Body Language, Contents Group#4: Ways of Explanation
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