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TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 1 TAM302 Engineering Design Principles Syllabus Topic: Customer Requirement Driven.

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Presentation on theme: "TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 1 TAM302 Engineering Design Principles Syllabus Topic: Customer Requirement Driven."— Presentation transcript:

1 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 1 TAM302 Engineering Design Principles Syllabus Topic: Customer Requirement Driven Design & Competitor Analysis Market Analysis

2 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 2 Understand the M arket and its Potential Research Trends - General & specific market forecasts Set Some Realistic Marketing Objectives Unit sales, revenue, profit objectives etc. Develop Marketing/Product Strategy Identify potential Target Market, Competitive Tactic, Market Position, Segment and its size, & Differentiation. Market Analysis for Product Design Teams

3 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 3 Presto Marketing driven company: Product development Small family-owned mid-west company Kitchen Products: very competitive market (with many large-company competitors)

4 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 4

5 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 5 Market Potential: Industry Trends Ex: Sporting and Athletic Goods 8.9% 0.7% -2.1% -3.0% (predicted) Data: US Industrial outlook 1991

6 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 6 Situation Analysis to estimate potential and to Set Objectives 850,000 people buy an average of 10 disposable razors each month. Survey indicates that 1 in 100 would immediately move over to new cartridge type if available. Estimated market potential = 850,000 x 10 x 0.01 = 85,000 per month Objective: Be selling 80,000 per month by end of first year Realistic objectives can only be derived from the results of your market analysis Example:

7 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 7 Sales Forecasting: Existing Products Mechanical Extrapolations: extend historical data into the future; moving averages or least squares (may miss turning points) Analytical Methods: regression analysis or logarithms to predict based on trend analysis Jury of Executive Opinion

8 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 8 Sales Forecasting: New Products Consumer Surveys & Focus Groups Substitute Method: Estimating replacement potential (e.g. based on % of existing consumers who would switch) Test Markets: expensive but reliable; place the product on the market on a limited basis

9 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 9 Marketing Objectives The marketing objectives are the qualitative and quantitative goals based on data gathered from the market analysis. The objectives become the basis for the development of the marketing strategy. Example: One year's marketing plan for one of Gillette's fastest growing products: Achieve a 20% market share of the cartridge razor market Achieve a profit contribution of 43% Retain pegboard space at checkout counters

10 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 10 Direction: "If you don't know where you are going any road will get you there" - answers basic question: "Where do we want to go?" Standard of Evaluation: performance yardstick Management by objectives (MBO) proven over: MBC (crisis): reactive rather than proactive MBS (subjectives): 'do your own thing the best way you know how' (manage) MBE (extrapolation): 'if it isn't broken don't fix it' - 'has done o.k. for us up to now' MBH (hope): 'If you try hard enough and long enough things will work out o.k.' Why Define Marketing Objectives?

11 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 11 Guidelines for Good Marketing Objectives Clear & concise statements Name specific results in key areas Specify the period Use measurable terms Product objectives should be consistent with organizational objectives Make objectives challenging Make objectives attainable

12 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 12 Key Areas for Marketing Objectives 1. Revenue Objectives Basic measure of the level of activity State as % or total number 'Achieve an increase in sales' 'Increase sales next calender year from $850,000 to $1.5 million'

13 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 13 Key Areas for Marketing Objectives 2. Profit Objectives Takes into account costs of meeting revenue objectives. State as total net profit or % increase: 'Our objective is to maximize profit' 'Generate a 15% increase in profits by the end of 1995

14 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 14 Key Areas for Marketing Objectives 3. Customer Objectives Serve as enabling objectives in determining sales and profits; represent direction for promotional aspects of marketing and product design. Should be stated in objectively measurable terms: 'Increase customer goodwill' 'Have at least 85% of our customers rate us as "best" in the area in our 1993 annual survey'

15 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 15 Assembling and allocating the resources necessary to achieve a company's marketing objectives with emphasis on competitive opportunities, costs, and time. The result of blending of the 4 p's: The product - to be offered The place - distribution of the product The promotion - communicate to pot.customers The price - charged for the product Three types: 1. Market targetting, 2. Competitive strategy, 3. Positioning strategy Marketing Strategy Strategy needed to accomplish objectives

16 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 16 Model T Granada Mustang Fairmont Lincoln Mercury Fiesta Volkswagen Bug From: Marketing Planning Guide, Stevens et al, publ. by the Haworth Press Undifferentiated (aggregation) Multi-Segment (part of aggr. mkt.) Focused (concentration) Market Targeting Decision process and activities conducted to identify a market to serve

17 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 17 Adapted from: Marketing Planning Guide, Stevens et al, publ. by the Haworth Press Competitive Strategy (or Tactic) Market LeaderExpand; new uses/users Protect: innovative tactics Market ChallengerAttack: aggressive promotion Backdoor: innovation options Guppy: go after smaller firms Market followerCopy leader: match leader (do not challenge) Coping strategy: no confront. Market NicherGeographic niche: quick resp. (specialize)Product niche: unique to cust. Competitive Position Possible Strategies

18 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 18 Adapted from: Marketing Planning Guide, Stevens et al, publ. by the Haworth Press Positioning Strategy (or Tactic) High Luxury Low Luxury Low Price High Price When few competitors occupy a position it becomes attractive to position products in the same quadrant Mercedes BMW Lexus Legend Infiniti

19 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 19 Market Segmentation 1. What are the identifying characteristics? 2. What is the size of the segment? Attempt to develop a product that appeals to some part of the aggregate market Two basic questions:

20 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 20 Psychographic (or lifestyle) Segmentation Useful in diagnosing markets, determining why consumers buy, and for aiming product design: Personality, life-style, self-concept (something lacking?), buying motives, attitudes. Examines: 1. Interests (family, home, job, etc.) 2. Opinions (social issues, politics, culture) 3. Activities (work, hobbies, vacation, shopping E.g. Timex's targeted the active lifestyle with Ironman and Triathlon Ways of Segmenting Market Variables useful in deciding why buyers may want to buy.

21 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 21 Male Lifestyles Scott, the frustrated factory worker, married early, had children, and now has financial troubles. Needs fantasy to make life more bearable, wants a sports car, doesn't think there is too much sex or violence on TV Ben, the self-made business man, believes you get what you pay for, values his time, worries about excessive sex and violence on TV, and thinks the government should keep its nose out of private business

22 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 22 Candice, the chic suburbanite, supports women's lib., has many activities, and buys only whole-grain cereal for her children Cathy, the contented mother, married early, big family, not enthusiastic about women's lib., is trusting, relaxed and buys cereals that her children demand Eleanor, elegant socialite, spends little time preparing meals and on women's lib., spends lots of money, travels, and thinks face cream is better if it costs more. Female Lifestyles

23 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 23 Benefit Segmentation Focuses,on benefits that are associated with the product & importance in purchase decisions: Economy, convenience, service, prestige. Examples: Bank customers see convenience as the most important benefit (then service) Toothpaste benefits: decay prevention, white bright teeth, good taste, fresh breath etc. Bright teeth most important to tobacco users and single persons. Ways of Segmenting the Market

24 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 24 Ways of Segmenting the Market Variables useful in guiding the product to a specific target Geographic Segmentation Region; urban, suburban, or rural; climate; state, county, or city. The most obvious way of identifying subparts of the aggregate market. Easy to apply but not always significant. Snow tires, air conditioners, electric vehicles, types of bicycle etc.

25 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 25 Ways of Segmenting the Market Demographic Segmentn. Variables that distinguish states of existence: Age, sex, nationality, education, religion, race, occupation, income, social class, marital status, birthrate, family size, and family life cycle under $5000 $10,000 $25,000 over $25, # of kids

26 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 26 Differential Advantage Product Differentiation To obtain advantage over competition through observable differences in the product: 1. Obvious useful features (Polaroid's instant film processing) 2. Obvious but no utility (Life Savers: 'the candy with the hole') 3. Non-obvious, must be promoted (Estee Lauder: allure more than physical characteristics)

27 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 27 Differential Advantage Service Differentiation Avis {1950s}: "We're number two - we try harder!" Seek differences in the service offered or corporate culture that are of sufficient character and quality to give a preferred position in the consumer's acquisition of your products and/or services. Examples: Motorola "6 quality" and "Total Customer Satisfaction" Avon:Selling personal products direct-to-home Jelly: "With a name like Smucker, it has to be good"

28 TAM 302 Customer Requirement Driven Design & Competitor Analysis – PDS 28 Understand the M arket and its Potential Research Trends - General & specific market forecasts Set Some Realistic Marketing Objectives Unit sales, revenue, profit objectives etc. Develop Marketing/Product Strategy Identify potential Target Market, Competitive Tactic, Market Position, Segment and its size, & Differentiation. Market Analysis Section of Project Report


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