J0704-Business Plan Market and Competition Session 10-11.
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J0704-Business Plan Market and Competition Session 10-11
J0704-Business Plan Your market has a free choice and only by supplying what the market wants, and not by your – Michael J. Ferguson Help your investors know how you will compete
J0704-Business Plan The Elements of an Market and competition Market and competition summary Market description-segments and target markets Market size and trends Competition identification Main competitor Competitor analysis Market share Customer needs Market obstacles Market opportunities
J0704-Business Plan Market Description-Segments and Target Markets To write market description, you will need to develop a market analysis. A market analysis helps you understand: –Who your customers are –Why they use your products or services –How many customers are in your market –How can reach them
J0704-Business Plan Market Description-Segments and Target Markets Market Segmentation –Most market tend to be segmented in different ways, such as by price point, product or services features, product function, specialty, sales method, delivery method, geography, consumer groups, or any combination of these
J0704-Business Plan Market Description-Segments and Target Markets Target Market –To identify tour target market, you must match what you sell at what price and how you sell it with the needs of consumers in your targeted market segments. Consumer profile –Four tools available to get close-up your consumer profile : Customer analysis Consumer demographic analysis Consumer psychographic analysis Consumer geographic analysis
J0704-Business Plan Market Description-Segments and Target Markets Customer Analysis –From your research, obtain an estimate of the percentages of your total market for each of the customer types –Example : Customer types –Commercial »Business12% »Institution 6% –Consumers82% Total100%
J0704-Business Plan Market Description-Segments and Target Markets Customer Analysis –Commercial : institution Government offices2% School3% Hospitals1% Subtotal6%
J0704-Business Plan Market Description-Segments and Target Markets Consumer Demographic analysis –Typically, these are gender, age, Marital status Family size Annual household income Occupation Education level Residential location Home ownership
J0704-Business Plan Market Description-Segments and Target Markets Consumer Psychological analysis –Less objective –The result can show the indirect and intangible benefits your purchaser derives from the product or service or indirect and intangible need it fulfills –Help to understand consumer buying pattern and buying decisions
J0704-Business Plan Market Description-Segments and Target Markets Consumer Geographic analysis –Describe are that you intend to serve and identifies the density of your customers in those areas. –Areas can be national, regional, city,etc
J0704-Business Plan Market Size and Trend Begin this segment with the current, overall population on your area Describe percentage of population that match your consumer and customer profiles Make comparison of population, anticipated numbers of customers and overall area in square miles of your sales area Express any trend in your market you can forecast
J0704-Business Plan Competition Identification It is necessary to find as much accurate data as possible about the competition- for your marketing strategy Get data such as : –Name of competitors –Total number of sales for each or even the number of employees per business
J0704-Business Plan Main competitor Identify main competitor and concentrate on them Answer these questions : –Who are the major competitors? –What are the keys to their success ? –What are their strength and weakness ? –How do you compare with them ?
J0704-Business Plan Competitor Analysis Compile a list of factors that would work best for your type of business You can make up a worksheet for each competitor Be objective Consider intangible factors
J0704-Business Plan Market Share A percentage estimate of your company’s expected share of the total industry sales in your sales area Per capita estimation Analyze the census
J0704-Business Plan Customer Needs Identify the different benefits your buyer will derive from your products or services Consider tangible and intangible benefit
J0704-Business Plan Market Obstacles Explain the obstacles new competitors must overcome to enter your market Some examples of possible obstacles for new competition are substantial start-up costs, lack of suppliers and distributors, patent, insufficient market and market saturation, including price wars
J0704-Business Plan Market Opportunities Examine your market research for areas in the market that can be developed by applying some of the market-driven strategies Can you find a new market that is untapped by your competitors to provide a product or service for an unfulfilled need ?