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Market Analysis.

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Presentation on theme: "Market Analysis."— Presentation transcript:

1 Market Analysis

2 Contents Market size Market share Market growth Competitor analysis
Market segmentation Market research Sampling methods

3 Key terms Market size – the total number of sales in £ (value) or quantity (volume) in a market Market share – the % of a market an individual business has Market growth – the % increase in the size of the market on an annual basis Market segment – a section of consumers in the market which share similar characteristics

4 Market analysis Businesses use methods of market analysis to find out what is happening in the market These tools allow them to develop marketing strategies which exploit opportunities

5 Market size This helps businesses decide the potential profitability in a market Larger markets tend to have more opportunities to make a profit When a business is considering entering a new market they will be interested in market size and the fierceness of competition

6 Market share Market share figures allow a business to compare themselves to their competitors If the market is dominated by a number of large companies e.g., Supermarkets such as tesco, asda, Sainsbury's it is less attractive for new firms to aim at the entire market The distribution of market share in a market is influenced by the type of market that the business is operating in (monopoly – perfect competition)

7 Market growth This figure is crucial for a business
Many attractive markets are relatively small and fast growing therefore offering the potential of high profits Markets that are growing at a rapid rate tend to attract lots of new businesses Markets tend to grow the fastest at the beginning of the product life cycle

8 Market growth / decline
Sometimes markets suffer negative growth This often leads to companies leaving the market Some businesses may be able to exploit opportunities and segments using their own USPs when the market is entering into decline

9 Competitor Analysis Businesses need to have a good idea about their competitors to enable them to develop valid and successful marketing strategies Alongside market share a business often benchmarks their current / potential competitors in order to gain a greater understanding of their offering

10 Segmentation Analysis
Market segmentation is the process of splitting up the market into different segments or chunks which share the same characteristics Characteristics that businesses segment by can include: Age - Socio economic group Gender - Culture Ethnicity - Lifestyle

11 Segmentation Analysis
Segmentation analysis allows a business to tailor their marketing strategy to meet the needs of different customers Some market segments are more attractive than others as they may display lower levels of competition, faster market growth or more opportunities to make profits

12 Market Research Market research is the process of collecting, collating and analysing data about the market Primary or field research is research that is done first hand e.g. questionnaires, surveys Secondary or desk research uses existing sources of information e.g. books, journals

13 Primary research Advantages Fitness for purpose
Allows to target right segments Can explain difficult problems / concepts Disadvantages Can be time consuming Expensive Some forms have low response rates

14 Primary research methods
Postal surveys – these have a high sample size but low response rate, relatively cheap Telephone surveys – more expensive, higher response rate, can explain questions Interviews – smaller sample size, higher response rate, may be interviewer bias Focus groups – provide in-depth analysis, small sample size

15 Secondary research Advantages Quick and easy Relatively cheap
Disadvantages May be out of date May not be relevant

16 Secondary research methods
Census – provides information on all the households in the UK, updated every 10 years Internet – can provide a wealth of information however need to check validity of data Government statistics Books and journals Company reports MINTEL reports – these are often a good source of market information

17 Sampling Sampling refers to the methods used to select consumers to participate in market research Random sample – all of the population have an equal chance of being selected often done using a computer Quota sample – candidates are chosen based on their characteristics

18 Summary Market size – volume / sales in the market
Market share - % of the market a business has Market growth – the rate of increase in the size of the market Competitor analysis – look at statistics on competitors in the market Segmentation – splitting up the market into different groups based on their characteristics Market research – finding out about the market: Primary – 1st hand e.g. surveys Secondary – 2nd hand e.g. internet Sampling – method of selection of candidates for market research

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