2. Bus 188 Part 2

3. Part 2 - The Marketing & Situation Analysis Part 2 - The Marketing & Situation Analysis w Topic 5. Define Your market w Topic 6. Personal Audit w Topic 7. Competition

4. Topic 5 Define Your Market w 1. Estimate Demand: Demand is a forecast of future buyer behavior characterized by:

5. Demand is... …willingness of potential buyers to purchase a given amount of goods and services at a given price at a given time under given circumstances...change these factors and demand will respond.

6. Demand w it presumes the ability to pay. w demand may be split amongst competitors. w Past demand (actual) has been recorded and can be looked up. (market shares). w potential new users can be estimated.

7. 2. Factors Affecting Buyer Behavior w # of available substitutes? w Quality of available substitutes? w Can the buyer do without the product? w Can the buyer postpone the purchase? w Is it a hi or lo-involvement decision?

8. Factors Affecting Buyer Behavior w How motivated is the buyer? w How strong are the competitors efforts? w Seasonality? w Other factors?

9. General Buyer Behavior is a Result Of: w Individual and Internal Factors w Group and External Factors

10. Individual & Internal Factors affecting Buyer Behavior w Personality w Learning w Perception w Motivation w Attitudes

11. Group & External Affects on Buyer Behavior w Culture w Subculture w Social Class w Peer Groups w Reference Groups w Physical Environment w Political/Legal w Marketers

12. A. Describing Your Market (s) w Decision Making Units - DMU's, basic element making up your potential market Person (individual)Person (individual) Informal Groups (Family, Roommates)Informal Groups (Family, Roommates) Formal Groups (Businesses, Resellers, Government Agencies)Formal Groups (Businesses, Resellers, Government Agencies)

13. B. Set Limits and Define the Potential Market w Geographics w Demographics w Lifestyle AIOPsychographics w Brand Loyalty w Usage Patterns w Key Benefits needs/wants/moti vations

14. C. Identify Market Segments & Target markets w Demand # of Customers (DMU’s)# of Customers (DMU’s) $ Sales Volume$ Sales Volume Unit Sales VolumeUnit Sales Volume w Market Penetration w Market Share w Special Segments Niches w Targeting Strategies UndifferentiatedUndifferentiated DifferentiatedDifferentiated ConcentratedConcentrated AtomizedAtomized

15. D. Describe The Typical Consumer In Target Market Roles Within The Decision Making Units Are: w Decision Maker w Purchaser w Influencer w User

16. 5. Decision Making Process w (1) Recognize Needs/Wants - Motivation A. Instant Evoked Set w (2) Information Search A. Internal - Evoked Set (mental search) B. External

17. 5. Decision Making Process cont. w (3) Evaluate Alternatives/Make Decisions What, Where, When, How To Buy w (4) Implement Purchase Decisions w (5) Post-Purchase Evaluation - Establish a Probability Of Repeating Same Purchase Decision = P(Beh.)

18. Analyzing Demand Lo vs. Hi Involvement Decisions w Purchase Cycle Frequency of purchases w Purchase Quantity per visit, avg. per month, etc. w Perceptions product type, brand issues w Key Decision Factors

19. Analyzing Demand Who is the customer? w geographically w demographically w Lifestyle/AIO/Psychographically w Loyalty/Usage w Key benefits sought/wants & needs

20. Average $ Sales per Customer Visit daily weekly monthly daily weekly monthly # of customers __________ __________ __________ # of units______________________________ $value ______________________________ /revenue High and Low Range ____________ _____________

21. Seeking A Competitive Advantage w 1960’s - Marketing Based w 1970’s - Manufacturing Based w 1980’s - Quality Based & TQM w 1990’s - Customer Service Based SOURCE: Total Customer Service: the Ultimate Weapon by Davidow & Uttel; Harper Perennial

22. Identifying Competitors w 1. 3 types based on needs filled & similarity of the product/service: w 2. Unrelated: competition for the same $.

23. Identifying Competitors cont.

24. w Unrelated: competition for the same $. (Gross Income; Disposable Income; Discretionary Income)