Deregulation Excess global capacity Global competition Mergers & Acquisitions New Technology Changing customer expectations Disintermediation Demographics shifts Changing life & work styles
Markets Markets and and Competitive Competitive Space Space Chapter Three Marketing Management Drivers of Change • Deregulation • Excess global capacity • Global competition • Mergers & Acquisitions • New Technology • Changing customer expectations • Disintermediation • Demographics shifts • Changing life & work styles Marketing Management Product Market Structure • Generic Product market – Product-type product-market – Product Variants • Scope of productmarket – Basis for identifying buyers – Market size & characteristics – Brand or product categories competing Marketing Management Product-Market Product-Market Structure Structure SUPER MARKETS MICROWAVE OVENS FAST-FOOD MARKET CONVENIENCE STORES TRADITIONAL RESTAURANTS Marketing Management Three Three characteristics characteristics of of markets markets • Functions or uses of the product • The enabling technology of the product • Customer segments in the product-market Marketing Management Illustrative Product – Market Structure Food and beverages for breakfast meal •Generic Product Class •Product Type Cereals •Variant A Ready to eat Regular Natural Nutritional Life Pre-sweetened Product 19Marketing Management Special K •Variant B •Brands Identifying and Describing Buyers Building Customer Profiles DESCRIBING AND ANALYZING END-USERS How Buyers Make Choice s Environmental Influences Marketing Management Building Customer Profiles • Start with generic product – market • Move next to product- type and variant profiles >> increasingly more specific • Customer profiles guide decision making (e.g targeting, positioning, market segmentation etc.) Marketing Management ANALYZING COMPETITION Define Industry Structure and Characteristics Identify New Competitors Anticipate Actions by Competitors Identify and Describe Key Competitors PRODUCTMARKET STRUCTURE AND MARKET SEGMENTS Marketing Management Evaluate Key Competitors Industry Industry Analysis Analysis • Descriptive profile of • Analysis of the valuethe industry Chain (Vertical (Horizontal) Network) – – – – Characteristics Practices Consolidation trends Operating practices • Strengths & Weaknesses – Strategic Alliances – Vertical Integration – Distribution practices – Outsourcing – Assistance in information gathering Marketing Management 10 FORCES THAT DETERMINE INDUSTRY COMPETITIVNESS Threat of new entrants Bargaining strengths Of suppliers Rivalry among existing firms in industry Threats of substitute products Bargaining strengths Of buyers Describing Describingand andEvaluating Evaluatingthe theCompetitor Competitor Extent of Market Coverage Current Capabilities Competitor Evaluation Customer Satisfaction Past Performance Marketing Management 12 Identifying Identifying New New Competitors Competitors • Companies competing in a related product market • Companies with related technology • Companies targeting similar customer groups • Companies in other geographical regions with similar products Marketing Management 13 Reasons Reasons for for firms firms to to enter enter aa given given market market • High profit margins are being achieved • Future growth opportunities • No major market entry barriers • Few competitors • Ability to gain a competitive advantage Marketing Management 14 MARKET SIZE ESTIMATION Product-Market Forecast Relationships (area denotes sales in $’s) Market Potential Estimate Unrealized Sales Potential Company Sales Marketing Management Forecast Industry Market Forecast 15 Sales Forecasting Methods • Subjective Methods • Objective Methods – User Expectation – Sales force composite – Jury of executive opinion • Delphi Technique – Test markets – Time series • • • • Naive Moving Average Exponential Smoothing Extrapolation – Statistical demand analysis • Regression • Leading Indicator • Econometric Methods Marketing Management 16