Market Analysis and Strategies

Posted on Nov 14, 2024 in Economy

Market Research

Competitive Landscape

Companies need sufficient market information, including environmental factors, due to:

  • Competitive Pressure: Rapid development and release of new products.
  • Expanding Markets: Increasing number of companies in domestic and international markets.
  • Cost of Errors: New product failures can severely impact a company.
  • Growing Consumer Expectations: Meeting evolving consumer demands.

Market Research Process

Market research involves:

  • Obtaining information
  • Interpreting information
  • Communicating information

Marketing Information Sources

  1. Nonrecurring Research Projects: Surveys conducted by the company’s sales department, distributors, etc.
  2. Syndicated Services: Periodic reports produced and sold by various companies.
  3. Marketing Information System (MIS): Generates, analyzes, disseminates, stores, and retrieves information for marketing decisions.

Effectiveness of Information Systems

Effectiveness depends on:

  1. Data nature and quality
  2. Data processing methods
  3. Collaboration between system operators and managers

Limitations of Marketing Information Systems

  1. Identifying relevant information for decision-making can be challenging.
  2. Obtaining, organizing, storing data, and distributing reports can be expensive.
  3. Limited use for unforeseen problems.
  4. Decision Support Systems: Allow executives to directly interact with data for faster results.

Market Research Projects

Procedure

  1. Defining the Objective: Finding solutions to problems or defining the problem itself.
  2. Situation Analysis: Investigating facts for a more rigorous problem formulation.
  3. Informal Investigation: Gathering information from company employees and external sources.
  4. Formal Investigation: Using primary data collected for the project and secondary data from various sources.

Primary data collection methods:

  • Surveys (personal, telephone, mail)
  • Observation
  • Experimental (test marketing)

Market Segmentation and Target Market Strategies

  1. Treat the market as a single unit: Using one marketing mix for the entire market (shotgun method).
  2. Segment the market: Targeting smaller segments with specific marketing mixes (rifle method).

Market Segmentation

Dividing the total market into smaller groups with similar demand factors.

Conditions for Effective Segmentation

  1. Measurable criteria and obtainable data
  2. Accessibility through marketing channels
  3. Profitable segment size

Segmentation Methods

  • Geographic, economic, demographic, psychological variables
  • Psychographics: Personality, lifestyle, market behavior
  • Behavioral Targeting: Benefits sought by consumers
  • Consumption rate

Product Planning and Development

A product is a set of tangible and intangible attributes.

Consumer Goods Classification

  1. Convenience Goods: Frequently purchased with minimal effort.
  2. Shopping Goods: Compared for quality and price before purchase.
  3. Specialty Goods: Strong brand preference with significant purchase effort.
  4. Unsought Goods: Unknown or unwanted products.

Business Goods Classification

  1. Raw Materials: Become part of another tangible product.
  2. Manufacturing Materials and Parts: Processed materials and unchanging parts.
  3. Facilities: Expensive and lasting equipment.
  4. Accessory Equipment: Expensive equipment used in business operations.
  5. Operating Supplies: Low-priced, short-lived goods.

Pricing

Price influences production factors and is associated with quality.

Pricing Objectives

  • Profit-Oriented: Achieving target return or maximizing profits.
  • Sales-Oriented: Increasing sales volume or market share.
  • Status Quo-Oriented: Price stabilization and competitive response.

Nonprice Competition

Using marketing mix elements other than price to compete.

Distribution Channels and Intermediaries

Intermediaries are for-profit companies facilitating product purchase and sale.

Intermediary Roles

  • Provide market information, interpret consumer desires, promote products, store products, buy products (for producers)
  • Subdivide large quantities, transport products, expand consumer choices (for customers)

Designing Distribution Channels

  1. Specify distribution function
  2. Select channel type
  3. Determine distribution intensity
  4. Select specific channel members

Main Distribution Channels

  • Consumer Goods: Various channels from producer to consumer
  • Industrial Goods: Direct or indirect channels to users
  • Services: Direct or agent-based channels to consumers

Multiple and Dual Distribution

Using multiple channels for wider market coverage.

Vertical Marketing Systems

  • Corporate: Direct ownership of distribution channels
  • Contractual: Independent entities coordinating through contracts
  • Administered: Coordination through economic power

Factors Influencing Channel Choice

  • Market considerations (type, size, concentration, order size)
  • Product considerations (unit value, perishability, technical nature)
  • Intermediary considerations (services, availability, attitudes)
  • Company considerations (control, services, executive ability, finances)

Distribution Intensity

  • Intensive Distribution: Selling through all available outlets
  • Selective Distribution: Selling through a limited number of outlets
  • Exclusive Distribution: Selling through a single intermediary in a given market

Promotion

Promotional Methods

  1. Personal Selling: Direct interaction with potential buyers
  2. Advertising: Mass, impersonal communication
  3. Sales Promotion: Supplementing advertising and personal selling
  4. Public Relations: Creating positive attitudes and opinions
  5. Publicity: Free news coverage

Promotional Mix

The combination of promotional methods.

Factors Influencing the Promotional Mix

  • Target market (willingness to buy, geographic dimension, customer type, concentration)
  • Product type (unit value, adaptation level, service requirements)
  • Product life cycle (introduction, growth, maturity, decline)
  • Available funds

Promotional Budget Methods

  1. Percentage of sales
  2. All available funds
  3. Following the competition
  4. Objective and task method

Foreign Trade (FTAs)

International conventions governing trade between countries.

Unfair Competition

  • Export Subsidies: Government subsidies to boost exports
  • Dumping: Selling below fair market value

World Trade Organization (WTO)

International body regulating trade rules.

  1. Facilitating free trade
  2. Ensuring transparent and predictable trade rules
  3. Resolving trade disputes