Opportunity Analysis, Market Segmentation, and Market Targeting by Mostafa Ewees


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  • Prospective buyers willing and able to purchase the existing Or potential offering of an organization.
  • Opportunity Analysis, Market Segmentation, and Market Targeting by Mostafa Ewees

    1. 1. Opportunity Analysis, Market Segmentation, and Market Targeting Mostafa Ewees
    2. 2. In this chapter, you will learn about… 4- <ul><li>Opportunity Analysis </li></ul><ul><li>What is a Market? </li></ul><ul><li>Market Segmentation </li></ul><ul><ul><li>Benefits of Market Segmentation </li></ul></ul><ul><ul><li>Bases for Market Segmentation </li></ul></ul><ul><ul><li>Requirements for Effective Market Segmentation </li></ul></ul>
    3. 3. In this chapter, you will learn about… 4- <ul><li>Offering-Market Matrix </li></ul><ul><li>Market Targeting </li></ul><ul><li>Market Sales Potential and Profitability </li></ul><ul><ul><li>Estimating Market Sales Potential </li></ul></ul><ul><ul><li>Sales and Profit Forecasting </li></ul></ul>
    4. 4. Marketing Strategy involves… 4- Selection of Markets Development of programs to reach these markets <ul><li>Customer Satisfaction </li></ul><ul><li>Organizational Objectives </li></ul>
    5. 5. Opportunity Analysis Involves… <ul><li>Opportunity Identification </li></ul><ul><li>Opportunity </li></ul><ul><ul><li>- Organization Matching </li></ul></ul><ul><li>Opportunity Evaluation </li></ul>4-
    6. 6. Opportunity Identification <ul><li>Identifying new types of classes of buyers </li></ul><ul><li>Uncovering unsatisfied needs of buyers </li></ul><ul><li>Creating new ways or means for satisfying buyer needs </li></ul>4-
    7. 7. Opportunity-Organization Matching <ul><li>Determines whether an identified opportunity is consistent with an organization’s business, mission, and competencies </li></ul><ul><li>SWOT Analysis often employed </li></ul><ul><li>Financially attractive opportunities are sometimes rejected at this stage due to lack of match </li></ul>4-
    8. 8. Opportunity Evaluation <ul><li>Qualitative </li></ul><ul><ul><li>Evaluates the likelihood of capitalizing on a market niche </li></ul></ul><ul><li>Quantitative </li></ul><ul><ul><li>Yields estimates of market sales potential and company sales forecasts </li></ul></ul>4- Has both qualitative & quantitative phases
    9. 9. Opportunity Evaluation Matrix Market niche criterion Competitive Activity Buyer Requirements Demand/ Supply Political, Technological, and Socioeconomic Forces Organizational Capabilities Buyer Type Buyer Needs Means for Buyer Needs
    10. 10. A Market Consists of… 4- Prospective buyers willing and able to purchase the existing or potential offering of an organization. Focus on Buyers Effective Demand “ Offering” rather than product or service Market Share
    11. 11. What is Market Segmentation? <ul><li>The breaking down or building up of potential buyers into groups called </li></ul><ul><li>Market Segments </li></ul>4-
    12. 12. Benefits of Market Segmentation 4- <ul><li>Identifies opportunities for new product development </li></ul><ul><li>Helps design marketing programs most effective for reaching homogenous groups of buyers </li></ul><ul><li>Improves allocation of marketing resources </li></ul>
    13. 13. Market Segmentation Variables 4- Market Segmentation Variables Benefits Sought Psychographic Socioeconomic Behavioral
    14. 14. Fundamental-Buyer Related Questions <ul><li>Who are they? </li></ul><ul><li>What do they want to buy? </li></ul><ul><li>How do they want to buy? </li></ul><ul><li>When do they want to buy? </li></ul><ul><li>Where do they want to buy? </li></ul><ul><li>Why do they want to buy? </li></ul>4-
    15. 15. Each Market Segment should be… 4- Measurable Differentiable Accessible Substantial
    16. 16. Sample Offering - Market Matrix for Handheld Calculators 4- Market Segments (User Groups) Business Scientific Home School Simple Moderate Complex Very complex
    17. 17. Market Targeting Specifying segments to pursue 4- Differentiated Marketing The organization pursues several different market segments simultaneously Organization Market
    18. 18. Market Targeting Specifying segments to pursue 4- Concentrated Marketing The organization focuses on a single market segment Organization Market
    19. 19. Market Sales Potential <ul><li>The marketing mix activities and efforts of all organizations </li></ul><ul><li>A set of environmental conditions </li></ul>4- Maximum level of sales available to all firms serving a defined market in a specific time period given:
    20. 20. Market Sales Potential and Profitability Chain Ratio Method <ul><li>Market Sales Potential is a function of: </li></ul><ul><li>The number of Prospective Buyers (B) </li></ul><ul><li>The Quantity Purchased (Q) </li></ul><ul><li>The Price of an Average Unit (P) </li></ul>4- Market Sales Potential = B x Q x P
    21. 21. 4- Chain Ratio Method Example <ul><li>Market Potential for cola-flavored carbonated drink in Canada: </li></ul><ul><li>Population (P) = 32,000,000 </li></ul><ul><li>Proportion of P that consumes carbonated beverages (R) = 95% </li></ul><ul><li>Proportion of R that consumes cola-flavored carbonated beverages (C) = 70% </li></ul><ul><li>Average number of liters of cola consumed per cola-consumer per week (L) = 1.7 liters </li></ul><ul><li>Average price per liter of cola (A) = $ 0.50 </li></ul><ul><li>Market Sales Potential = P x R x C x L x A </li></ul><ul><li>= 32 Million x 0.95 x 0.70 x 1.7 x 52 x 0.50 = $94.06 Million </li></ul>
    22. 22. What is a Sales Forecast? 4- Level of sales a single organization expects to achieve based on a chosen market strategy and an assumed competitive environment.
    23. 23. Forecasted Sales reflect… <ul><li>The size of the target market </li></ul><ul><li>The marketing mix chosen for the target market </li></ul><ul><li>The assumed number of competitors and competitive intensity in the target market </li></ul>4-
    24. 24. Making a Sales Forecast 4- <ul><li>M arket potential (M) </li></ul><ul><li>Proportion of market you are T argeting (T) </li></ul><ul><li>Extent of market C overage (C) </li></ul><ul><li>Number of U nits expected to sell per customer during the year (U) </li></ul><ul><li>Average P rice per unit (P) </li></ul>Sales Forecast is a function of: Sales Forecast = M x T x C x U x P
    25. 25. Making a Sales Forecast Example 4- Total number of potential buyers = 1 Million Target Market (25%) = x 0.25 Market Coverage (75%) = x 0.75 Units purchased per year (20) = x 20 Average Price ($10) = x $10 Forecasted Sales = $ 37.5 Million