Transition to Management

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3-1
2
Introduction

• Market analysis
• Breaks the industry into segments and specifies
  a segment or target market that the firm will
  tackle

3
Market Analysis

• Firms target market
• Its customers
• Its competitors
• How it will compete in the marketplace
• Its potential sales and market share

4
Market Analysis

• Helps define the nature of the business
• Affirms that a company has a well thought out
  target market
• Understands its customer and can generate sales

5
Market Segmentation

• Markets can be segmented by
• Geography
• Demographic variables
• Psychographic variables
• Behavioral variables
• Product type

6
Market Segmentation and Target Market Selection

• Market segmentation
• Homogeneity of needs and wants within the segment
• Heterogeneity of needs and wants among the
  segments
• Small differences within segments
• Distinct
• Size
• Profitable

7
Selecting a Target Market

• Once a firm segments its market, it selects a
  segment within the market to target
• Focus on a single market

8
Target Market Size and Trends

• Estimate size of similar businesses
• Examine industry trends

9
Buyer Behavior

• Decision making
• Who makes the decision to purchase?
• Individuals
• Groups

10
Involvement

• High involvement
• Medium involvement
• Low involvement

11
Competitor Analysis

• Detailed analysis of a firms competition
• Understand positions of major competitors and the
  opportunities that are available to gain a
  competitive advantage in one or more areas

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Direct, Indirect, and Future Competitors

• Direct competitors
• Businesses that offer a product similar to yours
• Indirect competitors
• Businesses that offer close substitutes to your
  product
• Future competitors
• Businesses that could move into direct or
  indirect competitor roles

13
Competitive Intelligence

• The process of gathering information about your
  competitors

14
Competitive Analysis Grid

• Competitive analysis grid
• A tool for organizing and presenting information
  you collect about your competitors

15
Estimate of Annual Sales and Market Share

• Four ways to estimate initial sales
• Contact premier trade associations in your
  industry
• Find a comparable firm
• Conduct Internet searches
• Use a multiplication method to try to arrive at
  a reasonable number