Market and Customer Analysis

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Market and Customer Analysis
Requisite for Leadership for unless he knows
where he is going, any road will take him
there. Theodore Levitt Harvard Business Review
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Information Needed to Manage Performance Over Time

• Markets existing level of demand and potential
  demand
• Rate of replacement purchase and new customer
  purchase
• Businesss market share and potential market share

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Figure 3.1, Strategic Market Definition of the
Beverage Market
Degree of substitutability is a function of the
distance between markets
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Hypothetical Associative Network of the Beverage
Market
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Five Product Levels
Core benefit
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Conditions for the Cycle of DeclineMarketing
Myopia by Theodore Levitt

• The belief that growth is assured by an expanding
  and more affluent population
• The belief that there is no competitive
  substitute for the industrys major product
• Too much faith in mass production and in the
  advantages of rapidly declining unit cost as
  output rises
• Preoccupation with a product that lend itself to
  carefully controlled scientific experimentation,
  improvement, and manufacturing cost reduction

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Strategic Market Definition
A business with a narrow market focus sees only
the articulated needs of served customers. A
broad market vision encourages discovery of
unarticulated needs and uncovers new unserved
opportunities. Best
the organization must learn to think of itself
not as producing goods or services but as buying
customers, as doing the things that will make
people want to do business with it. Theodore
Levitt Harvard Business Review
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Strategic Market Definition

• Broad strategic market definition provides three
  key benefits
• Opens the window of opportunity to a broader set
  of customer needs
• Provides better understanding of potential
  substitutes and competitive threats
• Helps a business better understand fundamental
  customer needs

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Personal Computer Market Development
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Fig 3.4, Maximum Market Potential and Current
Market Demand

• Awareness product awareness and complete
  comprehension of the benefits
• Availability access in the geographic market
• Ability to Use lack knowledge, other resources,
  and/or requirements to make workable
• Benefit Deficiency not attractive or compelling
  enough
• Affordability cost is too high

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Figure 3.5, Market Penetration and Market
Development Index
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Figure 3.10, Share Development Tree
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Share Development Index
Actual Market Share SDI x 100 Potential
Market Share
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Figure 4.1Lexuss Customer Value Creation Process
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Figure 4.1Lexuss Customer Value Creation Process
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Figure 4.1Lexuss Customer Value Creation Process

• Value Creation Process
• Customer analysis concerning likes, dislikes, use
  behavior, and lifestyle.
• Competitor analysis of positioning strengths,
  weaknesses, and price.
• Improve product benefits that ad value.
• Seek a price point that delivers a customer
  value.
• Challenge product engineers to reduce cost.

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Figure 4.4Economic Benefits and Value Creation
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Figure 4.5Economic Value of a Telecommunications
Switch
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Fig. 4.10Measuring Perceived Product Benefits
Customer-Determined Relative Business Competitor
Relative Product Benefits Importance Rating A B
C Advantage Machine Up time 40 8 7 5 6 27 Print
Speed 30 9 8 5 5 20 Image Quality 20 7 7 7 6 0 Ea
se of Use 10 4 6 7 6 -10 100 37 Relative
Product Benefit 100 37 137