Download The Market - UMC Administration Course

A) Warm up: What do you understand by market? Make a list of words related to that term.
B) In pairs, discuss the meaning of the following terms.
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To Size up
Competitors
Consumption
Production
Retail outlet
Costs
Franchise
Alliances
Opportunity
Execution
Geography boundary
Niche
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Profit
Coopetitor
Market analysts
Strategic criteria
Customer
Size of the
market
Capabilities
Applicability
Profitability
Turnover
Sensitive
market
C) Read the following definitions and give examples.
The market, the free market and market economy describe an economic system where prices,
jobs, wages, etc. are not controlled by the government, but depend on what people want to buy and
how much they are willing to pay.
In marketing, the term market refers to the group of consumers or organizations that is
interested in the product, has the resources to purchase the product, and is permitted by law and
other regulations to acquire the product. The market definition begins with the total population and
progressively narrows as shown in the following diagram:
Beginning with the total population, various terms are used to describe the market based on the
level of narrowing:





Potential market - those in the total population who have interest in acquiring the product.
Available market - those in the potential market who have enough money to buy the
product.
Qualified available market - those in the available market who legally are permitted to buy
the product.
Target market - the segment of the qualified available market that the firm has decided to
serve (the served market).
Penetrated market - those in the target market who have purchased the product.
D) Word combinations with “market”
Pressures: the way a market economy makes sellers produce what people want, at prices they are
willing to pay.
Market
Place: producers and buyers in a particular market economy, and the way they behave.
Prices: the amount of money people are willing to pay for a commodity or a product.
Reforms: changes a government makes to an economy, so that it becomes more like a market
economy.
Potential: estimated maximum total sales revenue of all suppliers of a product in a market during a
certain period.
Opportunity Analysis: application of forecasting techniques to the market factors that may influence
the demand for a product identified as a market opportunity
Share: percentage of total sales volume in a market captured by a brand, product, or firm
Growth: an increase in the demand for a particular for a particular product or service over the time.
Segment: identifiable group of individuals, families, firms, or organizations, sharing one or more
characteristics or needs in an otherwise homogenous market
Segmentation: process of defining and sub-dividing a large homogenous market into clearly
identifiable segments having similar needs, wants, or demand characteristics
Leaders: brand, product, or firm that has the largest percentage of total sales revenue (the market
share) of a market
Challengers: any person or entity which is a rival against another. In business, a company in the
same industry or a similar industry which offers a similar product or service.
Followers: A firm that is happy to follow the leaders in a market place without challenging them,
perhaps taking advantages of opportunities created by leaders without the need for much marketing
investment of its own.
Research: component of marketing research whereby a specific market is identified and its size and
other characteristics are measured.
Exercises:
1) Replace the underlined expressions with words from C.
I´m Kalil and I am marketing manager for Coca-Cola in Holland. In this market, we
(1) sell more than any other cola. In fact, we (2) have 55 percent of the market. (3)
Sales are increasing at seven to eight percent per year. There are two main (4)
groups of users: those who drink it in cafés, bars and restaurants, and those who
buy it to drink at home. Of course, many users belong to both groups, but this is our
(5) way of dividing our consumers.
2) Complete the following text with expressions from B and C.
I n China, all economic activity used to be controlled by the state. Prices
were fixed by the government, not by buyers and sellers in the market
(1) __________________. But in the last 20 years there has been a
series of market (2) __________________ that have allowed people to
go into business and start their own companies.
Market (3)
__________________ are determined by what buyers are willing to pay,
rather than by the state. There are still state-owned companies that lose
a lot of money. Until recently, they have been protected from market (4) __________________, but
some other factors eventually make them close down. Of course, the market (5)
__________________ has its losers: those without work, and victims of crime, which used to be
very rare.
3) Read the following information. Answer the questions below.
Definition of Potential Market
A potential market can be defined as an aggregate of all individuals, firms, and
organizations in a particular market that have some level of interest in a particular
product.
Estimating Market Potential
Estimating the market potential of a business is
critical in evaluating its viability and provides an
estimate of the maximum total sales potential for a
given market. Once the estimated market potential
has been calculated, it is possible to determine if the
market is large enough to sustain your proposed
business or sustain an additional competitor in the
marketplace. It is important to remember that the estimated market potential sets
an upper boundary on the market size and can be expressed in either units and/or
sales. Unless there are no direct or indirect competitors, a business will capture a
share of the total estimated market potential, not all of it.
Estimating the market potential for a business requires specific information on
the number of people or potential buyers, an average selling price, and an estimate
of consumption or usage for a specific period of time. Once this information has
been collected, it can be plugged into the following formula to derive the estimated
market potential.
Estimating Market Potential: Where:
MP = market potential
N = number of possible buyers
P = average selling price
Q = average annual consumption
However, the better the information that is being plugged into the formula, the
better the estimate of the market potential. The variables in the above formula will
be described in more detail as well as more specific information on the types of
information required will be provided later.
Estimating Retail Market Potential
When projecting a market’s potential for your product, there is no single
method for success. Competition, local income levels, product and store image,
location, pricing, traffic flow, population density and other factors are used to gauge
the success or failure of a new retail outlet. Even differences in product lines sold
within a given store can impact the number of customers and how they’ll travel to
shop.
These texts were taken, for pedagogical purposes, from Estimating Retail Market
Potential. Available at: http://www.enext.maine.edu/.
Questions:
a. - What is a potential market?
b. - What does “estimating the market potential” mean?
c. - What are you supposed to do after estimating the market potential?
d. - What do you understand by retail outlet?
D) Give your opinion: Importance of estimating the market before venturing
overseas.
E) Solve the puzzle using the vocabulary learned along this unit.
The Market
Across
5. The ______ of the market refers to the number of buyers or sellers in a particular place.
7. The quality of affording gain or benefit.
9. You could aggregate prospective buyers into groups or _______.
10. A _______ is a type of company that allows you to have access to its business's
proprietary knowledge, processes and trademarks.
Down
1. Expenditure during a particular period of goods and services.
2. Annual sales volume or volume or value of shares traded on a stock exchange.
3. When the demand for a good or service moves significantly up or down in response to lower or
higher prices it is called price _________ market.
4. Companies that work together for parts of their business where they do not believe they have
competitive advantage and where they believe they can share common costs.
6. “Find your _______” - Determine which clients suit you and build your business around them.
8. Market _______ use a wide variety of techniques for researching and making recommendations.