Download Market Assessment for Small Businesses

Market Assessment for
Small Businesses
Prof. Sudipto Bhattacharya
School of Management Sciences
Bengal Engineering and Science University, Shibpur
[email protected]
Lecture Contents
Marketing Mix/ Demand/ Demand Estimation
Sampling Plan/ Data Collection and Analysis
Market Survey – key components and problems
Marketing Mix
Who could be your customers?
Target market
Which types of products will you offer, e.g. only
ceiling fans and table fans or ceiling fans, table fans
and wall fans?
Product Mix
What will be design and the look of the fans: 3 or 4
wings, 23” or 36” blade or both?
Product features
Will you reach the customers through wholesalers
or retailers?
Distribution channel
How much will you charge the customers?
Pricing decision
How will your customers know that your product is
in the market? How do you influence him to buy
your product?
Promoting the
product
Demand/ Demand Estimation
Market Demand for a product/service is expressed as the total
volume of the product/service that would be bought by a
defined customer group in a defined geographical area
over a defined time period in a defined marketing
environment under a defined marketing program.
Use of Demand Estimates
Analysis of Market Opportunities
Planning of Market Efforts
Control of Marketing Performance
Assessment of Market
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Know about profit possibility
Design a product well
Have a right brand name
Decide right price
Employ right people
Buy specific raw material
Establish required distribution system
Have effective advertising and promotion
Have right packaging for different quantities
Have short and long term planning
Have profitable finance policy
Decide about future expansion
Have right equipment and tools
Decide about product life and precautions
Components of Demand Estimates
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Product – its usage and users
Total volume – physical or rupee or both
Bought – market measure: volume ordered, shipped, paid
for, received or consumed
Customer group – whole market or any particular segment
Geographical area – well-defined geographical boundaries
Time period – reference to a stated period of time
Marketing environment – macro (PESTLE) & micro factors
Sampling Plan
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Who is to be surveyed? Sample Unit
How many to be surveyed and how to select them? Sample Size
(depends on the product and target group)
How should the respondents be chosen? Sampling procedure
(I) Random Sample
(II) Stratified or Quota Sample
(III) Cluster Sample
(IV) Systematic Sample (serial/patterned/chain sampling)
Data Collection & Analysis –affecting factors
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A respondent might not be available
Some respondents may refuse to answer
Some respondents may be biased
Interviewers may be biased
Interviewers may write their own answers
to save their labor
Data Collection
General business or economic forecasting
Studies on
Influences of
Uncontrollable
Economic factors affecting the sales volume and
opportunities (e.g. level of consumer credit, business
expansion plans)
Shifts in the nature of the market
Motivational research (e.g. consumer & consumer buying
motives)
Competitive position of company products
Comparative studies of competitive products
Studies on
Competitive
Situation
Evaluation of new competitive products or development of
new competitive products
Price policies, discount structures, etc. of competitors
Advertising & Selling practices of competitors
Data Collection
Determination of consumer or consumer acceptance of
proposed new products or services
Establishment or revision of sales territories
Evaluation of existing sales method
Analysis of salesmen’s activities
Studies on
Influences of
Controllable
Appraisals of proposed changes in sales method
Price studies
Exploring or determining new uses of existing products
Product simplification or completeness of a product line
Studying distribution costs, setting sales quotas
Development of Standards of sales performance
Sales compensation, evaluation, review or revision
Advertising effectiveness, Selection of advertising media
Packaging research, Effectiveness of promotional devices
Data Collection
Analysis of market size (for specific products)
Studies of
Focusing on
Market
Measurement
and Planning
Estimate demand for new/proposed new products
Sales forecasting for the industry or company
Analysis of market characteristics for specific products
Analysis of territorial potential or sales opportunities
Studies of trends in market size of products
Measurement of territorial variations in sales
Studies of relative profitability of different markets
Market test or test-market operations on new or
improved products
Studies of changes in the importance of different types
of customers
Data Analysis
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Use Scientific Methods
Use Creativity & imagination to have a right
picture of the market
Use multiple methodology to double check
the result & avoid errors
Relate the cost of information to its value
in the project
If required, use model building (tables,
graphs, etc.) Mathematical models can be
helpful for understanding information
Market Survey – Key components
Introduction End Products, End users, Suitability & Strength of selecting a
particular product
Product
Specifications, Sized, Brands, Packing, Selling Price, etc.
Assessment
of Demand
Class & Type of consumers, PLC & present status, Demand Past pattern & Future projections, Consumption Patterns &
Purchase frequency, Buying criteria & influencing factors
Supply
Position
Current availability & production capacity vs. utilization,
present indigenous & imported supply, price comparisons
Marketing
Practices
Prevailing marketing practices – distribution, delivery & faster
sales service, credit policy, packing/forwarding, taxation &
commission, Purchasing procedures, lead time
Marketing
Plans &
Strategies
Own market share of supply-demand gap, Strength & special
services to be offered, Possible clientele & likelihood of their
buying from you
Market Survey – Problems
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Language problem
Lack of interest of the respondent
Inability to understand a question
Bias for the interviewer or product or company
Status problem in giving the right answer
A respondent may not feel safe in giving the right
answer
A respondent may not give right answer related to
opposite sex