Market Analysis Chapter 6

Vocabulary Words we’ve already discussed Industry Value chain Market Target Market “-graphics” Historical research* New major words Carrying capacity Market segmentation Exploratory research Focus Group Descriptive research Secondary/Primary data

Market Analysis Assess chances of success within industry against value chains Industry Carrying capacity: way to understand the industry’s ability to support new growth. Burger joints in Ridgewood, maybe, Pizza, probably not Uncertainty Degree of stability or instability of industry Would you still make typewriters today?

Industry Assessment Complexity How many different contacts will you need to product your good or service? Bakeries may be able to buy flour and sugar in mass from producers. Grocery stores deal with dozens upon dozens of manufactures to get their materials Stage of Life Cycle Getting in on ground floor before market begins to turn. Getting in on the CD is dumb at this point… Getting in on tablets may have more long term growth.

Target Market Activity 6.1 (pgs 66-67) What it takes to be considered “in the market” Target Market Market segmentation Putting people into smaller subgroups that have more specific marketability. Must be measureable Large enough to profit Needs to be reachable Indication of responsiveness See all “-graphics”

Conducting Market Research Market Research The collection and analysis of information aimed at understanding the behavior of consumers in certain market Exploratory research When you know little on industry, seeking information through government or industrial publications Focus group Descriptive research Form customer profile (see 6.1) Historical research

Starting Research Process Open Text to pg 136 Identify Your Informational Needs Obtain Secondary Resources Collect Primary Data Organize the Data Analyze the Data

Research the Industry Trends? South Beach diet impacted the sales of food with carbs Barriers to Entry Is your business too expensive/need too much capital to begin from scratch? Economies of scale Would you be better of producing a specific good to find your niche market (see Sony moving to game production) Brand Loyalty People love their Apple iAnythings, difficult to break bond

Other Outside Forces Sources of Supply Will you have access to affordable sources of raw materials? Buyer’s Ability to Bargain While Home Depot may offer lower prices that small business can not compete with, now can small business survive? Knowledge. Technology Can you make yourself more efficient?

Where you fit in Market Share Niche market Dentists for root canals Shoe repairs Rare foods (quail eggs) Market positioning Act of identifying a specific market niche for good/service Competitive Advantage Feature/benefit that makes your product more desirable than competitors

Creating a Customer Profile Who are my customers? Demographics/Geographics What do they generally buy? How can I relate to them more? Why do they buy it? Psychographics How often do they buy? How can my product/service fill their needs/wants?