CHAPTER 5: Category Attractiveness Analysis PRODUCT MANAGEMENT CHAPTER 5: Category Attractiveness Analysis

LEARNING OBJECTIVES: After studying this chapter, you should be able to: Understand the basic concept of category analysis Understand what are the aggregate market factors Identify the category factors Classify the environmental factors

CHAPTER OUTLINE Overview of the category attractiveness analysis Aggregate market factors Category factors Environmental factors

Overview Product managers must ask whether category of interest is sufficiently attractive Often characterized as ‘industry’ or ‘market’ analysis Characteristics of product category rarely point to the same direction

Aggregate Market Factors Category size Market growth Product life cycle Sales cyclicity Seasonality Profits

Category factors Based on Porter’s five forces: Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Amount of intra-category rivalry Threat of substitute products

Environmental Analysis Technological factors Political factors Economic factors Regulatory factors Social factors

THANK YOU