1. Market Analysis

2. Background
Marketing plans can’t but put together without some form of analysis
How do I match my company’s assets with good business opportunities?
Possibilities = markets
market analysis:
finding and measuring business opportunities
targeting and dividing market into niches
suggesting product placement and position in mind of consumer

3. Market Analysis
marketing requires a great deal of information about consumer needs
marketing research gives the marketing manager data needed to make decisions
required because managers are often hundreds or thousands of miles distant from end users
market analysis is the only way firms can stay in touch with customers and their needs

4. Discovering Opportunities
most large firms are moving away from “mass” marketing to “target” marketing
mass marketing = production approach of looking at what most consumers want, assumes actions of all consumers are equal
mass marketing = mass production (low-cost, effective, easy), disposal of production
problem: always leaves someone unhappy

5. Discovering Opportunities
target marketing: consumer needs set the product characteristics and marketing programs
production efforts change to meet needs of targeted groups of consumers
example: you grow grouper, but find out that processers want a variety of different sizes, species. You then become flexible to meet their needs (same holds true for processors, their market)
special needs = more sales, higher sales prices

6. Discovering Opportunities
target marketing more costs, difficult to manage, but profitable to producer and pleasing to customer
goal: market edge because you offer what others can’t
from the market analysis standpoint, a market is: group of current or possible consumers with similar unmet needs and buying power
defined in terms of consumer needs and not the product being sold!

7. Discovering Opportunities
problem: consumer needs change slowly, products come and go
example: old-style TV dinners vs microwaveable grouper Florentine
problem: can’t please everyone on a global basis  think regionally or locally!
target marketing recognizes differences in needs: for seafood, there are well-defined regional likes and dislikes
how can you possibly fill all the different needs in a profitable manner (you can’t)

8. Consumer Demographics
within a defined area, the needs of consumers are often found to be similar
that is, after having divided them into groups according to common descriptions (e.g., age, sex, household size, level of income, level of education, marriage status)
demographics: dividing consumers into groups for easy identification
helps establish more specific consumer needs
information easily obtain for smaller vs. larger areas

9. Consumer Demographics
by tying consumer needs to demographic info it is possible to find special groups of consumers w/special needs (i.e., the target)
research begins with listing consumer needs, advantages, benefits sought, likes, dislikes
must be fairly specific, but not related to a currently-existing product (e.g., flavor vs. texture)
Group 1
flavor (sweet to bitter)
Group 2
Group 3
texture (soft to tough)
mass marketing would target dashed circle

10. Consumer Demographics
The previous example indicates that three separate products might be required
products must be significantly different
large enough potential customers in each group
customers must be reached by promotion
needs must be long-lasting to make it worthwhile
This determines your ability to segment a market

11. Segmentation Marketing
select the product and market area
determine all the needs that future customers might have in the product and market area
form at least three different market segments
find out what characteristics of the product of the product affect the “buy” decision of the consumer
give a name to each product market segment
describe each segment with demographic and other possible consumer-related information

12. Determination of Marketing Goals
After segments have been established, match these results to your marketing goals
what are your goals wrt this (these) product(s)(i.e., promotion or penetration)
product development: new or improved version (microwaveable vs. frozen block)
market development: motivating people to buy the product (healthy vs. saturated fats)
product diversification: adding products to the product line (4 oz. fillets in garlic/lemon or Cajun spice)

13. Determination of Marketing Goals
One way to study the market and marketing goals is to look at the chances or possibilities for market growth and projected market share
identifies the best and worst products a firm has to offer
Goal: blend of “stars” and “cash cows” 20
Question Marks
Stars
Annual Market Growth Rate (%) 10
Cash cows
Dogs 10 1
0.1
Market Dominance
Source: Seperich et al., 1994

14. Estimation of Market Potential
There are several methods of guessing or estimating possibilities in a market
market possibilities: total number of sales possible in a target market for all producers
sales forecast: level of sales expected for a single firm within the target market
market share: percentage of total sales gained by a single firm (SF/MP)

15. Estimation of Market Potential
Step 1: determine market potential
Methods: factor approach vs. demographics
Factor approach: uses a series of factors to discover the size of possible market sales for a specific product to achieve the sales forecast
requires gathering information about product usage and consumers

16. Example of Forecast Approach
presents sales as a percentage of some easily-obtained industry statistic (e.g., gross domestic product, retail sales)
then estimates the firm’s proportion of total industry sales, work your way down:
GDP = $3 trillion
total retail sales of food is 15% of GDP ($3 trillion x 0.15 = $450 billion
supermarkets (retailers) that buy seafood sell 12% of national retail food sales ($450 billion x 0.12 = $54 billion)
0.5% of their sales are as seafood ($54 billion x = $270 million
15% of this is as grouper ($270 M x 0.15) = $41 million

17. Another Way: demographics or consumer-side forecast
if demographics show that people who would buy “glow-in-the-dark” grouper are: highly educated, men, have high incomes, live in cities, live in the SW portion of the U.S. and are between 45 and 60 years old; you can estimate size of the market:
population of the U.S. = 290 million
% males is 50% = 145 million
% urban is 40% = 58 million
% in SW is 20% = 11.6 million
% educated is 25% = 2.9 million
% with high income is 25% = 725,000
% yrs of age is 10% = 72,500

18. Another Way: demographics or consumer-side forecast
Result: 72,500 customers would buy “glow-in-the-dark” grouper
If each consumes two pounds of grouper per month = 24 lbs/yr/customer x 72,500 customers = 1.75 million lbs
If your market research via interviews indicates 20% customers would become regular consumers of GITD grouper, your sales forecast for the first year is 350,000 lbs of GITD
At $10/lb, your sales forecast in $ is $3.5 million

19. For next time...
SEAFOOD MARKETING