Market Research and Advertising - PowerPoint PPT Presentation


Title: Market Research and Advertising


1
Market Research and Advertising
  • Home-Based/Micro Business Workshop
  • Kent Wolfe
  • September 3rd, 2002

2
First Step Market Research
  • WHY?
  • It is easier to sell something people want than
    it is to sell something that is easy to produce

3
Market Research
  • Exposed to market research each and every day (TV
    Radio programming, cell phone packages,
    beverage products, shelf space, restaurant
    location).
  • Used to determine customer perceptions, attitudes
    and preferences (i.e., Georgia Grown, war with
    Iraq, package or container size)
  • Who uses what, when, how much, and what are they
    willing to pay

4
Questions Market Research Can Answer
5
Types of Market Research
  • Focus groups
  • Taste tests
  • in-depth interviews
  • Surveys - mail, telephone and intercept

6
Focus Groups
  • Six to nine users.
  • Discuss issues and concerns about product or
    service.
  • Focus groups often bring out users' spontaneous
    reactions and ideas
  • Let you observe some group dynamics and
    organizational issues
  • The group typically lasts about two hours
  • Run by a moderator who maintains the group's
    focus.
  • First step in market research.
  • Powerful tool in system development, you
    shouldn't use them as your only source of
    usability data

7
In-depth Interviews
  • An in-depth interview is a conversation with an
    individual conducted by trained staff that
    usually collects specific information about one
    person
  • Provide a history of behavior. When conducted
    more than once or when conducted with someone who
    has been in the community for a long time,
    interviews can show if any change has occurred
    over time.
  • Highlight individual versus group concerns.
    Topics that may not arise in a group situation
    can be addressed in individual interviews.
  • Reveal divergent experiences and outlier
    attitudes. Groups often do not allow you to see
    that experiences may vary person to person.
  • Provide a shortcut to community norms.
    Interviewing key community leaders (bartenders,
    favorite teachers, police officers, sex club
    managers) can give a fast overview of a community
    and its needs and concerns.
  • Develop other research tools. Results from an
    interview can be used to generate focus group
    questions or help form questions for a
    survey.In-depth interviews can be different from
    focus groups in several ways
  • Easier. It is often easier to speak to one person
    and keep her attention than to address a group.
    You can also avoid major scheduling hassles with
    only one person.
  • More detailed. In an interview you have a chance
    to follow-up on questions and probe for meaning.

Source Good Questions, Better Answers
8
Surveys - mail, telephone and intercept
  • a method of gathering information from a sample
    of individuals
  • Mail - low in cost, problems with low response
    rate, most effective when directed at particular
    groups
  • Telephone - efficient for collecting large
    amounts of data quickly and when the length of
    the survey is limited.
  • In-person - more expensive, necessary when
    complex information is to be collected.

9
Telephone Survey Example- Fish
  • 53 eat fish once a week or more often
  • Roughly 19 purchase fresh fish weekly
  • The households eat roughly 4.0 pounds of fresh
    fish per month
  • Aided awareness of all species except tilapia was
    high (gt80 and 44, respectively)
  • One-quarter to one-third of respondents would be
    likely to purchase the various species (large
    mouth bass, perch, striped bass, prawn, and
    flounder) excluding tilapia and eel which was
    significantly lower (12).
  • Sixty percent or more of the respondents have
    eaten the various species (large mouth bass,
    perch, striped bass, prawn, and flounder), again
    excluding eel and tilapia where the number is
    significantly lower (20 and 34, respectively).
  • 42 would purchase live, unprocessed fish from a
    local fish market
  • Respondents would travel approximately 27 miles
    to a local fish farm

10
Center Examples of Research Results
  • Aquaculture people would drive 30 miles to
    purchase fresh water shrimp from pond bank
  • Trail riders take 8 trips annually
  • Georgians consume 2.1 pounds of honey every year
  • Specialty food buyers are generally older and
    affluent
  • Sod producers are very interested in pelletized
    poultry litter as a fertilizer/soil builder

11
Additional Market Research Uses
  • Market research guides your communication with
    current and potential customers
  • Market research helps you identify opportunities
    in the marketplace.
  • Market research minimizes the risk of doing
    business.

12
New Agribusiness Opportunities First Step is ID
Target Market
  • Target Market A segment of the population that
    is most likely to use your product or service.
  • Usually described using demographic variables
    like, Gender, Income, Race, Age
  • Used to
  • Determine market potential
  • Develop product packaging
  • Choose marketing channels
  • Develop marketing mix and advertising strategy

13
Who is your Target Market?
14
(No Transcript)
15
Target Market Examples
16
Market Potential
  • Market Potential the maximum sales
    opportunities achieved by all sellers in the
    market.
  • Sets the upper limit on consumption units

17
Estimating Market Potential
  • MPNxQ where
  • MP Market Potential
  • N number of buyers (Target Market)
  • Q average number purchased by each buyer

18
Market Segmentation
  • A 1995 National Pork Producers Council study
    identified five very different pork consumer
    segments and they are as follows
  • Main Street Today
  • Quality Carnivores
  • Good N Plenty Guys
  • Apathetic Eaters
  • Politically Correct Eaters

19
Market Segmentation
20
Main Street Today Segment
  • Main Street Today
  • Largest segment of the population
  • Consist of strong pork supporters.
  • Very price sensitive- cost conscious shoppers.
  • Purchasing decisions are price based rather than
    product preference.
  • Women (57)
  • Middle aged - (20) being 50-59 years of age
  • Lowest income 31,000 median household income
  • Least educated less than 10 have college
    degrees
  • Blue collar occupations
  • 19 widowed/divorced (more than the other
    five segments)
  • Average household size
  • Most non-white group (29 are African
    American or Hispanic)

21
Quality Carnivores Segment
  • Quality Carnivores
  • Generally males
  • Prefer family and fine dining restaurants
  • Not concerned with nutrition
  • Indulge in food and prefer premium cuts of meat
  • Males (77)
  • On average 36 years old
  • Not primary shopper
  • High incomes (48,500 household incomes)
  • Have some college (62) or a college degree
    (26)
  • Married (66)
  • On average is non-white
  • Smaller households

22
Good N Plenty Guys Segment
  • Good N Plenty Guys
  • frequent fast food and take-out restaurants
  • meat lovers
  • second most responsive to pork behind the Main
    Street Today segment.
  • Mainly male
  • Young (49 of the segment is under 35 years of
    age)
  • 38,000 median household income
  • 45 have some college
  • Employed- split between blue and white color
  • 61 were married
  • Have large households 47 have 4 family members
  • Primarily non-white

23
Market Potential
  • Market Potential the maximum sales
    opportunities achieved by all sellers in the
    market.
  • Sets the upper limit on consumption units

24
Estimating Market Potential
  • MPNxQ where
  • MP Market Potential
  • N number of buyers
  • Q average number purchased by each buyer

25
Estimating Market Potential
  • Information needed to estimate market potential
  • Market Area - US, State, County, city
  • Roadside stands 10-20 mile draw
  • School field trips 45 miles or 45 minutes
  • Demographic composition of the specified area
  • Number of people in area with similar
    characteristics
  • Consumption or usage levels

26
Estimating Market Share
  • A market area and the target market within that
    area will support a certain level of sales
  • A companies portion of these total sales is
    referred to as its market share
  • Estimating market share is not easy but essential

27
Three Steps to Estimating Market Share
  • Estimate the total market potential
  • Identify each of your competitors and estimate
    their market share
  • Decide or estimate what you think your market
    share might be or what portion of the market you
    intend to capture

28
Example Market Share Calculation
  • Market share for new hot sauce to be marketed
    locally
  • A supermarket visit identified 10 sauce
    competitors
  • Market share data is not available, assume each
    product captures and equal share of the market
    (10)

29
Example Market Share Calculation- Cont.
  • New product will mean there are 11 competing
    products
  • Assuming equal market share, you can assume to
    capture roughly 9.1 of the market
  • Does 9.1 of the market generate enough sales to
    make your business feasible?

30
Estimated Retail Sales
  • The potential retail sales for a specific retail
    operation can be estimated by using a standard
    formula
  • ES P x EXP x (ADI/MDI) x MS where
  • ES Estimated Sales
  • P Trade Area population
  • EXP Average expenditures for retail outlet
    category
  • ADI Area Estimated Average Household Disposable
    Income
  • MDI Georgia Average Household Disposable Income
  • MS Estimated Market Share

31
Estimated Retail Sales Example
  • 50 of Americans consume beer
  • Thirty-six percent of microbrew drinkers are 25
    -34, 27 are 34 - 45 and 20 are 45 and older.
  • Microbrew consumers have average incomes of
    54,000
  • Microbrew consumers spend between 250 annually
    on these products
  • Microbrewery Market Area Demographic Information
  • 50,000 residents
  • 15 are 25-34
  • 16 are 34-45
  • 29 are 45
  • 25 have incomes over 54,000

32
Income Information
  • Area Estimated Av.e Household Disposable
    In.67,000
  • Georgia Average Household Disposable Income
    30,240

33
Trade Area Sales Estimate
  • ES P x EXP x (ADI/MDI) x MS
  • P 50,000 x 50 (percentage of beer drinkers)
    25,000
  • 25,000 x 15 3,750
  • 25,000 x 16 4,000
  • 25,000 x 29 7,250
  • 15,000
  • 37 of area residents have incomes over 50K
  • 15,000 37 5,550
  • EXP250
  • (ADI/MDI)(67,000/30,240)
  • MS Estimated Market Share 10
  • ES 5,550 x 250 x (67,000/30,240) x 10
    307,416

34
Estimated Retail Sales(market potential)
  • The potential retail sales for a specific retail
    operation can be estimated by using a standard
    formula
  • ES P x EXP x (ADI/MDI) x MS where
  • ES Estimated Sales
  • P Trade Area population
  • EXP Average expenditures for retail outlet
    category
  • ADI Area Estimated Average Household Disposable
    Income
  • MDI Georgia Average Household Disposable Income
  • MS Estimated Market Share

35
Micro Brewery
  • Micro brewed consumers consume an average of 250
    worth of beer annually. 
  • Younger people were more likely to have tried a
    microbrew. Thirty-six percent of beer drinkers
    between the ages of 25 and 34 had tried a
    microbrew.
  • In contrast, 27 of beer drinkers between the
    ages 34 through 45 and 20 of those 45 and older
    had tried microbrews. 
  • The appeal of micro brewed beer was strongest
    among White beer drinkers were almost twice as
    likely as black Americans to try a microbrew.

36
Estimated Retail Sales Example
  • Specialty food shoppers spend between 500 and
    1,000
  • Condiments constitute 12 of specialty food
    purchases or a 128 annually per specialty food
    shopper
  • Area Estimated Average Household Disposable
    Income/Georgia Average Household Disposable
    Income (67,000/30,240)
  • MS Estimated Market Share 10
  • ES 83,616 x 128 x (67,000/30,240) x 10
    2,371,332

37
Easy Demographic Data (WWW.EASIDEMOGRAPHICS.COM)
  • Miles 20 15 10
  • Population 82,683 59,644 36,409
  • Households 31,974 22,806 13,773
  • White Population 77,003 56,126 34,497
  • Black Population 4,881 2,901 1,506
  • Asian Population 623 473
    307
  • Hispanic Population 719 518 275
  • Median Age 37.0 36.7
    36.4
  • Med. HH Inc.() 29,572 30226 32,214
  • Av. HH Inc. () 40,855 41,877 43,165

38
Demographic and Population Sources
  • Sources for Demographic Information
  • Chamber of Commerce
  • University (www.agecon.uga.edu/caed/)
  • www.georgia.stats.uga.edu
  • US Census Bureau (WWW.CENSUS.GOV)
  • Easy Demographics (WWW.EASIDEMOGRAPHICS.COM)

39
Consumption and Usage Data Sources
  • Sources for information on Consumption and usage
  • USDA per capita food consumption estimates
  • Trade Associations
  • Commodity Groups (e.g. Nation Pork Producers
    Association)
  • University Research

40
Marketing
  • There is no silver bullet or formula for
    success
  • Marketing is more like an art than a science

41
What Exactly Does That Mean?
  • The Company Name
  • Company Goals
  • Location
  • Pricing
  • Packaging
  • Promotional Activities
  • Advertising
  • Sales Techniques
  • Business Cards
  • Employee Uniforms

42
The Goal of Marketing
  • To present your products/services to the market
    in a way that makes them more attractive than the
    products/services of
  • your competitors.

43
(No Transcript)
44
Packaging Counts Important Aspect of Marketing
  • Have a beautiful product, including jar and label
  • Use expensive beautiful glass
  • Go to trade shows to show product as well as find
    out what the competition is doing
  • Make your product presentation count-90of the
    purchases of these niche products is based on
    product presentation.

45
Packaging
  • First Line of Promotion is Product Packaging and
    is your silent salesperson
  • Evaluate your target market and create a package
    that is consistent with their expectations- i,e.
    single jar or 3-pack,
  • Packaging should reflect a products desired
    personality (Tennessee Toe Jam)
  • Packaging Considerations (size, plastic glass,
    dressy)
  • Selling a 8 oz. Jar of Jelly for 6.95, it needs
    to be packaged accordingly

46
Packaging Examples
47
(No Transcript)
48
(No Transcript)
49
Hot Sauce Packaging Examples
6.95 (5 oz)
6.29 (5 oz)
7.59 (4 oz)
50
Jams and Jelly Packaging Examples
4.50 (16 oz)
5.25 (10 oz)
5.00 (9.9 oz)
51
(No Transcript)
52
Examples of Advertising Costs and Exposure
53
Additional Marketing Events
  • Public Relations - getting local, trade or
    national press write-ups about new products, or
    other company news.
  • Sponsorship - contributing towards the cost of an
    event or publication and getting your name and
    logo featured prominently in return.
  • Corporate hospitality - treating existing
    customers or prime prospects to a 'jolly' in the
    hope they will think kindly of you in future.
  • Conferences - speaking at conferences raises your
    profile considerably and provides a networking
    opportunity. In addition, it provides the
    opportunity to obtain a comprehensive attendee
    list, which may identifying likely new customers
    and potential competitors.
  • Exhibitions Go where people are shopping for
    new products, trade fairs. It is possible to pick
    up quite a bit of new business and a considerable
    number of new leads as people wander up to your
    stand.

mailerhttp//www.bcentral.co.uk/marketing/basics/
DirectMail.asp
54
Routes to reach the customer
  • After defining the sales pitch, it's time to
    decide the best way of communicating your message
    to your chosen target customer group.
  • How to communicate your message.
  • First define the market area, local, regional,
    national and/or international.
  • Determine the most effective means of
    communicating with your target market , keep
    your budget in mind. There a many marketing
    channels to reach customers, i.e., TV, radio,
    print media, online, direct mail, bill boards and
    poster campaigns. The combination you choose is
    called the marketing mix.

55
Key Attributes of a Good Customer Proposition
  • KISS Keep It Simple Stupid - don't expect
    customers to work hard to understand the material
  • Be Concise - deliver your message in as few words
    as possible
  • Clarity - deliver a single message that doesn't
    confuse
  • Consistency - make sure everyone in your team
    delivers the same message
  • Message - above all focus on benefits not
    features
  • mailerhttp//www.bcentral.co.uk/marketing/basics/
    DirectMail.asp

56
Direct Mail
  • Advantages
  • Demographic selection
  • Unlimited message length
  • Consistent reproduction
  • Direct response by order or coupon
  • Disadvantages
  • Expensive
  • Difficult to obtain pure mailing lists
  • Long lead time
  • Negative reaction to junk mail

57
Direct mail marketing guide
  • Use direct mail marketing to get your message
    straight to the right consumer in the right
    market. With this concise guide to direct mail.
  • Direct mail marketing can provide a tailored
    offering directly to your target market and
    group. However it only gives the best results
    when it's planned and implemented with care and
    dedication.

58
Designing Direct Mail Material
  • Direct Mailing Responses
  • Grab Their Attention - make them open it
  • Create Interest - make them read it
  • Create Desire - make them care about it
  • Get Action - make them do something about it
  • mailerhttp//www.bcentral.co.uk/marketing/basics/
    DirectMail.asp

59
Newspaper
  • Advantages
  • Broad mkt coverage
  • Immediate
  • Short lead time
  • Flexible ad size
  • Visibility of product
  • Color
  • Use of coupons
  • People believe what they read!
  • Disadvantages
  • Inconsistent reproduction
  • One day life span
  • Limited demographics
  • Lost in the Crowd
  • Lack of movement sound

60
Radio
  • Advantages
  • Demographic selection
  • High frequency
  • Immediate
  • Sound reinforcement
  • Quick flexibility
  • Disadvantages
  • Restrictive message length
  • Need for repetition
  • Short recall factor
  • Cluttered placement

61
Television
  • Advantages
  • Use of sight, sound, motion, color
  • Mass coverage
  • Immediate
  • Demographic selection
  • Disadvantages
  • Short exposure
  • Expensive production
  • Expensive to air
  • Cluttered placement
  • Viewing time drops as income increases

62
Outdoor
  • Advantages
  • Reaches large audience
  • Long-term exposure
  • Color graphics
  • Forms include billboards, posters, illuminated
    signs, moving vehicle signs, bench ads
  • Disadvantages
  • Limited message length
  • Expensive to produce place
  • Difficult to obtain the best locations
  • Legal restrictions for use

63
(No Transcript)
64
Conclusion
  • Understand both your customer and your product to
    help focus your efforts
  • Before you begin your marketing efforts you
    should consider what you are selling and exactly
    who you are marketing to.
  • When it comes to your customers, remember that
    only a proportion of the population is likely to
    purchase any product or service, so the more
    accurately you pitch your sales and marketing
    efforts to this group, the less your efforts will
    be wasted. As a result, targeting and
    segmentation are designed to use the right sales
    message for each potential purchaser.
  • What ever you do, make sure you get 'the biggest
    bang for your buck.
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Market Research and Advertising

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Transcript and Presenter's Notes

Title: Market Research and Advertising


1
Market Research and Advertising
  • Home-Based/Micro Business Workshop
  • Kent Wolfe
  • September 3rd, 2002

2
First Step Market Research
  • WHY?
  • It is easier to sell something people want than
    it is to sell something that is easy to produce

3
Market Research
  • Exposed to market research each and every day (TV
    Radio programming, cell phone packages,
    beverage products, shelf space, restaurant
    location).
  • Used to determine customer perceptions, attitudes
    and preferences (i.e., Georgia Grown, war with
    Iraq, package or container size)
  • Who uses what, when, how much, and what are they
    willing to pay

4
Questions Market Research Can Answer
5
Types of Market Research
  • Focus groups
  • Taste tests
  • in-depth interviews
  • Surveys - mail, telephone and intercept

6
Focus Groups
  • Six to nine users.
  • Discuss issues and concerns about product or
    service.
  • Focus groups often bring out users' spontaneous
    reactions and ideas
  • Let you observe some group dynamics and
    organizational issues
  • The group typically lasts about two hours
  • Run by a moderator who maintains the group's
    focus.
  • First step in market research.
  • Powerful tool in system development, you
    shouldn't use them as your only source of
    usability data

7
In-depth Interviews
  • An in-depth interview is a conversation with an
    individual conducted by trained staff that
    usually collects specific information about one
    person
  • Provide a history of behavior. When conducted
    more than once or when conducted with someone who
    has been in the community for a long time,
    interviews can show if any change has occurred
    over time.
  • Highlight individual versus group concerns.
    Topics that may not arise in a group situation
    can be addressed in individual interviews.
  • Reveal divergent experiences and outlier
    attitudes. Groups often do not allow you to see
    that experiences may vary person to person.
  • Provide a shortcut to community norms.
    Interviewing key community leaders (bartenders,
    favorite teachers, police officers, sex club
    managers) can give a fast overview of a community
    and its needs and concerns.
  • Develop other research tools. Results from an
    interview can be used to generate focus group
    questions or help form questions for a
    survey.In-depth interviews can be different from
    focus groups in several ways
  • Easier. It is often easier to speak to one person
    and keep her attention than to address a group.
    You can also avoid major scheduling hassles with
    only one person.
  • More detailed. In an interview you have a chance
    to follow-up on questions and probe for meaning.

Source Good Questions, Better Answers
8
Surveys - mail, telephone and intercept
  • a method of gathering information from a sample
    of individuals
  • Mail - low in cost, problems with low response
    rate, most effective when directed at particular
    groups
  • Telephone - efficient for collecting large
    amounts of data quickly and when the length of
    the survey is limited.
  • In-person - more expensive, necessary when
    complex information is to be collected.

9
Telephone Survey Example- Fish
  • 53 eat fish once a week or more often
  • Roughly 19 purchase fresh fish weekly
  • The households eat roughly 4.0 pounds of fresh
    fish per month
  • Aided awareness of all species except tilapia was
    high (gt80 and 44, respectively)
  • One-quarter to one-third of respondents would be
    likely to purchase the various species (large
    mouth bass, perch, striped bass, prawn, and
    flounder) excluding tilapia and eel which was
    significantly lower (12).
  • Sixty percent or more of the respondents have
    eaten the various species (large mouth bass,
    perch, striped bass, prawn, and flounder), again
    excluding eel and tilapia where the number is
    significantly lower (20 and 34, respectively).
  • 42 would purchase live, unprocessed fish from a
    local fish market
  • Respondents would travel approximately 27 miles
    to a local fish farm

10
Center Examples of Research Results
  • Aquaculture people would drive 30 miles to
    purchase fresh water shrimp from pond bank
  • Trail riders take 8 trips annually
  • Georgians consume 2.1 pounds of honey every year
  • Specialty food buyers are generally older and
    affluent
  • Sod producers are very interested in pelletized
    poultry litter as a fertilizer/soil builder

11
Additional Market Research Uses
  • Market research guides your communication with
    current and potential customers
  • Market research helps you identify opportunities
    in the marketplace.
  • Market research minimizes the risk of doing
    business.

12
New Agribusiness Opportunities First Step is ID
Target Market
  • Target Market A segment of the population that
    is most likely to use your product or service.
  • Usually described using demographic variables
    like, Gender, Income, Race, Age
  • Used to
  • Determine market potential
  • Develop product packaging
  • Choose marketing channels
  • Develop marketing mix and advertising strategy

13
Who is your Target Market?
14
(No Transcript)
15
Target Market Examples
16
Market Potential
  • Market Potential the maximum sales
    opportunities achieved by all sellers in the
    market.
  • Sets the upper limit on consumption units

17
Estimating Market Potential
  • MPNxQ where
  • MP Market Potential
  • N number of buyers (Target Market)
  • Q average number purchased by each buyer

18
Market Segmentation
  • A 1995 National Pork Producers Council study
    identified five very different pork consumer
    segments and they are as follows
  • Main Street Today
  • Quality Carnivores
  • Good N Plenty Guys
  • Apathetic Eaters
  • Politically Correct Eaters

19
Market Segmentation
20
Main Street Today Segment
  • Main Street Today
  • Largest segment of the population
  • Consist of strong pork supporters.
  • Very price sensitive- cost conscious shoppers.
  • Purchasing decisions are price based rather than
    product preference.
  • Women (57)
  • Middle aged - (20) being 50-59 years of age
  • Lowest income 31,000 median household income
  • Least educated less than 10 have college
    degrees
  • Blue collar occupations
  • 19 widowed/divorced (more than the other
    five segments)
  • Average household size
  • Most non-white group (29 are African
    American or Hispanic)

21
Quality Carnivores Segment
  • Quality Carnivores
  • Generally males
  • Prefer family and fine dining restaurants
  • Not concerned with nutrition
  • Indulge in food and prefer premium cuts of meat
  • Males (77)
  • On average 36 years old
  • Not primary shopper
  • High incomes (48,500 household incomes)
  • Have some college (62) or a college degree
    (26)
  • Married (66)
  • On average is non-white
  • Smaller households

22
Good N Plenty Guys Segment
  • Good N Plenty Guys
  • frequent fast food and take-out restaurants
  • meat lovers
  • second most responsive to pork behind the Main
    Street Today segment.
  • Mainly male
  • Young (49 of the segment is under 35 years of
    age)
  • 38,000 median household income
  • 45 have some college
  • Employed- split between blue and white color
  • 61 were married
  • Have large households 47 have 4 family members
  • Primarily non-white

23
Market Potential
  • Market Potential the maximum sales
    opportunities achieved by all sellers in the
    market.
  • Sets the upper limit on consumption units

24
Estimating Market Potential
  • MPNxQ where
  • MP Market Potential
  • N number of buyers
  • Q average number purchased by each buyer

25
Estimating Market Potential
  • Information needed to estimate market potential
  • Market Area - US, State, County, city
  • Roadside stands 10-20 mile draw
  • School field trips 45 miles or 45 minutes
  • Demographic composition of the specified area
  • Number of people in area with similar
    characteristics
  • Consumption or usage levels

26
Estimating Market Share
  • A market area and the target market within that
    area will support a certain level of sales
  • A companies portion of these total sales is
    referred to as its market share
  • Estimating market share is not easy but essential

27
Three Steps to Estimating Market Share
  • Estimate the total market potential
  • Identify each of your competitors and estimate
    their market share
  • Decide or estimate what you think your market
    share might be or what portion of the market you
    intend to capture

28
Example Market Share Calculation
  • Market share for new hot sauce to be marketed
    locally
  • A supermarket visit identified 10 sauce
    competitors
  • Market share data is not available, assume each
    product captures and equal share of the market
    (10)

29
Example Market Share Calculation- Cont.
  • New product will mean there are 11 competing
    products
  • Assuming equal market share, you can assume to
    capture roughly 9.1 of the market
  • Does 9.1 of the market generate enough sales to
    make your business feasible?

30
Estimated Retail Sales
  • The potential retail sales for a specific retail
    operation can be estimated by using a standard
    formula
  • ES P x EXP x (ADI/MDI) x MS where
  • ES Estimated Sales
  • P Trade Area population
  • EXP Average expenditures for retail outlet
    category
  • ADI Area Estimated Average Household Disposable
    Income
  • MDI Georgia Average Household Disposable Income
  • MS Estimated Market Share

31
Estimated Retail Sales Example
  • 50 of Americans consume beer
  • Thirty-six percent of microbrew drinkers are 25
    -34, 27 are 34 - 45 and 20 are 45 and older.
  • Microbrew consumers have average incomes of
    54,000
  • Microbrew consumers spend between 250 annually
    on these products
  • Microbrewery Market Area Demographic Information
  • 50,000 residents
  • 15 are 25-34
  • 16 are 34-45
  • 29 are 45
  • 25 have incomes over 54,000

32
Income Information
  • Area Estimated Av.e Household Disposable
    In.67,000
  • Georgia Average Household Disposable Income
    30,240

33
Trade Area Sales Estimate
  • ES P x EXP x (ADI/MDI) x MS
  • P 50,000 x 50 (percentage of beer drinkers)
    25,000
  • 25,000 x 15 3,750
  • 25,000 x 16 4,000
  • 25,000 x 29 7,250
  • 15,000
  • 37 of area residents have incomes over 50K
  • 15,000 37 5,550
  • EXP250
  • (ADI/MDI)(67,000/30,240)
  • MS Estimated Market Share 10
  • ES 5,550 x 250 x (67,000/30,240) x 10
    307,416

34
Estimated Retail Sales(market potential)
  • The potential retail sales for a specific retail
    operation can be estimated by using a standard
    formula
  • ES P x EXP x (ADI/MDI) x MS where
  • ES Estimated Sales
  • P Trade Area population
  • EXP Average expenditures for retail outlet
    category
  • ADI Area Estimated Average Household Disposable
    Income
  • MDI Georgia Average Household Disposable Income
  • MS Estimated Market Share

35
Micro Brewery
  • Micro brewed consumers consume an average of 250
    worth of beer annually. 
  • Younger people were more likely to have tried a
    microbrew. Thirty-six percent of beer drinkers
    between the ages of 25 and 34 had tried a
    microbrew.
  • In contrast, 27 of beer drinkers between the
    ages 34 through 45 and 20 of those 45 and older
    had tried microbrews. 
  • The appeal of micro brewed beer was strongest
    among White beer drinkers were almost twice as
    likely as black Americans to try a microbrew.

36
Estimated Retail Sales Example
  • Specialty food shoppers spend between 500 and
    1,000
  • Condiments constitute 12 of specialty food
    purchases or a 128 annually per specialty food
    shopper
  • Area Estimated Average Household Disposable
    Income/Georgia Average Household Disposable
    Income (67,000/30,240)
  • MS Estimated Market Share 10
  • ES 83,616 x 128 x (67,000/30,240) x 10
    2,371,332

37
Easy Demographic Data (WWW.EASIDEMOGRAPHICS.COM)
  • Miles 20 15 10
  • Population 82,683 59,644 36,409
  • Households 31,974 22,806 13,773
  • White Population 77,003 56,126 34,497
  • Black Population 4,881 2,901 1,506
  • Asian Population 623 473
    307
  • Hispanic Population 719 518 275
  • Median Age 37.0 36.7
    36.4
  • Med. HH Inc.() 29,572 30226 32,214
  • Av. HH Inc. () 40,855 41,877 43,165

38
Demographic and Population Sources
  • Sources for Demographic Information
  • Chamber of Commerce
  • University (www.agecon.uga.edu/caed/)
  • www.georgia.stats.uga.edu
  • US Census Bureau (WWW.CENSUS.GOV)
  • Easy Demographics (WWW.EASIDEMOGRAPHICS.COM)

39
Consumption and Usage Data Sources
  • Sources for information on Consumption and usage
  • USDA per capita food consumption estimates
  • Trade Associations
  • Commodity Groups (e.g. Nation Pork Producers
    Association)
  • University Research

40
Marketing
  • There is no silver bullet or formula for
    success
  • Marketing is more like an art than a science

41
What Exactly Does That Mean?
  • The Company Name
  • Company Goals
  • Location
  • Pricing
  • Packaging
  • Promotional Activities
  • Advertising
  • Sales Techniques
  • Business Cards
  • Employee Uniforms

42
The Goal of Marketing
  • To present your products/services to the market
    in a way that makes them more attractive than the
    products/services of
  • your competitors.

43
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44
Packaging Counts Important Aspect of Marketing
  • Have a beautiful product, including jar and label
  • Use expensive beautiful glass
  • Go to trade shows to show product as well as find
    out what the competition is doing
  • Make your product presentation count-90of the
    purchases of these niche products is based on
    product presentation.

45
Packaging
  • First Line of Promotion is Product Packaging and
    is your silent salesperson
  • Evaluate your target market and create a package
    that is consistent with their expectations- i,e.
    single jar or 3-pack,
  • Packaging should reflect a products desired
    personality (Tennessee Toe Jam)
  • Packaging Considerations (size, plastic glass,
    dressy)
  • Selling a 8 oz. Jar of Jelly for 6.95, it needs
    to be packaged accordingly

46
Packaging Examples
47
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49
Hot Sauce Packaging Examples
6.95 (5 oz)
6.29 (5 oz)
7.59 (4 oz)
50
Jams and Jelly Packaging Examples
4.50 (16 oz)
5.25 (10 oz)
5.00 (9.9 oz)
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Examples of Advertising Costs and Exposure
53
Additional Marketing Events
  • Public Relations - getting local, trade or
    national press write-ups about new products, or
    other company news.
  • Sponsorship - contributing towards the cost of an
    event or publication and getting your name and
    logo featured prominently in return.
  • Corporate hospitality - treating existing
    customers or prime prospects to a 'jolly' in the
    hope they will think kindly of you in future.
  • Conferences - speaking at conferences raises your
    profile considerably and provides a networking
    opportunity. In addition, it provides the
    opportunity to obtain a comprehensive attendee
    list, which may identifying likely new customers
    and potential competitors.
  • Exhibitions Go where people are shopping for
    new products, trade fairs. It is possible to pick
    up quite a bit of new business and a considerable
    number of new leads as people wander up to your
    stand.

mailerhttp//www.bcentral.co.uk/marketing/basics/
DirectMail.asp
54
Routes to reach the customer
  • After defining the sales pitch, it's time to
    decide the best way of communicating your message
    to your chosen target customer group.
  • How to communicate your message.
  • First define the market area, local, regional,
    national and/or international.
  • Determine the most effective means of
    communicating with your target market , keep
    your budget in mind. There a many marketing
    channels to reach customers, i.e., TV, radio,
    print media, online, direct mail, bill boards and
    poster campaigns. The combination you choose is
    called the marketing mix.

55
Key Attributes of a Good Customer Proposition
  • KISS Keep It Simple Stupid - don't expect
    customers to work hard to understand the material
  • Be Concise - deliver your message in as few words
    as possible
  • Clarity - deliver a single message that doesn't
    confuse
  • Consistency - make sure everyone in your team
    delivers the same message
  • Message - above all focus on benefits not
    features
  • mailerhttp//www.bcentral.co.uk/marketing/basics/
    DirectMail.asp

56
Direct Mail
  • Advantages
  • Demographic selection
  • Unlimited message length
  • Consistent reproduction
  • Direct response by order or coupon
  • Disadvantages
  • Expensive
  • Difficult to obtain pure mailing lists
  • Long lead time
  • Negative reaction to junk mail

57
Direct mail marketing guide
  • Use direct mail marketing to get your message
    straight to the right consumer in the right
    market. With this concise guide to direct mail.
  • Direct mail marketing can provide a tailored
    offering directly to your target market and
    group. However it only gives the best results
    when it's planned and implemented with care and
    dedication.

58
Designing Direct Mail Material
  • Direct Mailing Responses
  • Grab Their Attention - make them open it
  • Create Interest - make them read it
  • Create Desire - make them care about it
  • Get Action - make them do something about it
  • mailerhttp//www.bcentral.co.uk/marketing/basics/
    DirectMail.asp

59
Newspaper
  • Advantages
  • Broad mkt coverage
  • Immediate
  • Short lead time
  • Flexible ad size
  • Visibility of product
  • Color
  • Use of coupons
  • People believe what they read!
  • Disadvantages
  • Inconsistent reproduction
  • One day life span
  • Limited demographics
  • Lost in the Crowd
  • Lack of movement sound

60
Radio
  • Advantages
  • Demographic selection
  • High frequency
  • Immediate
  • Sound reinforcement
  • Quick flexibility
  • Disadvantages
  • Restrictive message length
  • Need for repetition
  • Short recall factor
  • Cluttered placement

61
Television
  • Advantages
  • Use of sight, sound, motion, color
  • Mass coverage
  • Immediate
  • Demographic selection
  • Disadvantages
  • Short exposure
  • Expensive production
  • Expensive to air
  • Cluttered placement
  • Viewing time drops as income increases

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Outdoor
  • Advantages
  • Reaches large audience
  • Long-term exposure
  • Color graphics
  • Forms include billboards, posters, illuminated
    signs, moving vehicle signs, bench ads
  • Disadvantages
  • Limited message length
  • Expensive to produce place
  • Difficult to obtain the best locations
  • Legal restrictions for use

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64
Conclusion
  • Understand both your customer and your product to
    help focus your efforts
  • Before you begin your marketing efforts you
    should consider what you are selling and exactly
    who you are marketing to.
  • When it comes to your customers, remember that
    only a proportion of the population is likely to
    purchase any product or service, so the more
    accurately you pitch your sales and marketing
    efforts to this group, the less your efforts will
    be wasted. As a result, targeting and
    segmentation are designed to use the right sales
    message for each potential purchaser.
  • What ever you do, make sure you get 'the biggest
    bang for your buck.
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