Framing the Market Opportunity

1
Framing the Market Opportunity

• Annie Barbara
• 8 Mar, 2005

2
Stages of Internet Marketing
3
Market-Opportunity Analysis in the Networked
Economy

• Should marketing analysis for a networked economy
  be the same or differ from marketing analysis for
  a more traditional economy?

4
Market-Opportunity Analysis in the Networked
Economy

• Competition occurs across industry boundaries
• Competitive developments and responses are
  occurring at an unprecedented speed
• Competition occurs between alliance of companies
• It is easier to influence and change consumer
  behaviour as in the early stages of being defined
• Industry value chains/systems are rapidly being
  reconfigured

5
Framework for Market-Opportunity Analysis
Step 1 Investigate opportunity in an existing
or new value system
Step 2 Identify unmet or underserved needs
Step 3 Determine target customer segments
Step 4 Assess resource requirements to deliver
the offering
Step 5 Assess competitive, technological, and
financial attractiveness of opportunity
Step 6 Conduct go/no-go assessment
6
Step 1 Investigate Opportunity in an Existing or
New Value System
Identifies previously unexploited areas of
potential market value for further analysis
7
Three Basic Value Types
Trapped Value
New-to-World Value

• Disrupt pricing
• Ease access
• Radically extend reach

• Customize offerings
• Build community
• Introduce new functionality or experience

• More efficient markets
• More efficient value system

Hybrid Value
8
Value Discussion

• When seeking value,
• the company can focus across the
  industryhorizontal play
• or it can focus within its businessvertical play

9
Step 2 Identify Unmet or Underserved Needs
Uncovers customer decision process and
opportunity nucleus that a new offering could
address
10
1. Mapping the Customer Decision Process
11
2. Revealing Unmet or Underserved Needs

• In which steps/activities, a customer would
  receive an experience?
• The nature of the ideal experience the customer
  wishes to receive
• Actual experience vs. ideal one
• Does the environment influence the experience?
• Customer beliefs and associations about the
  activity implementation
• Barriers of potential customers participation
• Online opportunities of enhancing and
  transforming customer experience
• How do the customers define value?

12
Step 3 Determine Target Customer Segments
Allows a company to craft an offering that will
appeal to the target customers
13
Determining Target Customers

• Segmentation approaches

14
Effective Segmentation

• Identification
• Accessibility
• Sufficiency
• Stability

Actionable
Meaningful
15
Choice of Focal Customer Benefits

• A business articulates a value proposition when
  it specifies the key benefits that will be
  delivered to a certain target segment.
• Criteria used to assess a companys value
  proposition
• Customer Criteria
• Company Criteria
• Competitive Criteria

16
Market Mapping and Target Customers

• Marketing map shows segments size, ideal media,
  growth rate, and financial attractiveness.
• The benefits of market mapping
• Marketing mapping identify the location of the
  money and the relative opportunities in the
  market
• Then it would be easier to select initial target
  segments and to lay out a plan for further
  approach to other segments
• Maps provide structure for synthesizing
  additional information and insight.
• The segmentation can help identify future shifts
  in market definition and opportunity.

17
Step 4 Assess Recourse Requirements to Deliver
the Offering
Identifies existing resource strengths and
weaknesses needing to be addressed internally or
with partners to bring offering to market
18
Company Resource

• Customer-facing
• Internal
• Upstream

19
Partners

• Partnering is often an effective alternative to
  building or acquiring the capacity
• Networked-economy companies find partnerships
  particularly relevant because their offerings
  span traditional value-system boundaries.

20
Resource System

• Critical steps for definition of resource system
• value proposition
• offering specification
• Modifications for online marketplace
• Shift from physical world to virtual-and-physical
  world
• Shift from activities to capacities
• Shift from supply-side focus to demand-side focus
• Shift from single to multi-firm system

21
Resource System Specification

• Identify value propositions core benefits
• Identify capabilities related to each benefit
• Link resources to each capability
• Identify the firms ability to deliver each
  capability
• Identify complementary partners

22
Resource System Quality Assessment

• Uniqueness of the system
• Links between capabilities and benefits
• Links among capabilities in the system
• Links among resources
• Links between virtual world and physical world
  systems
• Sustainable advantages

23
Step 5 Assess Competitive, Technological, and
Financial Attractiveness of Opportunity
Determines the character and magnitude of the
opportunity establishes barriers to entry and
potential rewards
24
Character and Magnitude of the Opportunity

• Competitive Intensity
• Competitors identification and mapping
• Customer Dynamics
• Unconstrained opportunity, segment interaction
  and growth
• Technology Vulnerability
• Impact of technology adoption and new
  technologies
• Microeconomics
• Market size and profitability

25
Step 6 Conduct Go/No-Go Assessment
Determines whether the opportunity is attractive
enough to pursue
26
Go or Not to Go?

• For management to make a decision
• Pull gathered data/info together and draft a
  business plan
• Consider whether the information is sufficient to
  make a decision
• Decide to go ahead, to reject, or to carry out
  more market research

27
Example
www.
.com