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Market Analysis

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Market Analysis Contents Market size Market share Market share Market growth Competitor analysis Market segmentation Market research Sampling methods Key terms Market ... – PowerPoint PPT presentation

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Title: Market Analysis


1
Market Analysis
2
Contents
  • Market size
  • Market share
  • Market share
  • Market growth
  • Competitor analysis
  • Market segmentation
  • Market research
  • Sampling methods

3
Key terms
  • Market size the total number of sales in
    (value) or quantity (volume) in a market
  • Market share the of a market an individual
    business has
  • Market growth the increase in the size of
    the market on an annual basis
  • Market segment a section of consumers in the
    market which share similar characteristics

4
Market analysis
  • Businesses use methods of market analysis to find
    out what is happening in the market
  • These tools allow them to develop marketing
    strategies which exploit opportunities

5
Market size
  • This helps businesses decide the potential
    profitability in a market
  • Larger markets tend to have more opportunities to
    make a profit
  • When a business is considering entering a new
    market they will be interested in market size and
    the fierceness of competition

6
Market share
  • Market share figures allow a business to compare
    themselves to their competitors
  • If the market is dominated by a number of large
    companies e.g., Supermarkets such as tesco, asda,
    Sainsbury's it is less attractive for new firms
    to aim at the entire market
  • The distribution of market share in a market is
    influenced by the type of market that the
    business is operating in (monopoly perfect
    competition)

7
Market growth
  • This figure is crucial for a business
  • Many attractive markets are relatively small and
    fast growing therefore offering the potential of
    high profits
  • Markets that are growing at a rapid rate tend to
    attract lots of new businesses
  • Markets tend to grow the fastest at the beginning
    of the product life cycle

8
Market growth / decline
  • Sometimes markets suffer negative growth
  • This often leads to companies leaving the market
  • Some businesses may be able to exploit
    opportunities and segments using their own USPs
    when the market is entering into decline

9
Competitor Analysis
  • Businesses need to have a good idea about their
    competitors to enable them to develop valid and
    successful marketing strategies
  • Alongside market share a business often
    benchmarks their current / potential competitors
    in order to gain a greater understanding of their
    offering

10
Segmentation Analysis
  • Market segmentation is the process of splitting
    up the market into different segments or chunks
    which share the same characteristics
  • Characteristics that businesses segment by can
    include
  • Age - Socio economic group
  • Gender - Culture
  • Ethnicity - Lifestyle

11
Segmentation Analysis
  • Segmentation analysis allows a business to tailor
    their marketing strategy to meet the needs of
    different customers
  • Some market segments are more attractive than
    others as they may display lower levels of
    competition, faster market growth or more
    opportunities to make profits

12
Market Research
  • Market research is the process of collecting,
    collating and analysing data about the market
  • Primary or field research is research that is
    done first hand e.g. questionnaires, surveys
  • Secondary or desk research uses existing sources
    of information e.g. books, journals

13
Primary research
  • Advantages
  • Fitness for purpose
  • Allows to target right segments
  • Can explain difficult problems / concepts
  • Disadvantages
  • Can be time consuming
  • Expensive
  • Some forms have low response rates

14
Primary research methods
  • Postal surveys these have a high sample size
    but low response rate, relatively cheap
  • Telephone surveys more expensive, higher
    response rate, can explain questions
  • Interviews smaller sample size, higher response
    rate, may be interviewer bias
  • Focus groups provide in-depth analysis, small
    sample size

15
Secondary research
  • Advantages
  • Quick and easy
  • Relatively cheap
  • Disadvantages
  • May be out of date
  • May not be relevant

16
Secondary research methods
  • Census provides information on all the
    households in the UK, updated every 10 years
  • Internet can provide a wealth of information
    however need to check validity of data
  • Government statistics
  • Books and journals
  • Company reports
  • MINTEL reports these are often a good source of
    market information

17
Sampling
  • Sampling refers to the methods used to select
    consumers to participate in market research
  • Random sample all of the population have an
    equal chance of being selected often done using a
    computer
  • Quota sample candidates are chosen based on
    their characteristics

18
Summary
  • Market size volume / sales in the market
  • Market share - of the market a business has
  • Market growth the rate of increase in the size
    of the market
  • Competitor analysis look at statistics on
    competitors in the market
  • Segmentation splitting up the market into
    different groups based on their characteristics
  • Market research finding out about the market
  • Primary 1st hand e.g. surveys
  • Secondary 2nd hand e.g. internet
  • Sampling method of selection of candidates for
    market research
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