3-1 market potential, market demand, and market share chapter three various forms of market demand...

3-1

Market Potential, Market Market Potential, Market Demand, and Market ShareDemand, and Market Share

Chapter Three

• Various forms of Market Demand and Opportunities

• Market Potential and Growth

• Product Life Cycle

• Marketing Mix and Market Share Performance

• Market Share and Development Metrics

3-2

Market DefinitionMarket DefinitionNarrow vs. Broad Market Focus

3-3

Market OpportunitiesMarket OpportunitiesVertical vs. Lateral Market Demand

3-4

Market PotentialMarket Potential

Market Penetration vs. Market Demand

= Current Market DemandMaximum Market Demand

Market Development Index (MDI)

3-5

Five Forces of Market Five Forces of Market PotentialPotential

1. Awareness

2. Availability

3. Affordability

4. Ability to Use

5. Benefit Deficiency

3-6

Market GrowthMarket Growth

Three Forces of Market Growth

1. Market Potential

2. Market Penetration

3. Rate of Entry

3-7

Accelerating Market GrowthAccelerating Market Growth

3-8

Product Life CycleProduct Life Cycle

Product Life Cycle and Marketing Profitability

3-9

The Marketing MixThe Marketing Mix

• Product Awareness – Promotion and Advertising Channels

• Product Attractiveness– Effect of Substitutes

• Price Acceptability• Product Availability

– Distribution and Location

• Service Experience

3-10

Market Share Development Market Share Development TreeTree

3-11

Market Share MetricsMarket Share Metrics

• Market Share– Market Demand X Volume

• Market Share Index (MSI)– Awareness X Preference X Intent to Buy X Availability X Purchase– Three Important Benefits of MSI

• Share Development Index (SDI)– Actual Market Share/Potential Market Share

3-12

Market Development vs. Market Development vs. Market ShareMarket Share

3-18

Customer Analysis and Value Customer Analysis and Value CreationCreation

Chapter Four

– Customer Value and Benefits

– Value Creation

– Various Types of Value

– Price and Associated Costs of Purchase

– Customer Analysis Tools

3-19

Customer Value And BenefitsCustomer Value And Benefits

• What is Customer Value (CV)?– CV =Benefits – Cost

• What are Customer Benefits?

• How do we Create Value?– Value Creation Process

Service Benefits

Brand Benefits

Product Benefits

Price &OtherCosts

Customer Value

3-20

Discovering Customer BenefitsDiscovering Customer Benefits

• Why is it important?

• Methods:1. A Day in the Life of a Customer2. Empathic Design3. Lead User Analysis4. Staple Yourself to an Order5. The Kano Method

3-21

Life Cycle Costs and Value Life Cycle Costs and Value CreationCreation

How do we Create Customer Value?

Reduce Lifecycle Costs…Price Paid, Acquisition Costs, Usage Costs, Ownership Costs, Maintenance Costs, Disposal Costs

3-22

Price Performance and Value Price Performance and Value CreationCreation

• How do we quantify the performance of products?– Relative

Performance– Relative Price– Relative Customer

Value

Product PerformanceAverage Performance

Product PriceAverage Price

Relative Performance – Relative Price

3-23

Price Performance and Value Price Performance and Value CreationCreation

3-24

Customer Value and Relative Customer Value and Relative Performance Performance

3-25

Perceived Benefits and Value Perceived Benefits and Value CreationCreation

• Types of Perceived Benefits – Product Benefits– Service Benefits– Brand/Company Benefits

• How Do We Measure Perceived Benefits?

• What is the Value of Perceived Benefits?

3-26

Value Of Perceived BenefitsValue Of Perceived Benefits

3-27

Transaction Costs and Value Transaction Costs and Value CreationCreation

• What are Channel Intermediaries?

• How do they Create Value? – Use of Space– Inventory Turnover– M&S Expenses

• Quantifying Space Value and Transaction Value

Manufacturer

Products Services

Intermediary

Manufacturer

Benefits Costs

Conjoint Analysis and Value Conjoint Analysis and Value DriversDrivers

4-12

3-29

Conjoint Analysis and Value Conjoint Analysis and Value DriversDrivers

3-30

Value Drivers and PositioningValue Drivers and Positioning

3-31

Customer Analysis ToolsCustomer Analysis Tools

How do we Evaluate Customer Benefits?