Industry/Market Potential

Understanding Segments and Exploiting Gaps

Mapping the Industry or Market

Key Questions:
hat produ!ts are in the industry" hi!h markets or !ustomers are ser#ed" ho are the !urrent !ompetitors" here are the !ompetitors $ound"

THE BASIS FOR SEGMENTATION: CUSTOMER AND PRODUCT CHARACTERISTICS

Industry Size

Industrial %uyers

Technical Sophistication OEM/ Replacement Demographics

Physical Size Price Le$el (eatures

&ousehold %uyers BUYER S

Lifestyle Purchase Occasion Size Distri utor/ !ro"er

PRODUCTS

Technology/ Design Imports Employed )e*g*+ Principal Ra, MaterialPerformance !undled/ .n undled

'istri(ution )hannel

E#clusi$e/ %on&e#clusi$e 'eneral/ Special List

Geographi! *egion

Segment o$ the U+S+ %eer Market

N!rt-,east M%d2est S!ut-,east

)ustomer ,ype -Geographi! *egion.

S!ut-,2est 3est &u/ur1,pr%#ed %mp!rts Super prem%um Prem%um *eers .e/#ept )%+-t0 &%+-t *eers P!pu)ar *ud+et,pr%#ed Ma)t )%'u!r
I nde pe !!d ndent s #!n$ t!res" e st!re n%en#e s

Produ!t ,ype

Sup erm a

'istri(ution !hannel

Bars ( Rest a ur a nts

rket s

&%'u !r St!r es

%/**IE* ,0 E1,*2 / E3I,

SUPP4IE*S

INDUSTRY RI4A&RY

%U2E*S

SU%S,I,U,ES

%I/0E M1R2ET /ORE M1R2ET OLD R.LES

%E3 R.LES

DE4E&OP A PRODUCT,MAR5ET MATRI6 5 5 5 4ist produ!ts on the #erti!al axis+ 4ist markets on the hori6ontal axis+ 4ist !ompetitors in ea!h produ!t market+ C!re Market 7 Pr!du#t 7 Pr!du#t 8 Pr!du#t 9 /d#antages: 5 5 5 e (egin to understand the produ!t5markets e#olution o$ the industry+ e identi$y se<uen!e o$ ne= entrants+ e identi$y produ!ts and markets that are under5ser#ed > G/PS
)ompetitor7 )ompetitor8 )ompetitor8 )ompetitor8

Market 8
)ompetitor7 )ompetitor9 )ompetitor9

Market 9
)ompetitor7 )ompetitor9 )ompetitor: )ompetitor7 )ompetitor8

Market :
)ompetitor7 )ompetitor; )ompetitor7

hi!h are the %iggest? @astest Gro=ing? and Most Pro$ita(le )ustomer Segments"
CUSTOMER SEGMENTS
Se+ments t! F!#us On
&igh

'ata 1eeded
Identi$i!ation

SEGMENT PROFITABI&ITY

o$ !ustomer segments -a!!ording to needs? (eha#iors? and key !hara!teristi!s. )urrent si6e and #alue o$ ea!h !ustomer segment Pro(a(ility o$ ea!h !ustomer segments

4o= 4o= &igh

)ir!le si6e represents millions spend

/naly6ing segment alternati#es: /pplying the $i#e $or!es o$ !ompetition+ %uyer types

Suppliers
Produ!t types

,hreat o$ mo(ility

Segment *i#alry

Su(stitute

%uyers

T2!,D%mens%!na) N%#-e Spa#e !r T2! C!mpet%t!rs" A and B

In!ome )ompetitor /Es 1i!he %oundary

a
/ / / B CD?DDD /
A

a
@ringe )ustomers /

(
/ /

a (
% % % a % 1i!he )entroid % % )ompetitor %Es 1i!he %oundary /ge

/ a
)ore )ustomers

/ %

a (
89 years

)ore )ustomers 1i!he Potential 1i!he Share Market Potential Market Share )ompetiti#e 1i!he Share

Brand A 77 79 77/79 > F8+8G ;H 7F/;H > 9I+:G 8/79 > ;D+DG

Brand B F 77 F/77 > :8+:G ;H 7;/;H > C7+CG C/77 > 8:+CG

0ut!omes o$ Segmentation /nalysis

J ho (uys our produ!t and =hy K -(uyer pro$iles5psy!ho/so!io/geo/demographi!. K 1eed or $un!tion $ul$illed K Pro(lems sol#ed J ho does not (uy our produ!t -light usersLnon5 (uyer pro$iles. K hen pur!hased K here -!hannel. pur!hased

J*i#als M Su(stitutes K K hi!h !ompetitors are selling =hat and to =hom

hat alternati#es are (uyers pur!hasing to satis$y the need/$un!tion/pro(lem $or =hi!h our produ!t !ompetes J Segment /ttra!ti#eness K )urrent si6e5re#enue/pro$it potential K 'emand penetration/gro=th K )ompetition K )ompati(ility =ith strategy/supply/distri(ution !hain

Segmentation Gap /nalysis /llo=s Managers to:

'i#ide the market into meaning$ul and measura(le segments a!!ording to !ustomersE pro$iles -needs? attitudes? (eha#iors? attri(utes. and produ!ts o$$ered -existing or ne=.+ Estimate the si6e and pro$it potential o$ ea!h segment (y analy6ing the re#enue and !ost impa!ts o$ ser#ing ea!h segment+

,arget segments a!!ording to their potential -pro$it? entry? de$ensi#e. and to the !ompanyEs a(ility to ser#e them in a proprietary =ay+ In#est resour!es to tailor produ!t? ser#i!e? marketing? and distri(ution programs to !on$orm to the needs o$ ea!h targeted segment+ )ontinuously monitor ea!h segment -!ustomer/produ!t shi$ts? !ompetition? penetration. and adNust the approa!h o#er time as !onditions !hange+

Be !re Entr1 , S!me Imp!rtant ;uest%!ns t! Ask

J J J J J J J J 3-at +aps 2%)) 1!u %))< And 2-1 d!es t-at +ap e/%st< 3%)) 1!ur entr1 +%$e r%se t! a ne2 pr!du#t market< H!2 2%)) 1!ur entr1 a e#t #urrent pr!du#t markets< H!2 m%+-t #urrent #!mpet%t!rs resp!nd t! 1!ur entr1< H!2 2%)) tar+eted #ust!mers resp!nd t! 1!ur entr1< 3-at #!mpet%t%$e ad$anta+e .% an10 2%)) 1!u p!ssess< 3-at m%+-t *e 1!ur ma=!r $u)nera*%)%t%es< 3-at #an 1!ur %rm d! t! preempt and resp!nd t! #!mpet%t!rs<

Identi$y Potential Market Gaps

Untapped Market Demand CanCt a !rd at t-%s pr%#e C!mpet%t!rCs pr!du#ts sat%s 1 Pr!du#t d!es n!t %t #ust!merCs needs !r s%tuat%!n
N!n#ust!mers #ann!t !*ta%n N!n#ust!mers una2are

Pr%#eB#!st
C!mpet%t%$e Gap Usa+e $s> Needs C!mpat%*%)%t1
Per !rman#e" speed" eatures" et#>

P!tent%a) N!> ! Cust!mers

Current Bus%ness Se+ment ?@A Pers!na) Users :@A

D%str%*ut%!n +ap Usa+e Gap

Pr%#eBPr!du#t )%ne +ap

D%str%*ut%!n +ap Usa+e +ap

C!mpet%t%$e +ap Y!ur sa)es

E/pand t-e pr!du#t )%ne a+ @ill out existing produ!t line (+ /dd produ!t line elements E/pand d%str%*ut%!n a+ %roaden distri(ution !o#erage (+ In!rease distri(ution intensity !+ Impro#e distri(ution exposure St%mu)ate -ea$%er use a+ @ind ne= users (y 7 7+Stimulating nonusers to use ; ;+Stimulate light users to use more 8 8+In!rease amount used ea!h o!!asion (+ @ind ne= uses $or the produ!t !+ Promote produ!t usage at ne= times Penetrate #!mpet%t!rsC p!s%t%!ns a+ 'ire!t assault on !ompetitors (+ /tta!k su(stitutes De end 1!ur present p!s%t%!n

T-ree D% erent T1pes ! D%str%*ut%!n Gaps 7+ 'istri(ution CO4ERAGE Gap

@irm $ails to distri(ute its produ!ts in all geographi! regions ;+

'istri(ution INTENSITY Gap

@irm has an inade<uate num(er o$ outlets to distri(ute its produ!ts

8+ 'istri(ution E3P0SU*E Gap

@irm has poor or inade<uate shel$ spa!e? lo!ation? displays? et!+ =ithin outlets

DE4E&OP A PRODUCT,MAR5ET MATRI6 5 5 5 4ist produ!ts on the #erti!al axis+ 4ist markets on the hori6ontal axis+ 4ist !ompetitors in ea!h produ!t market+ C!re Market 7 Pr!du#t 7 Pr!du#t 8 Pr!du#t 9 /d#antages: 5 5 5 e (egin to understand the produ!t5markets e#olution o$ the industry+ e identi$y se<uen!e o$ ne= entrants+ e identi$y produ!ts and markets that are under5ser#ed > G/PS
)ompetitor7 )ompetitor8 )ompetitor8 )ompetitor8

Market 8
)ompetitor7 )ompetitor9 )ompetitor9

Market 9
)ompetitor7 )ompetitor9 )ompetitor: )ompetitor7 )ompetitor8

Market :
)ompetitor7 )ompetitor; )ompetitor7

/naly6ing segment alternati#es: /pplying the $i#e $or!es o$ !ompetition+ %uyer types

Suppliers
Produ!t types

Threat of mo ility

Segment Ri$alry

Su stitute

!uyers

4e#iEs possi(le gro=th modes

Existing Produ!ts Existing Markets Market Penetration Strategy Market 'e#elopment Strategy 1e= Produ!ts Produ!t 'e#elopment Strategy Produ!t/Market 'i#ersi$i!ation Strategy

1e= Markets

*epositioning 4e#iEs
4e=is has $igured out that kids donEt =ear the same Neans their parents do and that trendy retailers donEt sto!k the same lines as O+)+Penny+ So itEs !reat5 ing a port$olio o$ do6ens o$ (rands and su(5(rands? $rom !heap Slates (asi!s to high5pri!ed $ashion B:9 &igh Pri!e

)lassi!

'o!kers )lassi! B8D

'o!kers E<uipment *ed 4ine @or legs B7DD B7DDQ 'o!kers K57 B:9 Sta5Prest BF9 Slates )olle!tion *ed ,a( Eles!o 'o!kers B:D B:D *ed ,a( 'ry Good Premium Sil#er ,a( BC9 B9D BC9 'esigner 9D7 4; B89 B8D *ed ,a( %asi!s B8D
4o= Pri!e

Pintage B7;9Q