Market Appraisal of Project

Appraisal
• A market analysis is a quantitative
and qualitative assessment of
a market. It examines
the market size,
various market segments,
customer buying patterns, the
competition, and the economic
environment.
 Project Appraisal: Market
Aspects
• A market appraisal reviews the project ‘s
demand, number of local beneficiaries,
prices of services or products, distribution
mechanism, future market growth to
ensure it will generate profits or it will able
to recover costs. The study is to assure
marketability of the project.
• What would be the aggregate demand of
the proposed product or service?
• What would be the market share of the
project under appraisal?
 Points to look at
• Past and current demand trends
• Past and current supply position
• Production possibilities and constraints
• Imports and exports
• Nature of competition
• Cost structure
• Elasticity of demand
• Consumer behavior motivation, attitudes, preferences,
requirements
• Distribution channels marketing policies
 Marketing as a
Matching Process
• A matching process to
ensure that marketing mix
and internal policies are
appropriate to the market
forces.
• Wants, needs and
demands Vs supply?
• Potential Vs Penetrated
Demand?
 Marketing
• Marketing is the business function that
identifies an organisation’s customer
needs and wants, determines which target
markets it can serve best, and designs
appropriate products, services, and
programs to serve these markets. (sources:
Kotler, P. and Armstrong, G, 1994. Principles of marketing,
Prentice hall International)
 Review of Market and Demand
Study
• Is the demand expressed a real need or only
demanded for particular benefits of certain
group?
• Market and demand appraisal reviews how
the demand size, demand growth, number of
populations/ organisations that have demand
for the product/service
• How much is the unfulfilled demand?
• What sources of data were used in analyzing
market.
 Review of Market and Demand
Study Cont..
• What price of product/service will be
charged? How it was analyzed?
• Analysis of competitors, their strength,
weakness
• Distribution mechanism etc.
Free Services and Market Study
• Free services also have demand. Free
services also compete in the market.
Production units including public schools,
roads, hospital without having any market
price must not be interpreted to mean that
there is no demand, no competition, no
substitute.
 Process of Appraisal
• Review size of demand in multiple years
• Reliability of sources of data
• Objective and methods of market survey to find
market related data
• Examine assumptions, and methodology
• Examine analysis of product, price, promotion
related data
• Assure Sufficiency of analysis
• Conduct further study and analysis
 Demand Forecasting Methods
Survey Method (Simple • Statistical Method
and for short term, more (Complex and Long
qualitative in nature) term, quantitative
-Expert Opinion Pool nature)
-Market Experiment - Trend Projection Method
Method - Barometric Method
-Delphi Method - Econometric Method
- Index Number Method
- Decision Tree Method
Collection of Market Information
• Review the Data sources: primary and
secondary
• The important secondary sources are
national census, national survey, economic
survey, reports of export promotion centre,
reports of respected ministry
• Market Survey
• Is the collected data sufficient and reliable?
 Market survey
• Secondary information may not provide
sufficient information. In that case, further
information can be collected by market
survey
 Objectives of Market Survey
• How much is the total demand?
• At what rate the market is growing?
• What are the size of different segments?
• What needs they want to fulfill?
• Existing supplier/ Possible market entrants
• Are they dissatisfied with the present products?
• How many of them are dissatisfied?
• What quality is desirable to satisfy them?
• How much they can spend?
• What quality is acceptable? etc
 Market Segmentation
• Dividing a market into distinct groups
(segments) of buyers with different needs,
characteristics or behaviors who might
require separate services or marketing mix
 Undifferentiated Marketing

Company Customer

Undifferentiated marketing

Undifferentiated targeting occurs when the marketer ignores the apparent

segment differences that exist within the market and uses a marketing strategy
that is intended to appeal to as many people as possible.
 Differentiated Marketing

Company Customer
s

Differentiated marketing
Concentrated Marketing Approach

• A concentrated marketing approach where

organisations target one specific segment
out of the identified different segments.
Selecting specific groups of people (poor
and volnurable) and designing service mix
accordingly.
 Concentrated Marketing

Company Customer
s

Concentrated marketing
 Evaluating market segments
• Segment size and growth
• Segment attractiveness (for example if
already served by many competitors, it
may be less attractive). Particular segment
is less attractive if there is less entry
barrier, substitutes limit the potential price,
if targeted customer can bargain price.
• Organisation’s objectives and resources
 Marketing mix decision
Product Price
quality, design, packaging,
Pricing strategy
service, warranty etc.

Promotion Place
Advertising Channel of distribution
Personal sale Transport
Public relations Warehouse
Sales promotion
 Pricing
• How much to price for goods/services of
the project so that product will be accepted
in the market ?
• Is the data related to pricing is scientifically
collected and analysed?
 Distribution
• Examination of different distribution
process of the selected segments.
• Evaluating different distribution
process
• Assuring Suitable distribution strategy
 Promotion

• Evaluating and choosing alternative ways

of promotion

Promotional marketing is the use of any

special offer intended to raise a customer's
interest and influence a purchase, and to
make a particular product or company
stand out among its competitors.

https://www.marketing-schools.org/types-of-marketing/promotional-marketing.html
 Competitive Strategy
• Differentiation Strategy
(by product features,
quality etc.)
• Low cost Strategy
(offering product or Michael Porter defines
service of same quality at three strategy types that
can attain competitive
lower price in a advantage. These
sustainable manner) strategies are cost
leadership, differentiation,
• Focus strategy (Serving and market segmentation
particular segment with (or focus).
https://learn.saylor.org/mod/page/vi
higher quality) ew.php?id=8821
Marketing Mix of Service
 People in service Delivery
• Production and consumption of service
simultaneously.
• Employees behaviors like courtesy,
friendliness, responsiveness affect
perceived service quality.
• Service reliability (quality of consultant) is
within the control of person
 Process
• Service production and delivery involves
performing a process besides utilizing
materials, equipment, and personnel.
Customer participates in service deliver
process. So the process is very important
in the success of service operations. The
process constitutes the service itself.
 Physical Evidence
• Physical evidence is defined as the
environment in which the service is
delivered and in which the firm and
customer interact, and any tangible
commodities that facilitate performance or
communication of the service
 Marketing Plan
• Is marketing plan suitable?
• Is it sufficient?
• Is it implementable?
• Revising plan
 Assurance of Market Viability
and Marketing Plan
• Will it be successful considering the
demand and market?
• Is the demand/market study sufficient?
• Is marketing plan sufficient?
 Thank
You

Ref:
Powerpoint Slides of Dr. Raghu Bista & Mr. Pramod Niroula
NASC downloaded October 10, 2020