MARKET

IDENTIFICATION AND
ANALYSIS
Market analysis is the process of studying and understanding
the conditions of a market. It involves examining factors such
as customer preferences, competition, and industry trends
to make informed business decisions.
A large part of market research and an important component
of business plan.
Importance of market analysis:
 Understanding customer needs: Identifying the needs, preferences, and behaviors
of the target customers.

 Competitive advantage: Analyze competitors to differentiate and position the

business effectively.

 Identify Opportunities: By studying trends and competition, entrepreneurs can

identify gaps or areas where they can offer something unique or better.
Importance of market analysis:
 Minimize risks: Reduces uncertainties by anticipating market changes.

 Optimize marketing strategies: Target the right audience with effective messaging
and channels.

 Enhance profitability: Maximize revenue by pricing products competitively and

meeting customer demands efficiently.
In Market Identification and Analysis we have to consider 5
categories:
1. Classes of Competitors
2. Product Differentiation, Positioning
3. Market Structure
4. Market Segmentation & Size
5. Beachhead Market and Creating your market
A competitor is a person, business, team, or organization that
competes against you or your company. If somebody is trying to beat
you in a race, that person is your competitor.

In business, we call a close a competitor a rival. In other words, rivals

are the same size and make similar products.

If two companies are leaders in their field, we refer to them as arch

rivals.
Largest firms that are arch rivals
There are 5 types of competitors:
1. Direct competitors - a firm that sells the same and services as you in the
same markets.
2. Indirect competitors - a firm that sells different of products and services
butare in the same industry and same markets.
3. Potential competitors - a direct, indirect or replacement competitor
thatcurrently has no distribution in our markets.
4. Future competitors - a firm that has business capabilities that would allow
them to quickly take market share if they entered your markets.
5. Replacement competitors - a firm that sells products and services that are
indifferent industry that could be used as a substitute for your products.
DIFFERENTIATION
-is the process companies use to make a product or service
stand out from its competitors in ways that provide unique value
to the customer.

POSITIONING
-a strategic process that marketers use to determine the place or
niche an offering should occupy in a given market, relative to other
customer alternatives.
Market Structure refers to how different industries are classified and
differentiated based on their degree and nature of competition for
goods and services.

Economic market structures can be grouped into four

categories: perfect competition, monopolistic competition, oligopoly,
and monopoly.
TYPES OR CATEGORIES OF MARKET STRUCTURE

1. Perfect Competition
2. Monopolistic Competition
3. Oligopoly
4. Monopoly
 MONOPOLISTIC
CHARACTERISTICS PERFECT COMPETITION MONOPOLY COMPETITION OLIGOPOLY

Number of firms in market Many One Many, but fewer than Few
perfect
competition

Firm’s ability to control price None High Some Some

Barriers to entry None Subject to government Few Many

regulation

Emphasis on
Product Differentiation Very Little No products that showing perceived Some differences
compete differences in
directly products
A market segment is a group of people in a homogeneous market
who share common marketable characteristics such as interests,
geography, age, demographic, or lifestyle.
Commonly used in marketing strategies, market segments help
companies optimize their product or service to suit a given
segment’s needs. Often, market segments are used to identify a
target market.
Market Segmentation
the process of separating, identifying, and evaluating the layers of a
market to identify a target market.
Market Size
The "market size" is made up of the total number of potential buyers
of a product or service within a given market, and the total revenue
that these sales may generate.
Three (3) Criteria to Identify Different Market Segments
1. Homogeneity – common needs within a segment
2. Distinction – being unique from other groups
3. Reaction – a similar response to the market
Market Segmentation Strategies
1. Geographic Segments – customers are targeted locally, statewide,
regionally, or nationally
2. Demographic Segments - customers are targeted by their age,
gender, race, income, and education level
3. Psychographic Segments - identification based on attitudes,
beliefs, emotions, lifestyle, and hobbies
4. Behavioral Segments - identification based on various patterns
such as purchasing occasion and loyalty status
Beachhead
Is derived from a military strategy that advocates that, as you are
approaching an enemy territory, you should plan and focus all your
resources on winning a small border area that become a stronghold
area from which to advance into the enemy territory.
Beachhead Market
A small market with specific characteristics that make it an ideal
target to sell a new product or service. The choice of the market is
based on the compatibility between the resources available, the
product, and the market itself.
 Conditions that Define a Beachhead Market
1. Customers purchase similar products
2. Customers have similar sales cycles
3. Word of mouth communication between customers

Strategies for Creating New Markets

1. Sell the market concept before building a product.
2. Highlight positive social and environmental impacts.
3. Incentivize your team to think “outside-the-box” continually.
4. Work to build a compelling story around your new idea.
5. Use social media and traditional media to build demand for
change
1 FAST-MOVING 2 3
CONSUMER CONSUMER NON-
CONSUMER GOODS
DURABLES SECTOR DURABLES SECTOR
SECTOR
• purchase low-value • a category of products • purchased for
items regularly that are designed to last immediate use
• goods with a relatively a long time • items typically have a
shorter shelf life • purchased less lifespan of several
• low profits by frequently minutes up to three
distributing large years
volumes • products that must be
• intense price purchased regardless of
competition the state of a country's
economy
1 2
INDUSTRIAL RESALE
MARKET MARKET
• major criterion is • principal criterion is the
keeping production mark-up percentage
satisfied in order to that that can be added to
materials and goods that are
components are purchased from
available for manufacturers and
incorporation in wholesalers in bulk and
production process then resold to individual
customers
Distribution refers to how and when to move the product from the
greenhouse to the customer’s home, store display, or wholesaler.

Distribution strategies are; intensive, selective, or exclusive.

 • involves widespread placement of the product at low prices
1. INTENSIVE
• the aim is to saturate the entire market with the product
PRODUCT • this strategy can be expensive and very competitive
DISTRIBUTION • large-scale producers who market nationally or internationally often employ this method

2. SELECTIVE • selecting a small number of intermediaries, usually retailers, to handle the product
PRODUCT • offers the advantages of lower marketing costs and the ability to establish better working
relationships with customers and intermediaries
DISTRIBUTION

• extreme version of selective distribution

• producer agrees not to sell to another buyer
3. EXCLUSIVE • in exchange, the buyer may agree to buy that product only from the producer
DISTRIBUTION • carries promotional advantages
• such as the creation of a prestigious image for your product, and often involves reduced
marketing costs
EXAMPLES
1. Intensive 2. Selective 3. Exclusive
Distribution Distribution Distribution

• biscuits • cars • automobiles

• wheat • clothing • women's apparel
• chocolates • watches • major appliances
• soaps • furniture
• soft drinks
• cigarettes
 Production costs refer
to all of the direct and
indirect costs
businesses face from
manufacturing a
product or providing a
service.
Production
Return of investment
(ROI) is calculated by
dividing the profit
Investment
earned on
an investment by
the cost of
that investment.
Marketing costs are the all
expenses that the company
makes to market and sell its
products and develop and
promote its brand. These
Marketing marketing costs or
Cost expenses include expenses
Cost incurred to change the title
of goods, promotion of
goods, inventory costs,
distribution of goods etc.
Promotion cost is a cost
Return of Promotion companies incur to market
Cost their products or services to
consumers. Promotion
expenses range from
giveaways, free samples, or
other promotional
gimmicks in order to help
boost sales and revenue.
Common Pricing Mistakes:

1. Pricing too high relative to customers’ existing value perceptions.

2. Failing to adjust prices from one area to another based upon
fluctuating costs and the customer’s willingness and ability to pay
from one market to another.
3. Attempting to compete on price alone.
4. Setting prices too low with the intention of raising the prices later.
5. Discounting prices