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Chapter 3:

Market Opportunity
Analysis:
1. Consumer Analysis,
2. Buying Behavior and
3. Market Segmentation
LEARNING COMPETENCIES
1. Distinguish between strategic and marketing planning in terms
of objectives and processes
2. Analyze the elements of macro- and micro-environment and
their influence to marketing planning
3. Define marketing research, its importance to a business
enterprise and identify the steps in marketing research
4. Describe the consumer and business markets
5. Differentiate the buying behavior and decision making of
individual/ household customer versus the business
(organizational) customer
6. Identify and segment market for a product or service
7. Select the appropriate target market segment and its
positioning
DIFFERENCE BETWEEN STRATEGIC
PLANNING AND MARKETING PLANNING
• ..\Downloads\MARKETING\The Difference Between a Strategic Plan and a Ma
rketing Plan.mp4
MARKETING MACRO-ENVIRONMENT

• ..\Downloads\MARKETING\The Macro environment.mp4


MARKETING MICRO-ENVIRONMENT

• ..\Downloads\MARKETING\The Micro Environment.mp4



CONSUMER
MARKET
Characteristics Influencing Buyer
Consumer Behavior in Consumer Markets:
Buying
Behavior 1.Cultural Characteristics
2.Social Characteristics
3.Personal Characteristics
4.Psychological Characteristics
(How a learned world view
Cultural Characteristics
can influence buying behavior)

1. Culture and Sub-Culture


 Muslims bury their deceased relatives within
2 days. Buddhists, on the other hand, do not
move the body of their deceased for 8 hours
so that the spirit of the deceased can realize
what has happened. Both believe death is
transition from life to another.
2. Social Class
 When boarding a plane, hierarchy is
most evident with those in first class
are asked to board first, then
business class, then premium
economy, with the economy class as
last to board. The hierarchy shows
ranking of wealth, power and
prestige
(How people around us can
Social Characteristics
influence buyer behavior)

1. Family
 Demand for product such as long-distance
calls is influenced by the Pinoy’s strong
family attachment. Skype and similar
software that allow voice calls over internet
are now a medium of choice among Filipinos
with relatives abroad, as it is free way of
communication via the computer or a
smartphone with connection.
2. Reference Group
 In the Philippines election, the religious group
Iglesia ni Cristo is known to vote as a bloc,
where at least 77 percent of their members
follow the instruction on who to vote for in
the last two major elections.
3. Roles and Statuses
 Mont Blanc pens are positioned as the pen for
presidents of companies as well as countries;
while Johnny Walker Black Label Whiskey, and
BMW are example of products positioned for
successful people.
(How personal circumstance
Personal Characteristics
can influence behavior)

1. Age and Life Cycle


 Newly married couples are a good market for
home appliances like Moulinex, and Dyson, or
furniture from BLIMS
2. Occupation
 Call center employees working on night shifts
have encouraged more restaurants to open
24 hours.
3. Economic Circumstances
 The costs of labor in foreign countries have
brought about the rise of the call center
industries in developing countries like India
and the Philippines where labor is cheaper.
4. Lifestyle
 Millennials are now saving and spending
relatively more in travel than in clothes, this
as part of their Activities, Interests and
Opinions (AIO) as can be seen in Facebook
posts.
5. Personality
 Actress Kris Aquino has a candid brand
personality. She has been honest about her
many failed relationships and people love her
transparency
 Under Armour is brand that exudes
excitement, specially with basketball star
Stephen Curry as endorser
(How self-concept can
Psychological Characteristics
influence buyer behavior)

1. Motivation
 Donations and Helping others are examples
of satisfying a person’s self-actualization
needs. Among the Philippines’ top
philanthropists helping Filipinos are rags-to-
riches billionaires SM’s Henry Sy, PNB’s Lucio
Tan, JG Summit’s John Gokongwei, and
Megaworld’s Andrew Tan
2. Perception
 Netflix has a documentary called, “Forks Over
Knives” showing research correlation of high
dairy consumption to high osteoporosis cases
such as in the U.S. and New Zealand. It also
showed that eating fruits and vegetables is
not just a way to stay healthy but can even
reverse cancer and heart disease.
3. Learning
 Made in Germany is a label connoting
precision quality and reliable products
4. Beliefs and Attitudes
 Some consumers think that installing chimes
can bring good luck to homes and offices.
Businessmen like the number 8 car plates
numbers are being charged a premium of Php
20, 000 - 30, 000 if the numbers end in
several 8 or when 168 (meaning: one road to
prosperity is requested)

SOME OF THE
TRENDS IN THE
PHILIPPINES
Shopping:
Technology:
Communication:
Women:
Work:
Home:
Buying Preference:
Channel:
Lifestyle:
Slide 1

CONSUMER’S BUYING
DECISION PROCESS
What will I
drink?
Coffee or
Milk?
CONSUMER’S BUYING DECISION
PROCESS
STEP 1: PROBLEM RECOGNITION (Why do I
need to make this purchase)
STEP2: INFORMATION Search (where do I get
Slide 4 my information relevant to my need?)
STEP 3: EVALUATION OF ALTERNATIVES
(what are available attributes and how do I
prioritize these attributes, including brand
image?)
STEP 4: PURCHASE DECISION (what will I buy
(product brand), from whom (seller), when, how
much (price and how many (quantity)?)
Step 5: post purchase behavior (how di I feel
after using the product or service?)
PESTLE STIMULI MARKETING BUYER’S  CONSUMER BUYER’S
STIMULI CHARACTERISTIC DECISION DECISION
S PROCESS
 Political  4Ps for  Cultural  Problem  Category
 Economic Product  Social Recognition  Product
 Social  Product  Personal  Information  Brand
 Technologic  Price  Psychological Search  Channel
Slide al2  Place  Evaluation of  Vendor or
 Legal  Promo alternatives Sales
 Environmen  Purchase Represent
tal  7Ps for Service Decision ative
 People  Post-  Timing
 Process purchase  Quantity
 Physical Decision  Payment
Environment Method

BUSINESS
MARKET
Characteristics Influencing Buyer
businessBu Behavior in business Markets:
ying 1. Environmental influences
Behavior
2. Organizational influences

3. Situational influences

4. Interpersonal influences

5. Individual influences
Environmental Influences

1. Supply condition
 Supplier alliances are needed to ensure
continuous supply
2. Competitive Developments
 Technology, cost can used as competitive
advantage
 New ownership of a supplier company can be
attractive to business market when they can
leverage on the new relationship
3. SOCIAL RESPONSIBILITY
 Become the determining
dimension of a purchase such as
LBC will deliver relief goods for
free to calamity areas
 Philex Mining planted 2850
hectares with 10 million trees as
part of their social responsibility
SITUATIONAL INFLUENCES

1.TIME
2.FINANCIAL STANDING
3.AVAILABILITY
4.EXCLUSIVITY
5.SPECIAL OFFERS
ORGANIZATIONAL INFLUENCES

1. Objectives
2. Policies
3. Procedures
4. organizational STRUCTURES
5. SKILLS
6. SYSTEM
interpersonal INFLUENCES

1.INTERESTS
2.AUTHORITY
3.STATUS
4.EMPATHY
5.PERSUASIVENESS
INDIVIDUAL INFLUENCES

1. AGE
2. INCOME
3. EDUCATION
4. JOB POSITION
5. PERSONALITY
6. RISK TOLERANCE
7. CULTURE AND CUSTOMS
Slide 1

Business BUYING
DECISION PROCESS
business BUYING DECISION PROCESS
STEP 1: PROBLEM RECOGNITION
STEP 2: GENERAL NEED DESCRIPTIONS
Slide 4 STEP 3: PRODUCT SPECIFICATION
STEP 4: SUPPLIER SEARCH
Step 5: PROPOSAL SOLICITATION
Step 6: PURCHASE DECISION
Step 7: ORDER ROUTINE SPECIFICATION
Step 7: SUPPLIER PERFORMANCE REVIEW
What are the similarities and
Differences of Consumer and
Business Market?
 Identify target market
 Fully understand their
customers
 Demonstrate value-creation
SIMILARITI  Be trustworthy brands and
ES sellers
 Create a pricing scheme
affordable to their target
market
 Have customer bonding with
their customers
 Outperform competition
 Be profitable
DIFFERENCES
MARKETING
MANAGEMENT
PROCESS
MARKETING MANAGEMENT PROCESS
What opportunities should
be adopted and launched
in the marketplace?
Internally Generated Growth Opportunities
3 Major Ways to What is it? Examples
Seek Opportunities
Market Penetration Growth by having Inquirer newspapers’
existing products in an availability in the bakery
existing market (Where channel targeting early
similar product already risers
exist)

Product Development Growth by having new Felta Books transformed


product in an existing from being a book
market selling company to a
school technology
service provider,
providing not just
textbooks but also
educational DVDs, Lego
robotics kits, etc
Internally Generated Growth Opportunities(cont’d)
3 Major Ways to What is it? Examples
Seek Opportunities
Market Development Growth by having an Inquirer newspapers’
existing product, which availability in the bakery
may or may not need channel targeting early
some modification to risers
enter a new market

2 other ways
Merger and Acquisition Monde Nissin and
(M&A) Nippon Indosari
Corpindo
Diversification
SMC reinventing itself
from a food and
beverage giant to a
diversified conglomerate
Key Questions for Core Strategy: Segmentation,
Targeting and Positioning
BASIS FOR
MARKET
SEGMENTATION
FOR CONSUMERS
NEEDS AND WANTS
SEGMENTATION
A major way to segment a market is by identifying
consumer needs and wants. An example is the
multi-milliom peso market for vitamins and
mineral which segments the market based on
“Component”.

Examples are:
 Cetrin, which contains vit. C, is in the single-
component need segment

 Enervon, which contains vit. C and B complex,


is in the 2 or 3 component need segment
○ By needs and wants
Basis for Market
Segmentation for
(or benefit)
Consumers
○ By socio-demographics
○ By consumer behavior
○ By psychographics
SOCIO-DEMOGRAPHICS
SEGMENTATION
 Market segmentation most often start with
demographics but this alone cannot be
used. It must be in a conjunction with
other segmentation types.

 I deals with questions “Who are you?” and


“How much do you earn?” and commonly
used when planning and allocation selling
efforts

 Common segmentation method


VA R I A B L E S O F
DEMOGRAPHIC
S E G M E N TAT I O N
VA R I A B L E S O F
DEMOGRAPHIC
S E G M E N TAT I O N
VA R I A B L E S O F
DEMOGRAPHIC
S E G M E N TAT I O N
BEHAVIORAL
SEGMENTATION
 Segmentation by consumer behavior.
Understanding consumer behavior has its
obvious applications. For intance:

 Customers who tend to be loyal to a brand


will mot likely not to respond to a
competito’s price cut, at least, not
immediately.

 Place or distribution, display and


packaging can be critical for self-conscious
buyers of intimate products such as
condoms
VA R I A B L E S O F
B E H AV I O R A L
S E G M E N TAT I O N
VA R I A B L E S O F
B E H AV I O R A L
S E G M E N TAT I O N
PSYCHOGRAPHIC
SEGMENTATION
 Concerned more with questions “who do
you?” (instead of “who you are?”) and
“How you spend your money?” ( instead of
“How much you earn?”

 Often used for creating advertising


messages

 It also relates to social issues, personal


interests, and product attributes
VA R I A B L E S O F
B E H AV I O R A L
S E G M E N TAT I O N
PSYCHOGRAPHICS SEGMENTATION
P S Y C H O G R A P H I C S O F T H E S N A C K F O O D S AN D B E V E A G E S M AR K E T I N T H E
P H I L I P P I N E S , A R R A N G E D F R O M M O S T S T R E S S E D T O M O S T B AL A N C E D P A C E
OF LIFE (SOURCE: WORLD OF CONSUMPTION, 2015, KANTAR TNS SYNDICATED STUDY)
PRICE
SEGMENTATION
 Marketers can always benefit
segmentation by price

 The many multivitamins available in the


market can also be segmented according
to price:

 Enervon for economy segment


 Centrum for premium segment
 Pharmaton for super premium segment
BASIS FOR
MARKET
SEGMENTATION
FOR BUSINESS
MARKET MEASUREMENT
○ 1. Market Size
○ 2. Market Growth
Market
Measurement
Criteria Question to answer Example

Need How many percent of the A floor polisher marketer


market would need the can hire a market
product? research agency to
Criteria for a conduct a survey and
ask question like, “To
Valid Market what extent would you
be interested in owning a
floor polisher?” if 2/10
surveyed say they are
definitely interested, then
20% of the total
consumers would be the
potential market.
Criteria Question to answer Example

Authority and Availability How many of those Men are obviously not
interested and willing to the typical consumers to
pay for the product have buy bikinis, unless they
Criteria for a the authority or are were given “authority” to
available to buy do so, as in the case of
Valid Market 7-eleven Japan where
men buy pantyhose for
their wives.
ESTIMATING MARKET
DEMAND
Food and Beverages

Food Beverages
Estimating Market
Demand for
Canned Sandwhich
Spread and Light Alcoholic
Processed Fresh Non-Alcoholic
Beer

Canned Frozen Beer Non-Beer

Non-Spread Spread Regular Light


TARGET MARKET
○ A target market is a fiarly homogenous
group of people or organizations to which
Target Market a company wishes to appeal
○ Target Market Planning or T- Planning
enables the marketing and product
development group to focus on a target
for both product and communications
effort
○ Sometimes, multiple target market exist
because of different roles they play in
purchase.
CRITERIA TO
CHOOSE MARKET
SEGMENT
MAR
CRITERIA TO CHOOSE MARKET
SEGMENT
• Market Size
• Market Growth
• Homogeneity
• Ease of Creating Awareness
• Purchase Authority
• Loyalty Level
• Responsiveness of customers
SELECTING THE TARGET MARKET
Segment 1: ISP Segment 2: Segment 3: Segment 4:
Carriers Business Process International
Outsourcing Data Center

Potential Market 4 3 5 2
Size

Market Growth 5 4 5 4

Homogeneity 4 4 4 4

Ease of Creating 4 4 4 4
Awareness
DEFINING THE TARGET MARKET
• Identify the Primary Target Market (PTM) that is the most logical buyers to
generate the bulk of sales. Secondary Target Market (STM) must also be
reached through different communications and marketing mixes. The PTM
of a La-Z-Boy Chair worth around Php 40, 000 a unit is shown below:

PTM of La-Z-Boy Chair


Demographics

Age Range 40’s to 60’s


Gender Men
Civil Status Married
Income A
Education College
Profession Owner, Executive, Professional

Psychographics Reward/indulgence motivation, the


status seeker, and those who go
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