Market and Competition
Session 10-11
J0704-Business Plan
Help your investors know how
you will compete
Your market has a free
choice and only by
supplying what the market
wants, and not by your –
Michael J. Ferguson
J0704-Business Plan
The Elements of an Market and
competition
•Market and competition summary
•Market description-segments and target markets
•Market size and trends
•Competition identification
•Main competitor
•Competitor analysis
•Market share
•Customer needs
•Market obstacles
•Market opportunities
J0704-Business Plan
Market Description-Segments
and Target Markets
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To write market description, you will need
to develop a market analysis.
A market analysis helps you understand:
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Who your customers are
Why they use your products or services
How many customers are in your market
How can reach them
J0704-Business Plan
Market Description-Segments and
Target Markets
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Market Segmentation
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Most market tend to be segmented in
different ways, such as by price point,
product or services features, product
function, specialty, sales method,
delivery method, geography,
consumer groups, or any combination
of these
J0704-Business Plan
Market Description-Segments
and Target Markets
•
Target Market
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To identify tour target market, you must match what
you sell at what price and how you sell it with the
needs of consumers in your targeted market
segments.
Consumer profile
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Four tools available to get close-up your consumer
profile :
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Customer analysis
Consumer demographic analysis
Consumer psychographic analysis
Consumer geographic analysis
J0704-Business Plan
Market Description-Segments and
Target Markets
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Customer Analysis
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From your research, obtain an
estimate of the percentages of
your total market for each of the
customer types
Example :
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Customer types
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Commercial
» Business
» Institution
Consumers
Total
12%
6%
82%
100%
J0704-Business Plan
Market Description-Segments and
Target Markets
•
Customer Analysis
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Commercial : institution
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Government offices
School
Hospitals
Subtotal
2%
3%
1%
6%
J0704-Business Plan
Market Description-Segments and
Target Markets
•
Consumer Demographic
analysis
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Typically, these are
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gender,
age,
Marital status
Family size
Annual household income
Occupation
Education level
Residential location
Home ownership
J0704-Business Plan
Market Description-Segments
and Target Markets
•
Consumer Psychological analysis
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Less objective
The result can show the indirect and intangible
benefits your purchaser derives from the product or
service or indirect and intangible need it fulfills
Help to understand consumer buying pattern and
buying decisions
J0704-Business Plan
Market Description-Segments and
Target Markets
•
Consumer Geographic
analysis
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Describe are that you intend to
serve and identifies the density
of your customers in those
areas.
Areas can be national,
regional, city,etc
J0704-Business Plan
Market Size and Trend
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Begin this segment with the current, overall
population on your area
Describe percentage of population that match
your consumer and customer profiles
Make comparison of population, anticipated
numbers of customers and overall area in
square miles of your sales area
Express any trend in your market you can
forecast
J0704-Business Plan
Competition Identification
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It is necessary to find as much accurate
data as possible about the competitionfor your marketing strategy
Get data such as :
– Name of competitors
– Total number of sales for each or even the
number of employees per business
J0704-Business Plan
Main competitor
• Identify main competitor and concentrate
on them
• Answer these questions :
– Who are the major competitors?
– What are the keys to their success ?
– What are their strength and weakness ?
– How do you compare with them ?
J0704-Business Plan
Competitor Analysis
• Compile a list of factors
that would work best for
your type of business
• You can make up a
worksheet for each
competitor
• Be objective
• Consider intangible
factors
J0704-Business Plan
Market Share
• A percentage estimate of
your company’s expected
share of the total industry
sales in your sales area
• Per capita estimation
• Analyze the census
J0704-Business Plan
Customer Needs
• Identify the different
benefits your buyer
will derive from your
products or services
• Consider tangible and
intangible benefit
J0704-Business Plan
Market Obstacles
• Explain the obstacles new competitors
must overcome to enter your market
• Some examples of possible obstacles for
new competition are substantial start-up
costs, lack of suppliers and distributors,
patent, insufficient market and market
saturation, including price wars
J0704-Business Plan
Market Opportunities
• Examine your market research for areas in
the market that can be developed by
applying some of the market-driven
strategies
• Can you find a new market that is
untapped by your competitors to provide a
product or service for an unfulfilled need ?
J0704-Business Plan