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Need a state of felt deprivation Want a specific need e.g. a particular type of juice or brand to quench thirst Demand want backed by purchasing power Market is the process of identifying the needs and wants of consumers, highlighting then and producing a solution to their problems in the form of a product or service which is delivered to the customers at the right price, right time and right place. Identification is through market research. Highlighting is through promotion. Concepts: Market share Market growth Market size

Market Segmentation age, gender, income, cultural 1. Demographic Segmentation vital characteristics of a population 2. Geographic Segmentation regions, areas, atmosphere, weather 3. Psychographic Segmentation personality, attitudes 4. Behavorial Segmentation Product Portfolio Variety of products or group of products that a company is producing or selling. Product Portfolio Analysis 1. The Product Lifecycle 2. BCG Matrix Sales Promotion target customers Target Promotion target retailers BCG Matrix Market Share High Low Growth Stan Problem Child? Do


Cash Low

Circle represent different products and their size shows the size of sales revenue being generated by it. Very helpful as it helps decide the type of strategy to be used for each product. cash low we harvest it i.e. amount from it invested on tar and problem child.

Star has to be held at position. Problem child we need to build it to increae market share to turn it into star. d - we diverst it to maximum benefit from ti before finally removing it.

Product Portfolio Analysis EVALUATION Product life cycle shows saturation stage of one product so another product should be launched during this time so that cahsflows are present and can continue to be invested. BCG Matrix The disadvantage is that these limits the creativity within and organization and if not prepared in an accurate way then wrong decision can be made. Value Analysis PRODUCT TESTING STAGE OF NEW PRODUT DEVELOPMENT Appearance C A B Performance (function) A+ A A+ B Economy of Manufacture (cost effectiveness) product is in equilibrium; very successful cost is very less; it is for mass market who are just concerned with the cost of the product rather than the appearance or performance; low income consumers purchase such products. A+ C performance and appearance aspects have been effectively achieved but its cost effectiveness has been compromised luxary items. Such a technique has major limitations: 1. Establishing correlation does not prove that there is a cause and effect. Sales could have been rising for other factors entirely. 2. It fails to consider other factors, such as sales changes due to seasonal and other variations. Mathematical methods of correlation analysis can be undertaken that do not rely on the graphical approach. TIME SERIES ANALYSIS This method of sales forecasting is based entirely on past sales data. Sales records are kept over time and when they are presented in data order, they are referred to as a times series. The analysis of a times series involves decomposing the data to establish a pattern. If a pattern is shown to exist, there is a basis for predicting trends into the future. Extrapolation: The most basic method of predicting sales based on past results is termed

extrapolation. Extrapolation means basing future predictions on past results. When actual results are plotted on a timeseries graph, the line can be extended, or extrapolated into the future along the trend of the past data. 2000 2000 1500 500 -

Promotional Elasticity =

% QD % in Pr omotion

0< X < 00 (it can also be ve)

direct relationship Income Elasticity =

% QD % in Income

Inferior Goods negative elasticity (YED < 1) Normal Goods positive elasticity (0 1) Luxury Goods positive elasticity (YED > D)