Chapter 2-2

*
* Identifying and Describing End-Users
*
* Illustrative buyer characteristics in consumer
markets:
 Family size, age, income, geographical
location, sex, and occupation
* Illustrative factors in organizational markets:
 Type of industry
 Company size
 Location
 Type of products
1-2
*
* How Buyers Make Choices
*
 BUYING DECISION PROCESS:

1. Problem recognition

2. Information search

3. Alternative evaluation

4. Purchase decision

5. Post-purchase behavior
1-3
* Environmental
* Influences
*

* External factors influencing buyers’

needs and wants:
 Government, social change,
economic shifts, technology etc.
* These factors are often non-
controllable but can have a major
impact on purchasing decisions
1-4
*
* Building Customer Profiles
*
* Start with generic product – market
* Move next to product- type and variant
profiles >> increasingly more
specific
* Customer profiles guide decision
making (e.g. targeting, positioning,
market segmentation etc.)

1-5
*
* ANALYZING COMPETITION
*
1. Define the Competitive
Arena for the Generic,
Specific, and Variant
Product Markets

PRODUCT- 2. Identify
4. Identify MARKET
and and
STRUCTURE Describe
Evaluate
AND Key
Potential
MARKET Competitors
Competitors
SEGMENTS

3. Evaluate
Key
Competitors
1-6
*
* Examples of Levels of Competition
* Baseball
cards

Bottle Video
Fast water Games
Food
Regular
colas Diet lemon Ice
Beer limes Cream
Diet-Rite
Cola
Fruit
flavored Diet
Diet Pepsi
colas Coke Wine
Product from
competition: Lemon
Product category
diet colas limes
Juices competition:
soft drinks
Coffee
Generic competition:
beverages
Budget competition:
food & entertainment

1-7
*
* Key Competitor Analysis
*
* Business scope and objectives
* Management experience, capabilities,
and weaknesses
* Market position and trends
* Market target(s) and customer base
* Marketing program positioning strategy
* Financial, technical, and operating
capabilities
* Key competitive advantages (e.g.,
access to resources, patents)
1-8
*
*
*
Extent of
Market Coverage

Competitor
Current Customer
Capabilities Evaluation Satisfaction

Past
Performance

1-9
*
* MARKET SIZE ESTIMATION
*
Product-Market Forecast Market Potential
Relationships Estimate
(area denotes sales in $’s)

Unrealized
Potential

Company Industry
Sales Sales
Forecast Forecast
1-10
*
* Product-Market Forecast Relationships for
* Industrial Painting Units

Sales (in 1000s

of units)
900
800
Market
700 Potential
600 Sales Forecast

500
400
300
200 Company XYZ
Sales Forecast
100
0
2003 2004 2005 2006 2007 2008 2009 2010
1-11
*
* DEVELOPING A STRATEGIC VISION ABOUT
* THE FUTURE

 Industry Boundaries Blurring and Evolving

 Competitive Structure and Players Changing
 Value Migration Paths
 Product Versus Business Design
Competition
 Firms are Collaborating to Influence Industry
Standards

Source: C. K. Prahalad, Journal of Marketing, Aug. 1995, vi.

1-12