MARKET ANALYSIS 1. 1 MAREKT SIZES AND TRENDS The market for the product can be divided into two segments: the Consumer and the Business Segments. Within the consumer and Business segments, it can be further segmented into four different sub-segments each, based on different characteristics or profile of the sub-segments. 1. 1-1 BUSINESS SEGMENTSThe market size of the business market has grown from about 6. 3 million units in Period 1 to about 7.
1 million units in Period 3. It is expected to grow to about 7. 7 million units by Period 4. For the business market, it is further sub-segmented to: Professionals, Wired Groups, Outsourcers and Traditional.
The profiles of the four sub-segments are shown below. Table 1: Profiles of Business’s sub-segments Business Type of Business Purchase Habits Products Sought Professional (+10% growth) High-Tech firms, consultants, growth industry. Have high purchasing power Seek efficiency in purchase. Need to focus on their company growth. Like high-end products, not particularly price sensitive. Wired Groups (+20% growth) Large Corporations Like human interface.
Decision makers buy for the rest of the company, so need to ‘trust’ the supplier. Also seek some efficiency. Large volume purchasers. Cost per unit is important to these customers. Outsourcers (+15% growth) Lean operations. Medium Size companies which focus on core business Seek efficient purchasing, are willing to give up the human touch in order to gain efficiency and cost reduction Seek low prices, product itself is not seen as core business for them.
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Very price sensitive. Traditionals (-5% growth) Traditional, often family owned stores and businesses Like human interface they can trust. Seek best product. Not price sensitive.
The market size of each sub-segments of the business market from the period 1 to Period 4 is shown below in Table 2. Table 2: Market Demand (in units) in the Business Segment for Period 1 to Period 4 Periods 1 2 3 4 Professional 1, 452, 000 1, 597, 200 1, 756, 920 1, 932, 612 Wired Groups 1, 440, 000 1, 728, 000 2, 073, 600 2, 488, 320 Outsourcers 529, 000 608, 350 699, 602 804, 542 Traditionals 2, 888, 000 2, 743, 600 2, 606, 420 2, 476, 099 Figure 1: Market demand (in units) in the Business Segment for Period 1 to Period 4 At Period 3, the market size of the Traditionals is the biggest (36. 5% of the total business segment), decreasing at a rate of 5% annually. The market size for the Wired Groups, with a growth rate at 20%, is increasing steadily from about 1. 44 million units in Period 1 to 2.
07 million units in Period 3. By Period 4, it would be about 2. 49 million units and is about 32. 3% of the business market.
It would then be the largest market size among all the sub-segment within the Business segment, with the Traditionals closely behind in size. The Professional is increasing by 10% annually and it would be about 1. 9 millions units by Period 4 (about 25. 1% of the business segment).
The Outsourcers is growing at a rate of 15% annually but it is the smallest of the sub-segments (less than 10%).
In summary, the largest sub-segment of the consumer market is currently the Traditionals but the Wired groups would be the largest by Period 4. 1. 1-2 CONSUMER SEGMENTSThe market size of the consumer market has grown from about 8. 9 million units in Period 1 to about 11. 6 million units in Period 3.
It is expected to grow to about 13. 8 million units by Period 4. In comparison, this is about 1. 8 times larger than the consumer market. For the consumer market, it is further sub-segmented to: Experienced Users, Regular Wireds, Deal Seeker and Conservatives.
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The profiles of the four sub-segments are shown below. Table 3: Profiles of Consumer’s sub-segments Consumer Socio-demo Type Purchase Habit Products Sought Experienced Users (+30% growth) High-tech people. Have purchasing power but no time to shop as they work long hours. Seek efficiency in purchase.
Focus on work and leisure Like high-end products, not that price sensitive and are high volume buyers Regular Wireds (+50% growth) Early adopters and early majority in connectedness. Non-IT, non-telecom jobs. Some blue collar A mix of efficiency and human interface A mix of product differentiation and price Deal Seekers (+20% growth) Progressive, working parents who also manage the households. Typical middle class Cost and time effectiveness drives suppliers switching behaviour. Not intrinsically ‘techies’, but willingly to go out of the way to save time and money. Extremely price sensitive.
Conservatives (-6% growth) Typically older people of many classes of society Do not seek efficient channels but require the human touch. They are ‘technology averse’. A mixture of price sensitivities and non-price sensitivities seeking medium and high end products. The market size of each sub-segments of the consumer market from the period 1 to Period 4 is shown below in Table 4. Table 4: Market Demand (in units) in the Consumer segment for Period 1 to 4 Periods 1 2 3 4 Experienced User 380, 250 494, 325 642, 622 835, 409 Regular Wireds 787, 500 1, 181, 250 1, 771, 875 2, 657, 813 Deal Seekers 4, 320, 000 5, 184, 000 6, 220, 800 7, 464, 960 Conservatives 3, 401, 860 3, 197, 748 3, 005, 883 2, 825, 530 Figure 2: Market Demand (in units) in the Consumer segment for Period 1 to 4 At Period 3, the market size of the Deal Seekers is the biggest (54. 2% of the total consumer segment), growing at 20% annually.
The market size for the Regular Wireds, with a growth rate at 50%, is increasing rapidly from about 0. 78 million units in Period 1 to 1. 77 million units in Period 3. By Period 4, it would be about 2.
65 million units and is about 19. 3% of the consumer market. The conservative, though is large in market size in Period 1, is decreasing at a rate of 6% annually and it will reduce its consumer market percentage from 38. 3% in Period 1 down to 20. 5% in Period 2.
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The Experienced User is increasing by 30% annually but it is still small compared with the other sub-segments. In summary, the largest sub-segment of the consumer market is still the Deal Seekers and the Regular Wireds is growing larger with each period and it has become a significant ub-segment in term of market size. 1. 2 MARKET NEEDS, PERCEPTIONS AND ACCESS There are basically two main products offered by various companies in the market: The Basic Product and The Value Product.
For the Basic Product, the offering from the various companies is similar, without much product differentiation. The Valued Product can be differentiated as it can have more varieties (up to 250 types), depending on what each companies offer. 1. 2-1 BUSIENSS SGEMENTSa. Market Needs The Professionals, in general, like high end products and are not particular price sensitive.
As the Professionals need to focus on their company’s growth, they seek to order the products efficiently. The Wired Groups are the decision makers for their company in term of purchase of the products. Their needs are that the trustworthiness of the supplier and that there is sufficient human interface or touch in their ordering process. The cost per unit is important to them as well.
The Outsourcers’ needs are low prices as they are very price sensitivity, efficient ordering process and are willing to give up human touch if it saves them time and money. The needs of the Traditionals are the best product (not price sensitive) and trust able human interface. b. Product Perceptions For the Valued Product offered in this segment, the Business Segment perceive the Company 5’s Valued Product as the most expensive but it is also one of the highest end (or premium product) in the market.
The Business segment perceives the cheapest Valued product is from Company 3, offered through its Call Centre. The perceived lowest valued product among the Valued Products is offered by Company 3 through its online trade system. For the Basic Product, the perceived most expensive offering is from Company 2 through their Brick & Mortar outlet while the cheapest is from Company 3 through its online trade system. c. Channel Perceptions The customer perception of the various companies’ channels is shown in the table below. The perception is based on how efficient the channel is and how much human interface the channel offers.
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Table 5: Channel Perception by Business Segment Channel Efficient Human Bricks & Mortar Company 1 30 68 Company 2 32 69 Company 3 26 63 Company 4 30 71 Call Centre Company 1 63 52 Company 2 57 46 Company 3 53 45 Company 4 58 52 Company 5 65 63 Interactive Web Company 4 30 30 Company 5 40 50 Online Trade Company 1 92 10 Company 3 77 46 Company 4 92 10 Company 5 92 10 The perception of the Bricks and Mortar channel is quite similar for all the companies involved. The perceived most efficient channel is Company 2 while Company 4 is the one with the most human interface. The perception of the Call Center operated by all the companies is slightly different. Company 5’s channel is perceived to be the most efficient and with most human interface, with Company 1 not far behind.
Company 2 and 3 are perceived to be the least efficient and lack human interface among the five companies. The perception of the Interactive Web channel is that Company 5 is better than Company 4 (the only other company offering this channel) in both efficiency and human interface. However, both companies are perceived to be low in efficiency and human interface. The perception of the Online Trade channels is that all except Company 3 is highly efficient and low on human interface. Company 3 is perceived to offer the least efficient online trade channel in the market.
d. Channel Access The business segment channel access to the various channels available is shown in the table below. Table 6: Business Customer access to channels at Period 3 Professionals Wired Groups Outsourcers Traditionals Bricks & Mortar 90% 90% 90% 90%Call Center 99% 95% 93% 85%Web 73% 76% 55% 29%In general, all segments within the Business market have very high accessibility to the Bricks & Mortar channel and the Call Centre channel. The Professional and Wired Groups have quite a high access to the web (about 73% and 76% respectively) while the Traditionals has low access to the web channel. 1. 2-2 CONSUMER Segments.
Market Needs The Experienced Users, in general, like high end products and are not that price sensitive. As the Experienced Users seek to focus on their work and leisure, they seek to order the products efficiently. The Regular Wireds need a mix of product differentiation (Basic and Valued Products) and price. At the same time, they require a mix of efficiency and human interface from the channels. The Deal Seekers’ needs are cost and time effectiveness of the product and channel and are extremely price sensitive. The needs of the Conservatives are a mixture of price sensitivities and non-price sensitivities for medium and high end products.
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b. Product Perceptions For the Valued Product offered in this segment, the Consumer Segment perceive the Company 5’s Valued Product as the most expensive but it is also one of the highest end (or premium product) in the market. The Consumer segment perceives the cheapest Valued product is from Company 4, offered through its Online Trade channel. The perceived lowest valued product among the Valued Products is offered by Company 1 through its Bricks & Mortar channel and Online Trade channel.
For the Basic Product, the perceived most expensive offering is from Company 2 through their Brick & Mortar outlet while the cheapest is from Company 5 through its online trade channel. c. Channel Perceptions The customer perception of the various companies’ channels is shown in the table below. The perception is based on how efficient the channel is and how much human interface the channel offers. Table 7: Channel Perception by Consumer Segment Channel Efficient Human Bricks & Mortar Company 1 30 68 Company 2 32 69 Company 3 26 63 Company 4 30 71 Call Centre Company 1 63 52 Company 2 57 46 Company 3 53 45 Company 4 58 52 Company 5 65 63 Interactive Web Company 4 30 30 Company 5 40 50 Online Trade Company 1 92 10 Company 4 92 10 Company 5 92 10 The perception of the Bricks and Mortar channel is quite similar for all the companies involved.
The perceived most efficient channel is Company 2 while Company 4 is the one with the most human interface. The perception of the Call Centres operated by all the companies is slightly different. Company 5’s channel is perceived to be the most efficient and with most human interface, with Company 1 not far behind. Company 2 and 3 are perceived to be the least efficient and lack human interface among the five companies. The perception of the Interactive Web channel is that Company 5 is better than Company 4 (the only other company offering this channel) in both efficiency and human interface. However, both companies are perceived to be low in efficiency and human interface.
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The perception of the Online Trade channels is all equally highly efficient and low on human interface. Basically there is no difference in the perception at all. d. Channel Access The business segment channel access to the various channels available is shown in the table below. Table 6: Consumer Customer access to channels at Period 3 Experienced Users Regular Wireds Deal Seekers Conservatives Bricks & Mortar 90% 90% 90% 90%Call Centre 95% 93% 92% 88%Web 71% 57% 31% 21%In general, all segments within the Consumer market have very high accessibility to the Bricks & Mortar channel and the Call Centre channel. The Experienced Users has quite a high access to the web (about 71%) and the Regular Wireds has an above average access to the web channel (57%) while the rest has low access to the web channel.
1. 3 PRODUCT/CHANNEL MARKET STATUS 1. 3-1 Positioning. Product Positioning For Company 1, its Basic Product seems to be positioned to be average price but come with good after sales support, with one-year return policy in place. Its Valued Product relatively cheap in the market but it has the least product range. It seems to be positioned as a cheaper lower-end Valued Product in the market.
For Company 2, its Basic Product is priced relatively higher in the market while its Valued Product is slightly more expensive but come with large product range. The Value Product is positioned as a high-end product in the market but it is not the most expensive in the market. For Company 3, its Basic Product is positioned to be one of the cheapest in the market. Its Valued product is positioned to be cheapest non-frill product in the market. For Company 4, it only offers Valued Products and it is positioned to be a mid-end product (with 100 product range) with average price in the market. For Company 5, its Basic Product is positioned to be the cheapest through its online trade channel but is priced higher in other channels.
Its Valued product is the among highest-end product (with 250 product range available) and it is the most expensive. It is positioned as a premium product with good after sales support. b. Channel Positioning For Company 1, its Bricks & Mortar channel is the second largest (with 160 outlets) selling both Basic and Valued Product. For its Call Centre, it is run using Advance IT system, selling both Basic and Valued Products. Its Online Trade channel is using advance system selling only Valued Product.
For Company 2, its Bricks & Mortar is the largest (with 330 outlets), selling both Basic and Valued Products. Its Call Centre is using Advance IT System, selling both Basic and Valued Products. For Company 3, the Bricks & Mortar has 150 outlets selling only Basic Product. Its Call Centre, supported by Advance IT System, offers both Basic and Valued Products.
Its Online Trade For Company 4, it has the smallest Brick & Mortar outlets selling only Valued Product. Its Call Centre is being supported by the Advance IT system. However, its Interactive Web channel is currently using only basic system. Its online trade channel is using advance system. For Company 5, its Call Centre is supported by Advanced IT system selling both Basic and Valued Products. The Interactive Web channel is using advanced system and sells only Valued Products.
The Online trade channel is also using advance system, selling only Basic Products at this moment. 1. 3-2 AWARENESS AND PURCHASE Intent. Product Awareness. 1 Business Segments The product awareness for the Business market as at Period 3 is shown in Table 7 below. Table 7: Business market product Awareness at Period 3 Professionals Wired groups Outsourcers Traditionals Basic product company 1 15% 17% 53% 26%Company 2 42% 57% 40% 41%Company 3 50% 54% 63% 64%Company 5 30% 31% 31% 36%Value product Company 1 69% 69% 56% 74%Company 2 48% 35% 36% 53%Company 3 35% 50% 40% 20%Company 4 69% 65% 56% 60%Company 5 55% 59% 51% 64%a.
1-1 Basic Product For the Basic Product, the Professional is most aware of Company 3’s product (50%) while least aware of Company 1’s product. For Company 5, it is relatively low, at 30%. In general, the awareness of all companies’ basic product is not that high as well. The Wired Groups are most aware of Company 2’s Basic Product while least aware of Company 1’s product. Similarly, overall awareness is not high as well. The awareness of the Company 5’s basic product is low at 31%.
The Outsourcers are most aware of Company 3’s basic product offering while least aware of the Company 5’s basic product. The Traditionals are most aware of Company 3’s basic product offering while least aware of the Company 1’s basic product. The awareness of the Company 5’s basic product is low at 36%. For Company 5, it has been noted that the awareness of its basic product has decreased from the last period across all segments in the Business market. a. 1-2 Value Product The Professional is most aware of Company 1 and 5’s value product (at 69%) while least aware of Company 3’s value product (35%).
The awareness of Company 5’s value product is at 55%. For the value product, the Wired Groups are most aware of Company 1’s offering while least aware of Company 2’s product. The awareness of Company 5’s value product is at 59%. The Outsourcers is most aware of both Company 1 and 4’s valued product and least aware of the Company 2’s value product. The awareness of Company 5’s value product is at 51%. The Outsourcers is most aware of Company 1’s valued product and least aware of the Company 3’s value product.
The awareness of Company 5’s value product is at 64%. The awareness of the company 5’s value product has increased across the board over the three periods. a. 2 Consumer Segments The product awareness for the Consumer market as at Period 3 is shown in Table 8 below. Table 8: Consumer Market Product Awareness at Period 3 Experience user Regular wired Deal seekers Conservative Basic product Company 1 23% 29% 31% 33%Company 2 41% 37% 36% 35%Company 3 55% 61% 64% 67%Company 5 30% 31% 31% 32%Value product Company 1 55% 56% 57% 59%Company 2 44% 46% 48% 52%Company 3 24% 19% 17% 11%Company 4 55% 58% 60% 61%Company 5 46% 49% 51% 51%a. 2.
1 Basic Product For the Basic Product, the Experienced User is most aware of Company 3’s product (55%) while least aware of Company 1’s product. For Company 5, it is relatively low, at 30%. In general, the awareness of all companies’ basic product is not that high as well. The Regular Wireds are most aware of Company 3’s Basic Product while least aware of Company 1’s product.
Similarly, overall awareness is not high as well except for Company 3. The awareness of the Company 5’s basic product is low at 31%. The Deal Seekers are most aware of Company 3’s basic product offering while least aware of the Company 1 and 5’s basic product. The Conservatives are most aware of Company 3’s basic product offering while least aware of the Company 5’s basic product. For Company 5, it has been noted that the awareness of its basic product has decreased from the last period across all segments in the Consumer market. a.
2. 2 Value Product All segments in the consumer market are most aware of Company 4’s value product. Only the Experienced Users are also equally aware of Company 1’s value product in addition to Company’s 4. All segments in the consumer market are least aware of Company 3’s value product. For Company 5, the awareness of its value product has increased over the three periods across all the segments in the consumer market. The awareness ranges between 46% to 51%.
b. Channel Awareness. 1 Business Segments The channel awareness for the Business segment is shown in the Table below. Table 9: Business market channel awareness in Period 3 Professionals Wired groups Outsourcers Traditionals Brick & Mortar Company 1 22% 25% 28% 65%Company 2 22% 25% 29% 58%Company 3 28% 32% 34% 45%Company 4 4% 5% 5% 7%Call centre Company 1 39% 56% 58% 43%Company 2 59% 55% 42% 35%Company 3 33% 40% 65% 48%Company 4 31% 52% 40% 49%Company 5 46% 49% 34% 60%Web Site Company 1 35% 16% 15% 7%Company 3 44% 56% 26% 13%Company 4 59% 34% 34% 26%Company 5 47% 47% 49% 43%For the Bricks & Mortar channel, all segments except the Traditionals are most aware of the channel operated by Company 3. The Traditionals is most aware of Company 1’s Bricks and Mortar outlets. All segments are least aware of Company 4’s Bricks and Mortar channel.
For the Call Centre, the Professionals are most aware of Company 2’s Call Centre, Company 2 for Wired Groups, Company 3 for Outsourcers and Company 5 for the Traditionals. For the Web site, the Professionals are most aware of Company 4’s web site, Company 3 for the Wired Groups and Company 5 for Outsourcers and the Traditionals. b. 2 Consumer Segments The channel awareness for the Consumer segment is shown in the Table below. Table 10: Consumer market channel awareness in Period 3 Experience user Regular wired Deal seekers Conservative Brick & Mortar Company 1 37% 44% 48% 53%Company 2 34% 42% 46% 52%Company 3 33% 41% 44% 49%Company 4 4% 5% 5% 6%Call centre Company 1 30% 33% 33% 31%Company 2 47% 38% 34% 28%Company 3 33% 40% 41% 39%Company 4 39% 48% 51% 56%Company 5 36% 45% 49% 55%Web Site Company 1 20% 14% 10% 6%Company 3 35% 24% 19% 10%Company 4 34% 27% 23% 15%Company 5 43% 37% 32% 23%For Bricks & Mortar channel, all segments within the Consumer market are most aware of Company 1 while least aware of Company 4’s channel. For Call Centre, all segments except the Experienced Users are most aware of Company 4.
The Experienced Users is most aware of the Company 2’s Call Centre. For the Web Site, all segments are most aware of Company 5. However, the awareness for web site for all companies are relatively low, not more than 50%. c. Purchase Intent c.
1 Business Segments The percentage of the Business segments intending to buy in the Channel, Basic Product and Value Product as at Period 3 is shown in Table below. Table 11: Business percentage intending to buy in Channel, Basic & Value Product Company 1 Company 2 Company 3 Company 4 Company 5 Bricks & mortar Professionals 37 51 55 39 47 44 32 45 0 39 0 45 N/A Wired groups 42 59 51 44 52 33 36 52 0 44 0 37 N/A Outsourcers 33 67 46 35 58 21 28 60 0 34 0 27 N/A Traditionals 52 49 56 54 45 47 47 42 0 55 0 48 N/ACall Centre Professionals 52 53 56 45 51 44 42 49 57 49 0 48 59 48 23 Wired groups 51 61 52 43 57 33 41 57 56 48 0 40 58 54 17 Outsourcers 53 70 48 46 65 21 43 67 55 49 0 31 59 60 11 Traditionals 47 51 57 40 49 47 39 46 57 46 0 50 58 47 24 Interactive Web Professionals N/A N/A N/A 19 0 49 35 0 22 Wired groups N/A N/A N/A 19 0 43 37 0 17 Outsourcers N/A N/A N/A 19 0 35 34 0 11 Traditionals N/A N/A N/A 19 0 51 39 0 24 Online Trade Professionals 51 0 57 N/A 39 50 54 51 0 60 51 51 0 Wired groups 41 0 53 N/A 31 59 53 41 0 57 41 58 0 Outsourcers 61 0 50 N/A 47 70 51 61 0 53 61 67 0 Traditionals 18 0 58 N/A 11 47 55 18 0 61 18 49 0 N/A: Not Applicable Looking at the purchase intent of all the segments through the Company 5’s Call Center, it is noted that there is a relatively high intention to purchase Basic Product through this channel. The purchase intent through the Company 5’s Call Centre, is in fact, the highest among all the companies. For the Web Site, it is noted that the purchase intent of all the segments is lower than through the Call Centre.
The purchase intent for the Value product through the Company 5’s web site is low (ranging from 11% to 22%).
For the Online Trade channel, all segments except the Traditionals have relative high intent to purchase the Basic Products through this channel. The Traditionals has low intention to purchase through the online trade channel. c. 2 Consumer Segments The percentage of the Consumer segments intending to buy in the Channel, Basic Product and Value Product as at Period 3 is shown in Table below. Table 12: Consumer percentage intending to buy in Channel, Basic & Value Product Company 1 Company 2 Company 3 Company 4 Company 5 Bricks & mortar Experience user 38 0 50 40 46 50 33 44 0 39 0 46 N/A Regular wired 41 0 43 43 53 39 36 53 0 43 0 36 N/A Deal seekers 32 0 36 33 60 27 26 63 0 33 0 24 N/A Conservative 51 0 48 52 49 46 45 47 0 53 0 42 N/ACall Centre Experience user 52 0 52 45 50 55 42 48 0 49 0 49 59 47 24 Regular wired 51 0 45 44 58 46 41 59 0 48 0 38 58 55 17 Deal seekers 54 0 38 46 68 37 43 70 0 50 0 28 59 62 9 Conservative 48 0 49 41 53 52 39 52 0 47 0 45 58 50 21 Interactive Web Experience user N/A N/A N/A 19 0 50 35 0 23 Regular wired N/A N/A N/A 19 0 42 36 0 16 Deal seekers N/A N/A N/A 19 0 33 34 0 9 Conservative N/A N/A N/A 19 0 47 39 0 20 Online Trade Experience user 50 0 52 N/A 38 0 0 50 0 56 50 53 0 Regular wired 42 0 46 N/A 31 0 0 42 0 49 42 63 0 Deal seekers 63 0 40 N/A 50 0 0 63 0 42 63 73 0 Conservative 22 0 50 N/A 14 0 0 22 0 53 22 57 0 N/A: Not Applicable Looking at the purchase intent of all the segments through the Company 5’s Call Centre, it is noted that there is a relatively high intention to purchase Basic Product through this channel.
The purchase intent through the Company 5’s Call Centre is, in fact, the highest among all the companies. For the Web Site, it is noted that the purchase intent of all the segments is lower than through the Call Centre. The purchase intent for the Value product through the Company 5’s web site is low (ranging from 9% to 23%).
For the Online Trade channel, all segments except the Conservatives have relative high intent to purchase the Basic Products through this channel. The Deal Seekers have the highest intention to purchase the Basic product through this channel. 1.
3-3 Market Share. Business Segments The Business market share per Channel and Segment at Period 3 for all five companies is shown below. Table 13: Business market share per Channel and Segment in Period 3 Company 1 Company 2 Company 3 Company 4 Company 5 Bricks & mortar Professionals 37% 40% 19% 4% Wired groups 34% 39% 23% 3% Outsourcers 43% 28% 27% 2% Traditionals 45% 39% 14% 2% Total 42% 38% 17% 2% Call Centre Professionals 26% 28% 15% 12% 19% Wired groups 30% 22% 19% 13% 16% Outsourcers 40% 13% 32% 6% 10% Traditionals 28% 15% 17% 15% 26% Total 29% 20% 19% 13% 19%Interactive Web Professionals 64% 36% Wired groups 50% 50% Outsourcers 58% 42% Traditionals 37% 63% Total 54% 46%Online Trade Professionals 23% 25% 40% 12% Wired groups 12% 47% 24% 17% Outsourcers 11% 35% 27% 27% Traditionals 13% 13% 41% 32% Total 17% 34% 33% 16%Total Business Market 29% 20% 20% 15% 15%In the Bricks & Mortar channel, Company 1 has the largest market share (42%) with Company 2 closely behind (38%).
The Company 4 has the least market share (2%).
Within each segments in the Business market, Company 1 has the biggest share in the Outsourcers and Traditionals segment while Company 2 in Professional and Wired Groups. In the Call Centre channel, Company 1 has the biggest market share (29%) but Company 2, 3 and 5 are not far behind (20%, 19% and 19% respectively).
There is no company dominating in this channel. Even within the segments, there is no company that dominates the channel at this moment. In the Interactive Web channel, both Company 4 and 5 share the market, with a market share of 54% and 46% respectively. Within the segments, Company 4 has a bigger share in the Professional segment while Company 5 has a bigger share of the Traditionals.
The other segments are almost shared equally by both companies. In the Online Trade channel, both Company 3 and 4 have the biggest share (34% and 33% respectively).
The Company 3 has the biggest share within the Wired Groups and Outsourcers while Company 4 has the biggest share in the Professionals and Traditionals segments. In overall, Company 1 has the biggest share in the Business market with 29% market share while the other four companies are not far behind.
There is no company that dominate the Business market at this moment. b. Consumer Segments The Consumer market share per Channel and Segment at Period 3 for all five companies is shown below. Company 1 Company 2 Company 3 Company 4 Company 5 Bricks & mortar Experienced user 29% 49% 19% 3% Regular wired 25% 46% 27% 2% Deal seekers 22% 44% 33% 1% Conservative 27% 46% 25% 2% Total 25% 45% 28% 2% Call Centre Experienced user 17% 34% 12% 18% 19% Regular wired 15% 25% 19% 17% 23% Deal seekers 14% 22% 25% 14% 24% Conservative 15% 17% 17% 23% 29% Total 15% 22% 22% 17% 25%Interactive Web Experienced user 52% 48% Regular wired 53% 47% Deal seekers 63% 37% Conservative 47% 53% Total 56% 44%Online Trade Experienced user 25% 46% 30% Regular wired 19% 42% 38% Deal seekers 15% 37% 48% Conservative 16% 45% 39% Total 17% 40% 43%Total Consumer Market 18% 27% 22% 15% 19%In the Bricks & Mortar channel, Company 2 has the largest market share (45%) with Company 1 and 3 far behind. The Company 4 has the least market share.
Company 2 has the biggest share in all the segments for this channel. In the Call Centre channel, there is no company dominating in this channel. Even within the segments, there is no company that dominates the channel at this moment. In the Interactive Web channel, both Company 4 and 5 share the market, with a market share of 56% and 44% respectively. Within the segments, Company 4 has a bigger share in the all segments except in the Conservatives segment. In the Online Trade channel, both Company 4 and 5 have the biggest share (40% and 43% respectively), leaving only 17% for Company 1.
The Company 4 has the biggest share for all except the Deal Seekers segment as Company 5 has the biggest share in the Deal Seeker segment. In overall, Company 2 has the biggest share in the Consumer market with 27% market share while the other four companies are not far behind. There is no company that dominate the Consumer market at this moment. COMPETITIVE ANALYSIS 2. 1 OVERALL ASSESSMENT OF EACH COMPETITOR Company 1 Company 1 is used to be a purely Bricks & Mortar, however its business is started to shift to the call center and online trade business due to part of the customers get involve in the e-business. In the pass two periods, the company upgrade its system a lot, for instance, supplier EDI, advance call center’s IT system, and online trade.
The list price of company haven’t change for both basic and value product but offers some discount on Bricks and Call center. And it’s communication budget were cut in the TV and press and put some budget in the magazine, online banner and direct mail. The company put a heavy effort in developing the Call center to compete other companies. Due to company 1 is the bricks and mortar base company, thus it’s market share is quit high. Company 2 It used to be a Bricks & Mortar, but has recognized the threat of other distribution modes and stared investing in call center channel for its consumer segment.
For the basic product, the company was decrease the price and improve its system, and service. It offers less discount in the bricks and increase the discount for call center in the consumer market. For the value product, the company improve the system and service, for instance, supplier EDI, advanced Call center IT system and 1-year return. Also increase the product range from 100 to 250.
From the data, the company has no interest to go into the I-Web and Online Business. Its investment in communication is in the Mass media and direct mail. The company is more concentrate in value product. Company 3 It has adopted a low cost strategic, selling basic product and has few Bricks and & Mortar distribution points.
The company has invested in some call center and online trade in the business market. For the basic product, the price was increase slightly but offering the same service and product. There was some rapid change for the company in terms of the product offering. The company started to provide value product in both business and consumer market, and offering big discount in call center and online trade for business product. The company put lot of investment in call center to advanced its system and also the communication budget is the higher than other competitors. Company 4 The company has been able to shift the traditional Bricks & Mortar business through its call center.
It has relatively small Bricks & Mortar channel, the company has invested in I-Web as well. The company is only concentrate in selling the value product. In the pass few period, the company started to invested the online trade and offering a relatively bigger discount in both business and consumer market. And advanced the call center IT system and online trade. From the data, it shows the company are keeping the low cost operate the business. 2.
2 STRENGTHS & WEAKENS SES OF EACH COMPETITOR Strengths Weaknesses Company 1 The customer perceived this company is very efficient. Relatively high market shares in business market. Higher business market product awareness in value product (69%).
Low market share per channel in online trade. Company 2 Owned the higher total market share. Provide the higher access to channel for both business and consumer customer Lowest retained earnings that may affect investment for future growth.
Company 3 The company has a higher business and consumer market awareness in basic product. Higher market shares per product type in basic product. Only using basic system in online trade business. Company 4 Higher consumer market product awareness in value product. Low cost operation Low market shares per market in both business and consumer market (15% and 15%).
Low market shares per channel in call center.
Low market share per segment in the total market. 2. 3 OPPORTUNITIES AND THREATS OF EACH COMPETITOR Opportunity Threats Company 1 Still have a very big market in Brick & Mortar market to expend. The company might share some of the market from company 2 due to the serious mistake in period 2. Traditional still are the bigger market segment in the future and the company holding a big market share in that segment. Call center will be the main idea for all segment groups in business market and the company are currently involve in it.
The market is shifting to the click business. Company 5 would be a main competitor in the call center business. Company 2 Deal seekers will be the bigger market segment in four years time, and the company holding the bigger market share, thus there has a potential to dominate the market. Call center will be the main idea for all segment groups in business market and the company are currently involve in it. Ability to recover from the problems caused by wrong decisions in period 2 Company 3 The company might share some of the market from company 2 due to the serious mistake in period 2.
Call center will be the main idea for all segment groups in business market and the company are currently involve in it. Its online trade faces stiff competition from other competitors. Using a advanced online trade system. Company 4 The company might share some of the market from company 2 due to the serious mistake in period 2.
Very good potential to dominate the value product of interactive web in business and consumer market. Call center will be the main idea for all segment groups in business market and the company are currently involve in it. Company 5 would be the closest competitor for the company; they are doing a very similar product in the market. 2. 4 EXPECTED FUTURE STRATEGIC OF CLOSEST COMPETITORS From the data in the report, we recognize two potential companies will be our strong competitors- company 1 and 4. Company 1 will be strong competitor in the call center due to from period 2, it spent a lot of money on development call center and IT support.
Thus, we expect company 1 will maintain the traditional business activities and develop the call center market. Company 4 is the closest competitor in the online trade and I-web markets. Company 4 currently concentrates on providing value product and offering a relatively big discount in both business and customer market. We expected company 4 will keep concentrate in the value product, however it may lower the discount and put up the product range to 250 and advance the Interactive Web system to attract more customers. As the company have a good market shares per channel in interactive web. We expected that company 4’s strategic is provide a relatively low price and same quality service as company 5.
COMPANY ANALYSIS 3. 1 FINANCIAL, COSTS AND OPERATIONS 3. 1-1 Financial Status Analysis of the financial statement (period 1-period 3) in our company have indicated the following trends: O Sales revenue has increased, by 30% and 49% per annual (Appendix 1).
In real, an average inflation rate was 2. 26% that directly impact our net profit. O Profit margin every year increases by 7.
55%, 7. 50% and 10. 17%. According to Anthony, Hawkins & Merchant (1999), a healthy manufacturing companies trend to be 8 percent in the profit margin.
As a result, our company financial status refers to a healthy company. O The resulting of earning before interest and tax has dramatically increased from 26, 921, 000 (period 1) to 50, 201, 000 (period 3).
O Due to increased a percentage of sales, overhead will require more investment on IT development. Other expenses have increased from 8, 498, 0000 (period 1) to 16, 526, 000 (period 3).
Staff has increased from 38 employees (period 1) to 84 employees (period 3).
O A lack of balance sheet provision, we cannot offer further ratios to analyze our company’s financial status.
3. 1-2 Production Cost Key point outcomes of analysis in production cost as the following: O The current cost per unit for basic product is $71. 6, $71. 4 and 73. 5 through three periods. The current cost per unit for value product is $75.
0, $76. 5 and $78. 7 (Appendix 2).
O During those three periods, our total sale volume remained between 29% and 23%. In the period 3, our value product was succeeded in selling in a call center that increased a certain sale volumes (Appendix 3).
O To improve our product range, we have been deciding expand our product range of the value product upon 250 since period 2.
O To improve production delivery effectively, our company used EDI system since period 3 that estimated cost of system is $1050 K. O An average price on basic product is 94 dollars through period 1 to period 3. Due to compete other companies and capture the deal seeker group’s attention whose are extremely price sensitive. Our company had decided to increase discounted rate to become the cheapest provider in online trade market. The price is $84. 6 in the business market, and $81.
2 for the consumer market as displayed in the following chart. Basic Product Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Price List 87 98 90 X 94 Discount rate in business market X X 12% X 10%Discount rate in consumer market X X X X 13%O Due to establish the call center market leader, the company invested more money for developing call center IT and HR. In the period 1, we spent $139 per employee in HR development. To compare period 3, we increased to $1, 000 per employee in HR development.
The resulting to balance all expenditure, our company decided to increase 12% of value product price to $140 per one. 3. 1-3 Operation costs Operation cost deals with call centres, interactive web, online trade and advertising expenditures as summary in the follow: O An average fixed cost in operating a call centre are $512 K, and average fixed cost in operating an advanced call centre IT system needs 3, 070 K. O To improve call centre service, our company increased 719 present from $139 per employee in period 1 to $1, 000 per employee in period 3.
Meanwhile, our reduce number of customer per line service from 5000 down to 4000. The purpose is to satisfy every customer quality of call centre service. O Due to our company would like to be a call centre leader, and dissatisfaction in channel and product awareness result in the period 2. Our company decided increased advertising budget to arouse market attention. The resulting in period 3, it seems to our advertising strategy effective delivery our messages to the market (Appendix 4).
O To gain the deal seeker market, the company spent $1, 000 K advertising fee in deal seekers group. To compare previous two years, this figure was higher than period 1 and 2. The purpose is to maximize market awareness. 3. 2 CURRENT COMPETITIVE POSITION Name Market Share Selling Product Price Product Range Characteristics Company 1 22% Basic & Value $87 $115 5-50 It is a typical bricks and mortar business.
As the period 2, the company decided into a call centre market, which used discounted strategy to grab the market share. The discounted range from 3% to 9%. It also will be a strong competitor in a call centre market. Company 2 24% Basic & Value $95 $125 5-250 As the period 2, the company misleading strategy. The company now is focused on the market share development.
It gives a high range of discounted rate to grab the market share back. The discounted rate between 5% and 10%. The main target groups are bricks & mortar and call centre markets. Although the company captures the biggest market share, which not equal to the profitable company (Appendix 6).
Company 3 21% Basic & Value $92 $112 5-50 The company offers the cheapest price to compete with others. The discounted rate also cheapest one in a call centre market, between 10% and 12%. In the period 3, its total communication budget was the highest. To compare our company which approximately 44 percent higher than us. However, it was second low profitable company. Company 4 15% Value $120 100 The company only offers value product in the market.
The target group covered all segments. The discounted rate from 2% to 15%. To compare our company and company 4 in online trade market, one is provided basic product, another is offered value product. But its offers discounted rate is higher than us. In the other word, such trend will direct impact our online business development. 3.
3 STRENGTHS AND WEAKNESSES 3. 3-1 Strengths Sales revenue has increased, by 30% and 49% per annual and profit margin every year increases by 7. 55%, 7. 50% and 10. 17%. The resulting will lead to more investors put more money in our company.
Meanwhile, to compare previous years and this year product awareness, it has dramatically increased. Implied our advertising strategy reach the right group. The product range is broad that will lead to more consumers’ attention. The existing online trade market, our product offers the cheapest price to compete with others. If we enforce online trade advertisement, it will help us to capture all market in the particular group. On the other hand, a call center IT system, I-web, and online trade system, which are the outstanding in the market.
In addition, our net retained earning was huge. As a result, we have capable to capture more market share. 3. 3-2 Weaknesses Although our company is still profitable, there has been concerned about the following unfavorable trends. First, the current cost per unit for basic product and value product are gradually increasing. As the experience curve effective (Flavel & Williams 1996), the production cost should be decreased.
To compare our company, the production is getting higher and higher, which from $70. 0 to $73. 5 for the basic product cost. Implied our production process or operation occur misleading. Second, from the product perception map indicated our product price is the highest.
Implied our company should very careful set up the price. Our call center service and online trade IT system may be a best company in the market, but less price attractive will reduce a number of consumers to access our channels. Final, in spite of we spent $1, 000 K in advertising to target deal seeker group in the period 2, the resulting dissatisfaction of our efforts. During two periods comparison (period 2 and 3), the deal seekers awareness drop down from 37% to 31%. On the other hand, the company spent $3, 300 K on interactive website advertising, the resulting was dissatisfied our expectation which only few percentages increased in sale volume (Appendix 3).
Implied our advertising strategy needs to re-allocate for those two advertisements.
3. 4 KEY ISSUES AND IMPLICATIONS Our company refers to e-business style. The firm within the advance IT system and effective call center operation system. Every year, our company is gradually improving in profit margin and a number of sale volumes. O Overall, our company maintains second profitable company. The potential competitor in call center market refers to company 1, and online trade competitor deals with company 4.
Both companies used low price strategy to capture market share. If our company would like cut down price to compete others, the profit margin will be reduced. As a result, the company should careful set up the product price. O In an average the business and consumer perception of our product awareness still retains low. Implied the company should re-think of advertising strategy to improve their awareness.
Although our total communication budget retains the middle position to compare others, but saving unessential advertising expenditure will increase our profit margin. O The experience curve has little match our production cost. The company should think about how to improve effect value chain. O In the period 2, our company spent approximately $3, 300 K on I-web development. But it seems to little improve in the sale volume. To compare the period 2 and period 3, I-web sale volume was gradually decreased from 225 K drop down to 194 K.
Therefore, the company should very careful re-evaluate I-web potential whether needs to invest more or stop this channel service. BUSINESS OBJECTIVES 4. 1 FINANCIAL OBJECITVESOur company is focused on an E-business development company. Today our company has expanded its marketing channels.
Our company now markets its products through call centers, online trade and an interactive website. Our company has decided not to enter the bricks and mortar territory at all because of the high initial costs, huge amount of investment required and the time required to make significant inroads in that channel. The major marketing channel, that generates the bulk of the revenue for the company, is the call centers. The call centers generate 60% of our company’s business and profits.
Our company offers both our basic product and value product through the call centers. As the call centers are very accessible and don’t involve as high costs as those associated with bricks and mortar business, it results in a significant amount of profit for the company. The company knows this fact and makes huge investments in improving the technology and systems. It also invests in its people resource and spends considerably in their training and development of their customer service skills. The interactive web is another channel, which is a significant source of revenue, which contributes towards the increase in the profitability of the company. There is a great scope for the company to grow through this channel, as there are only two more competitors involved in selling through this channel.
Therefore there is an opportunity to dominate this channel. The fact that our company was the pioneer in this field or channel of selling is an added advantage as we have the experience and know. The company also has the image of an E-business firm, which can also work in our favor. The company is therefore investing a huge part of its profits in the consistent up gradation and improvement of its technology and systems. The company only offers its value product on this channel.
The other channel used by the company to market its product is the online trade. The online trade sales supplement the company’s source of revenue. Our company has a strong reputation of support to online trade. The company offers only its basic product through this channel. 4. 2 MARKET AND COMPETITIVE POSITION OBJECTIVES The company is well poised in the market with constantly upgrading of its marketing channels.
Although the company does not have a presence in the bricks and mortar business, it has a highly efficient and accessible network of call centers. It also has an interactive website and an online trade presence to target the market segments. The company is concentrating on building its reputation as a premium company, which offers a high value product at a premium price. In the business segment, Professionals, the Wired groups and Traditionals would be our target groups. The company predicted that the Professionals and Wired groups every year will grow 10% to 20% which approximately 4 millions income. Although Traditionals have negative growth rate, the company predicted after three years, its still have 33% market share out of our total business segment that approximately $ 2.
6 million dollars. The Traditionals also are seeking best product and not so price sensitive. Overall, the company would like to be value and basic products of a premium product position in Professionals and Wired groups. The Traditionals only would like to be the basic product premium position. In the consumer segment, the Experienced Users, the Regular Wireds and the Deal Seekers would be our main target groups.
We predicted every year Experienced Users grows 20%, the Regular Wired increases 50%, and Deal Seekers rises 20% in the market demand. Total profit will reach to $9 million dollars per each year. Due to each group has own purchase behavior; the company will use a different channel to approach them. In Deal Seekers group, our strategy will focus on the low price concentration, which this group is extremely price sensitive and look for human efficient. We offer the cheapest price to compete with other competitors to maximize this group’s awareness. Thus, our company only offers the basic product to reach this group, which emphasizes on the call center and online trade development.
On the other hand, the Experienced Users and the Regular Wireds groups prefer to high end products without price sensitive, and a mixed of product differentiation. Thus, we do not offer discount price to compete others. Instead of the company focused on IT system efficient and a number of product ranges to reach those two groups. Therefore, we are planning to sell basic and value products on call center and I-web, which use a different advertising to arouse their awareness.
4. 3 CHANNEL OBJECTIVES The company has established and sticks by its decision to not enter the bricks and mortar business. It has instead decided to stay in the marketing channels in which it has already succeeded in establishing itself. The company will therefore stay on with its three marketing channels namely the call centres, the interactive web and online trade and will concentrate on improving its service and technology in these three channels. The company is concentrating on its call centers because it is the source of its 60% of business and profits. It is also the strongest human interface that the company has with its clients and customers.
Thus the company is investing a large amount of its retained earnings in the up gradation of its systems and technology in the call center. As discussion previous, the company was investing in its people resources by providing them extensive training and development. The reason behind this move by the company is that it wants to make its call centers the most efficient and courteous human interface among all its competitors. The company has also invested hugely in its interactive web channel in order to further improve its technology and systems that it uses. The company recognizes the growth prospects in this market and wants to gain an early advantage over its competitors.
The company’s third marketing channel is the online trade, which is one of the most efficient channels. The company uses this channel for its customers who are interested only in efficiency and do not care very much for the human interface. The company again has maintained the same investment like in the last business period for the development and testing of the channel. MAREKT STRATEGIES 5. 1 SEGMENTATION STRATEGIES The essential strategy of our company is to have ratio of 50% business and 50% of consumer markets. However, at all times we aim to monitor both segments of the markets in term of their sizes and trends.
Furthermore, we aim to do the same in the relevant subsections that we are targeted. We realize that the two markets are unique and whilst they may have characteristics that are similar the strategy is aimed at encompassing these unique ideals of the two markets. In targeting the two markets we further segment them thus aiming at niche markets that our competitors fail to service. 5. 1-1 Business Market In the business market we aim to target the Professionals, Wired group and Traditionals. A Wired Group is a group or corporation that are extensive users of information and telecommunications technology.
The Wired Market is a target market representing these firms. Professionals are defined as small to medium sized firms that are involved in high technology business and as a result are heavy users of technology. In targeting these sectors our main focus is purchase behavior. As previous discussion, it found that these two sectors are the main growth areas in the business markets and whilst we mustn’t forget the traditional market we find that it is declining at an alarming rate.
Whilst this is so this does not mean we will refuse service to this sector. The traditional market still represents a large component of the economy as a whole and our aim is to attack this section only with our call centers thus not encroaching on the conservatism of the “old economy.” As for the main sectors that we are targeting our strategy is to penetrate the market with our entire armory that comprises of the call center, on-line trade and interactive web. The reason behind targeting these three specific groups is. That they both have high purchasing power. Seek some form of efficiency in purchasing. Both seek products that are provided by our firm; .
Wired Groups – Basic Product. Professionals – Value Product. These two key groups make up a high percentage of the market. Both represent growth markets. Wired Groups – Growth Rate 20 %. Professionals – Growth Rate 10 %5.
1-2 Business Market Projections The business market is experiencing rapid change. Our five-year analysis indicates some surprising change as indicated by the following graph. From the above graph we can see that the traditional business’ or the “old economy is dying at a rapid rate. On the other hand wired groups, out sources and professionals are moving in the opposite direction. It is imperative that we are able to concentrate on enhancing our position with all three sectors, however, at present our five-year strategy is to aggressively attack wired groups and the professional market as penetration into out sources market is limited. 5.
1-3 Consumer Market The consumer market is a vast market and in order to be effective in this market it is essential to target a sector. There are three elements to the consumer market; . Experienced Users. Regular Wireds. Deal Seekers Experienced Users are those consumers that are advanced users of technology as a result they have a need for products produced by a high technology firm like ours. This sector is the most likely sector to understand our selling methods sold by a high technology firm.
It is important to note that whilst our firm may operate as an E-Business the essential product may not be a high technology product. Regular Wireds are general people who do not really enjoy technology as such but see technology as a way to reduce time at work and as a result increase their leisure time. These people are able to access the Internet and are comfortable enough to do shopping on-line. As a result they are a burgeoning market and currently represent 10 % of the market with a growth rate of 50 %.
Deal Seekers are average working class families “seeking the best deal.” They are not that computer literate but are keen to learn if it is cost effective. The deal seekers represent the largest component of the consumer market. Since they are keen given price constraints. As a result, they represent the largest sector of the consumer market. It is imperative that whilst other firms may seek to target the experienced users and regular wireds that this sector is not left out. Market research indicates that deal seekers have a current comprise of 7 million users in a consumer market consisting of 15 million representing 46 % of the total population.
Further to this, deal seekers have a growth rate of 20 %. 5. 1-4 Consumer Market Projections The following diagram indicates a five-year projection of all four-consumer groups. From the above graph we can see that whilst experienced users represent the largest sector to use on-line purchasing; they do not represent a large enough market to actually sustain a 100 % on line firm. Deal seekers, on the other hand represent a bulk of the market and once they are aware of the benefits of on-line purchasing will be firmly entrenched in “seeking” better prices on-line. Our graph indicates that deal seekers will grow from their current level of 7 million to 17.
4 million (given current growth rates).
This increases their overall market share from 46 % in year 1 to 50 % in year 5 reaching their peek of 52 % in year 3. Regular Wireds are also a very strong sector to target. They currently have a 10 % market share, however their growth rate of 50 % increase their share to 32 % by year 5.
The pinnacle of our strategy is that, by emphasizing on these two key components of the consumer market now, we will be able to develop a reputable on-line firm with established links within the market that our competitors will miss out on. 5. 2 CHANNELING STRATEGIES At present, there are three distribution channels available for market penetration; they comprise of traditional bricks and mortar distribution, call centers and web or on-line sales. 5. 2-1 Bricks and Mortar Our firm is an online firm as a result we aim to minimize costs by having little or no overheads. Thus, our ethos prohibits us from expending upon shop fronts.
Our five-year plan is based on increased knowledge of people shopping on-line. As users become more comfortable, they will deviate away from regular shopping methods. The fact that our product is available in other stores allows them touch the product and feels it. Those customers that are able to purchase directly without this need would log on or ring our call center directly.
However, those that have a need to touch the product could go into any department store and try it out first then use our call center facilities or log on and purchase on line. 5. 2-2 Call Center The call center is the human touch for our firm both in terms of direct tell-sales and for on-line transactions. It allows customers to actually speak to some one for any reason at all. As our business is essentially a clicks business, there is not much human interaction between the company and its clients. The call centers also represent 60% of business that our firm does.
Thus, our company realizes the importance of development of this aspect of our business. Our firm has invested largely in our call centers for upgrading the systems and getting the best technology. The investment also goes into the training of our human resources at these call centers. This is done to assure efficiency and best service possible provided to the customers.
As the call center have high accessibility and convenience attached to them, our firm had decided to offer both basic and value products through this medium. In case of the business markets, the basic product is offered to the clients at a discount of 5% whereas there is no discount offered with the value product. We do this because we are concentrating on our value product and the fact that we are aiming to be a premium product company our offering our product at a premium price. The discount is offered on the basic product for the clients like the wired groups who are price sensitive. In the case of the consumer market, again our firm offers both the basic and value products to the target group. The pricing strategy again remains the same i.
e. the basic product is offered to the consumers at a discount of 5 % and there is no discount offered with the value product. We adopt this strategy with this market because here we are targeting the basic product at the Deal Seekers. As this group is very price sensitive, we expect the strategy of offering a discount on our basic product to be appealing to them. The strategy of not offering a discount on the value product is the same as given in the business market. Another major inclusion in the strategy, in this channel, is that our firm now offers after sales support to the consumers of both the business and the consumer markets.
This will encourage the customers to trust the company and at the same time enhancing the company’s image of being a premium company. 5. 2-3 Interactive Web Our firm’s interactive web site is one of the best as compared to our competitors. We have decided to press on the advantage of our being the first and among the few of our competitors in this field by increasing our investment and thus to increase the development and testing of our systems and technology. In the case of the business market, our firm has decided to only offer our value product via this channel.
This decision is the result of the fact that the clients targeted by our firm in this sector are Professionals who are high users of technology and have the strongest buying power. The other segment targeted by our firm are the Wired groups who seek efficiency in purchasing which we can offer through this channel. Our firm has also decided to discontinue offering discounts for the product to improve our image as a company offering premium product at a premium price. In case of the consumer market, we again offer only the value product at no discount. This strategy is adopted in tune with the target market.
The people in this segment (Experienced Users) are the ones that have the purchasing power but don’t have time to shop and prefer efficiency in purchase and are high users of technology. Thus, they are more likely to use this channel to shop. Our firm has decided to offer after sales support in this distribution channel as well. The customers shopping on the interactive web have.