Wednesday, April 16, 2008

biz plan contd

Section III Marketing

this section is in two parts: Section A is all about Research and Analysis .

you try segmenting your market, ie from the universe, you try and arrive at your potential market. typically for a marketer, potential market refers to that segment of the population which has the money to buy your product, is willing to buy your product and has access to your product. eg blackberry. this product's potential market is corporate executives and professionals who are on the move, who have to remain in touch, who can afford it because the price is not a factor at all, considering the convenience (in many cases, the company may provide it) and have access to it.

Available market, on the other hand is that segment of the population which has money, is willing to spend, but is denied access to the product. eg for the new pub in town, everyone who likes drinking draught beer is potential market. but youngsters under 18 years of age, even though they may have the money and may be more than willing, law denies them access on account of their age.this constitutes available market. and this market is as important to the marketer as it constitutes future potential market.

notionally, everyone who has money, is willing, and has access, is your potential customer. but it is not necessary that someone having all three will become your customer. eg bajaj pulsar motorbike. considering that it costs 50-60k , it would be fair to say that the potential market is young urban, educated men who have just started working, who are earning well enough to be able to afford Pulsar and who are consicous of making a style statement.

but not all men who fit this profile will actually buy Pulsar for the simple reason they may decide to buy a car instead on the grounds that it is unsafe to ride two-wheelers in traffic-congested cities. the target market for Pulsar therefore would be those who have money, are willing, have access and will buy.

it is therefore very important in the biz plan to segment the market in terms of three things:
potential market
available market
target market

Next is about the marketing environment. who are the players in the market, are you a prime mover, in which case your marketing communication has to not only talk about your product's value proposition but educate the market in terms of the concept itself. eg when sanitary napkins were launched in india. not only was there a need to elucidate product QSP (quality, service, price) but also address the issue of why a sanitary napkin was better than the conventional cloth.

an analsyis of the marketing environment will give you an idea about how big is the market likely to be, what can you expect realistically your share to be, and going forward, what the market trends will be. in technology products, for instance, the shelf life of the product tends to be limited and changes in technology makes the product obsolete and to remain in the market, constant innovation would be imperative for the marketer. eg mobile phones.

Market segment, size, share, marketing environment analysis, - all these have to be determined thoroughly well before launching the product. Large organizations have their own market research agencies or captive resources to conduct necessary market research. smaller companies, particularly start-ups will obviously not have such luxuries and can outsource market research.

the latest trend has also been involving market research agencies right at the product development stage so that customer feed back can be incorporated on the drawing board itself and product tweaked to suit customer requirements. the launch of divya bhaskar newspaper in ahmedabad is a good example of this. the dainik bhaskar group which owns this product decided on a census survey and the product, including its pricing, look, and feel, was the result of customer feedback. the idea bechind the census survey was to rule out any possibility of error as the newspaper market in ahmedabad was a well entrenched one with very strong dual players. interestingly, the marketing department had predicted that on the first day of the launch, they would be able to sell 250,000 copies and their homework was so thorough they actually sold 251000 copies!!!

in my next blog we will address Section B under Marketing.

1 comment:

  1. Hello Prof Nandhini Vaidyanathan,

    This is one area that needs to be demystified. There appears to be no fool proof way of writing an effective business plan..