Markets, Demand and Competition Flashcards
territorial or geographic limitations that establish the different markets
physical limits
demographic, socio-economic, ethnical and cultural characteristics. These are the reason why there are the teen market, the elderly consumer market
limits based on consumer’s characteristics
can be modified easily, and allow the market to expand by determining new product uses- baby food, baby shampoo
limits based on product use
classification of markets from a geographical point of view
local, provincial, regional, national/domestic, continental, overseas and global
markets in which transactions made at current prices imply the immediate delivery of goods and services (clothing, food etc)
present markets
markets in which contracts between two parties that commit to buy or sell a particular product (commodities if it is a tangible good) in the future are traded. Futures contracts detail the quantity, the price and the delivery date regarding the transaction. Futures contracts may be negotiated for non-differentiated agricultural commodities, minerals, financial assets and currencies (stock market)
future markets
is a natural or a legal person (businessperson, limited companies or business entities) that buys products from wholesalers or semi-wholesalers to sell them directly to the end consumer
retailer
natural or a legal person (businessperson, limited companies or business entities) that buys products from wholesalers to sell them to retailers
semi-wholesaler
a natural or a legal person (businessperson, limited companies or business entities) that buys products from manufacturers to sell them to retailers or semi-wholesalers
wholesaler
supplied by retailers
consumer markets
markets supplied by semi-wholesalers, wholesalers or manufacturer
retail markets
supplied by manufacturers
wholesale markets
supplied by wholesalers or manufacturers
semi wholesale market
are markets where consumers, i.e. individuals or families, buy, use and consume products in order to satisfy their needs and wants
consumer markets
where products can only be used and consumed once. Purchases are usually made on the basis of habit or impulse. The trade margin per unit is usually low and rotation is intensive. Distribution channels are often long and purchases are usually paid cash. Prices are crucial, especially for non-branded goods
non durable consumer market
where products can be used or consumed repeatedly or have an extended product life and are not worn out or consumed quickly. Purchases are planned and meditated. Trade margin per unit is high and there is little rotation. On the other hand, distribution channels are usually wholesalers/retailers and purchase financing is deciding factor (car, fridge)
durable consumer goods
where intangible goods are exchanged. Service hiring comes before, then service production and consumption happen simultaneously. No property and control are transferred. Though there is no physical distribution, there is indeed a distribution channel. Hiring is rational and planned instead of emotional and impulsive- main purchase ways by contract (phone plan), by future contract (medical services, funeral), no contract (hairdresser)
service markets
consumers are organizations buying products or services that satisfy the organization’s objectives by integrating them in the company’s productive process or by re-selling them
industry markets
transform purchases into other goods
industrial consumer
re-sells or facilitates the sale of goods
industrial intermediary
buys intangible products, most of which cannot be traded (hospitals, schools)
institutional buyer
market products can be classified into
convenience goods, shopping goods, specialty goods, unsought goods
aggregate of all the consumers who have a particular need, response capability and have or may have some level of interest in satisfying such need
potential market
share of the potential market that comprises the aggregate of consumers who a particular need and response capability and want to satisfy such need
available market
the share of the available market comprising the target consumers who have all the conditions necessary to access a particular offer
qualified available market
share of the qualified available market on which a company’s marketing efforts focus or are addressed to
target market
refers to the customers in the share of the target market; that is to say, the set of clients for a particular offer
penetrated market
volume, seasonability, variability, loyalty
demand characteristics
potential, available, penetrated
demand dimension
amount, requirements, interest rate
investment levels required
qualities, the amount and bargaining power of consumers, suppliers, intermediaries and competitors; supplier and channel availability; supply and demand concentration; social, political and legal dependencies
market structure
product life cycle, sales cycle, saturation-growth rate
degree of market maturity
percentage change in quantity demanded divided by percentage change in price
elasticity of demand
potential/current demand may apply to:
- whole market, some market, individual
- particular kind of product or corporate brand
- large or smaller territory or geographical zone
- specific period of time
- end consumer demand
- all of the above
potential demand can be measured in
physical units (amount of product), monetary units (how much sold), market shares
total volume that would be bought by a defined consumer group in a defined geographic area in a defined time period in a defined marketing environment under a defined marketing program
market demand
limit approached by market demand as industry marketing expenditures approach infinity
market potential
company’s estimated share of market demand at alternative levels of company marketing effort in a given time period
company demand or market share
sales limit approached by company demand as company marketing effort increases relative to that of competitors
company sales potential
breaks past time series into four components: trend, cycle factor, seasonal factor and erratic movement. On the basis of past sales, companies try to forecast future sales. The most remarkable methods used are the moving average and the exponential smoothing
classical analysis
tries to predict the future behaviour of a time series on the basis of a mathematical model - Box Jenkins methodology
stochastic analysis
model based on company’s thorough analysis through the study of a particular industry at a given moment in time -
- threat of new entrants
- bargaining power of suppliers
- bargaining power of regular or occasional buyers
- threat of substitutes
- competitive rivalry
porter’s five forces
market structure (little differentiation, low market growth), competitor’s cos structure (high entry/exit costs), structure of consumer preferences (reduced demand, low market segmentation), number of competitors and degree of product differentiation
main factors affecting rivalry
factors within the company which impact marketing strategies, because they determine a company’s real operational possibilities aligned with the target audience’s needs that had been previously identified
internal factors
- value perceived by customers
- economic possibilities
- investments and expenditure capability
- temporary availability of resources
- cost structure and pricing policy
- break even point
- contribution margins and net margins
- overall status of product and service portfolio
- organization and corporate culture
- distribution of functions
- leadership style, forms of authority
- company’s productive capacity
- possibilities offered in training
- product compatibility
- flexibility in manufacturing
- marketing/brand position/corporate image
- market penetration
internal business environment
factors beyond company’s control that may affect its performance - microenvironmental and macroenvironmental
external factors
direct impact on a company’s exchange relationship between a company and its customers. Therefore, a company’s environment includes its suppliers, its competitors, its intermediaries and its customers
micro-environmental factors
aspects affecting the society in which a company performs as a whole, such as demographic trends, current legislation, the economic situation, etc.
macro-environmental factors
company, suppliers, marketing intermediaries, consumers, competitors, audiences
actors in microenvironment
company’s economic and financial diagnosis and control, its financial planning, its investment policy and its funding policy - short and long term financial forecasts
finance
analysis of assets, liabilities and equity of a company. It is the first step of the financial statement analysis- liquidity, indebtedness, financial independence, capitalization, asset management, etc.
balance sheet analysis
-find out a company’s real profit margin, identify aspects that require improvement to reduce costs, select from alternative suppliers, negotiate prices with buyers, create different products, calculate value,
cost factors
What is the profitability of each product?
What is the relationship between the different products?
Do these products support each other?
Do these products use all the company’s capabilities?
Is the product portfolio consistent with the business orientation?
Does the product portfolio compensate for seasonal sales of certain products?
Are products homogeneous in value for money?
Are all products in the market identified to be coming from the same company?
product portfolio analysis
brand image that consumers have of a company may limit the possibility of launching new products or services as they might be perceived as inconsistent with the company’s image. The same situation may happen to new products that target inferior market segments in an attempt to access lower income markets.
brand positioning
consider as partners in order to create and provide value to customers
suppliers
help promote, sell and distribute a company’s products to the end buyers. Distributors, physical distribution companies, marketing services agencies and financial intermediaries would make up the actors within the micro environmen
intermediates
Consumer market: individuals and households that buy goods and services for personal use
Industrial markets: manufacturers buy goods and services to be used in the manufacturing process
Distributor markets: distributors buy goods and services and re-sell them at a profit
Government markets: wherein government dependences buy goods and services to produce public services or to offer them to buyers with low purchasing power.
International markets: wherein all the buyers before mentioned, i.e. consumers, manufacturers, distributors and governments, are located in several countries. Each type of market has its own unique characteristics that should be looked into in further detail
5 types of customer market
- Financial audiences
- Media audiences
- Government audiences
- Citizen-actions audiences
- Local audiences
- General audiences
- Internal audiences
7 types of audiences
Demographic forces - age, family structure, geographic population, educational, population diversity
Economic forces- standard of living, consumer purchasing power, unemployment, income distribution
Natural forces - climate conditions, natural resources, pollution, shortage of materials, increase of energy cost
Technological forces - creates new product and opportunities
Political forces - laws, government institutions, commercial laws
Cultural forces - schools, churches, organizations, society’s perceptions and preferences
forces in macro environment
