Routes to market

Question 1

What is market saturation?

Answer 1

The national market has become saturated and
further growth is either difficult/impossible or only achievable at great expense. An example of this would be the utility markets where European companies have found the stability and centralised control of their own markets a hard environment in which to create expansion and so have moved into the less constrained UK markets in order to enable expansion.

Question 2

What are some common issues that face all models of expansion?

Answer 2

Local knowledge (Local market not been fully understood)
Culture
Distance
Time zones

Question 3

What factors should you consider when developing a new product?

Answer 3

• Does this fit with your overall strategy, including branding?
• How does this fit in the market?
• What are you going to have to spend bringing this product to market (or to maintain/change its position in the market)?
• How much money do you expect to get back, and when?
• How does this compare with other things you could be doing?

Question 4

What type of sales approach is needed for consumer products?

Answer 4

Consumer products – need to be very easy for the customer to find, because they are not going to invest much energy in researching these purchases. So it is all about fast-moving and retail.

Question 5

What type of sales approach is needed for shopping products?

Answer 5

Shopping products – tend to be more expensive, and customers spend correspondingly more time researching, so there needs to be an investment of effort from the seller in providing information to the customer, either in the shop or online or both.

Question 6

What type of sales approach is needed for speciality products?

Answer 6

Speciality products – Here the customer will expect a high degree of pre-and post-sales support from whomever is doing the selling. It is up to the supplier to ensure that whichever sales channels are used,
they provide the appropriate level of support, since this contributes to the
customer experience, and thus to the overall value-proposition.

Question 7

Spending for a new product could include what?

Answer 7

• engineers developing the product and other development costs
• market research
• costs to set up production processes
• costs (per unit) to produce product
• packaging
• advertising and other promotion
• establishing distribution channels
• costs to produce and hold stock
• training of sales people
• setting up of after-sales support and other services

Question 8

Spending for an existing product could include?

Answer 8

• engineers sustaining new product, and developing add-ons and upgrades
• market research
• costs to maintain production process
• costs (per unit) to produce and distribute product
• packaging
• advertising and other promotion
• maintaining distribution channels
• costs to hold stock
• training of new sales people
• costs of delivering after-sales support and other services

Question 9

Return on investment is determined by?

Answer 9

• price per unit
• volumes expected to be sold over an appropriate period of time,
  which depend on price
• strength of value-proposition
• competition
• prevailing economic conditions