Market Analysis For Line- And Rotation Lasers
Essay Preview: Market Analysis For Line- And Rotation Lasers
Report this essay
Leica Geosystems AG has assigned students of Babson College and FHS St. Gallen to a
J-MCFE project. This project involves a comprehensive study of both the American and German-speaking market for the introduction of alignment laser products. The teamÐŽ¦s objectives are to understand each market, outline the applications of each laser leveling devise, establish the potential market volume, and determine the price elasticity in each market.
Market Definition
Throughout the German-speaking market, Hilti is the most known and most used brand of laser levels. Its products are high-end tools that are also amongst the most expensive of all brands and can be directly compared to the LINO L2 line laser. In the American market, many brands exist, but no definitive brand can be labelled as the clear market leader. Many American brands cater the Do-it-yourselves (DIY) and are priced at a much lower price level than the proposed Leica offering. Each market possess different distribution channels with the German-speaking market concentrated upon specialty retailers and online sales while the American market focuses upon ÐŽ§big boxÐŽÐ (Home Depot and LoweÐŽ¦s) retailers, with a smaller market for specialty retailers and online sales. While substitute goods such as hydrostatic levels and string exist, lasers levels possess much greater attributes and functions and will dominate the market in the long-term.
Operational Areas
One of the main differences in the two markets is the laser preferences among craftsmen. In the German-speaking market, rotation lasers are heavily favored while in the American market line lasers are heavily favored. Craftsmen in the German-speaking markets value high-quality tools and are willing to spend more money to obtain additional functions, especially available on the rotation lasers. In contrast, American craftsmen are extremely price sensitive and are unwilling to spend extra money on products that can be substituted for tools that are less expensive, yet less efficient. While this difference is evident, the majority of craftsmen in the German-speaking and American market use their lasers for ÐŽ§building shellÐŽÐ tasks. While these craftsmen typically use their lasers for similar purposes, the German-speaking market is typically comprised of companies of 1-9 employees while the vast majority of craftsmen in the American market who use laser leveling products are employed by companies comprised of 10-49 employees. Again, similarities and differences are evident within each market and must be carefully scrutinized before laser leveling products can be introduced into each market.
Market Volume
Overall, the German-speaking market volume is projected to be approximately 1/5th the volume of the American market potential. This calculation is due to