Market Analysis Stratergy
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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 SEGMENTS
The 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 Businesss 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. 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
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 SEGMENTS
The 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. The profiles of the four sub-segments are shown below.
Table 3: Profiles of Consumers 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 middleclass
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
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,