Lecture 2

• Product market


  The industry in which the business operates in, and the product category in which it competes
• Product market analysis


  Seeks to gain an understanding of the trends within this market
• Factors to consider in product market analysis

  • What is the size of the product market?
  • Is it a growing product market? Stagnant?
  • What do industry reports suggest?
  • Have market segments been identified in this product market?
  • What are the demand trends in this product market?
• ACID TEST: Where is the competition primarily coming from?
• Competitors


  To be successful, a company must provide greater customer value and satisfaction than its competitors do
• Assessing the competition


  • Who are my competitors?
  • Are some more important than others?
  • The competitors need to reflect the market you have defined!!!!
  • Have you identified the correct product market?
• Sustainable competitive advantage


  Competitors do not have the same particular strength; it is a relative strength, the strength is relevant and important to customers, the strength can be sustained over the long-term
• Marketing intermediaries


  Businesses that help the company to promote, sell and distribute its products to final buyers, including resellers and physical distribution firms
• SWOT/TOWS analysis


  A summary of the external and internal situational analysis, identifying threats, opportunities, weaknesses and strengths
• Threats and Opportunities


  • Increased competition in industry
  • Growing consumer cynicism due to "greenwashing"
  • Competitive energy prices
  • Increasing demand for environmentally-friendly alternatives
  • Growing concerns for the environment
  • Consumers looking for "green" alternatives
  • Government supporting "green" initiatives
  • Economic environment
  • Consumers are looking for cheaper alternatives
  • Changing family structure
  • Declining birth rate in New Zealand
• Weaknesses


  • Lack of brand awareness
  • It is not established in the marketplace, hence it would require a strong promotion strategy
  • The product is not as convenient as traditional dryers
  • Need to communicate benefits and shift attitudes
  • Weak relationships with distributors
  • Due to being a new entrant
• Strengths


  • Innovative product
  • It protects fabric, and is cost efficient
  • Patent
  • Flexibility
  • Due to size can adapt to the market more quickly