DR PEPPER SNAPPLE GROUP INCORPORATION
Opportunity Analysis, Market Segmentation, and Market Targeting
Thinking of energy drinks competitor they have lot of ideas and strategies made to compete they innovate their products to have a new ideal in the eyes of customer. There are 43 million energy drink users in US. they are lack of product promotion because the competitors are more well known while Dr Pepper Snapple Group Inc, before are the major energy drink they need to innovate the product like for example for the health conscious people they can make a sugar free energy drink, or for fitness. They only targeted for males and sport man while they can have an innovation of it to target female like energy diet drink to make them sexy. The important thing is to promote first the product my using social networking like facebook to get the attention of the customer , commercialize the product with the use of well known artist. Served Market Where To Compete What is Marketing Market Sales Potential and Profitability Estimating Market Sales Potential Market Sales Potential is a Quantitative Approximation of Effective Demand Maximum Level of Sales that Might Be Available to All Organizations Serving a Defined Market During a Specific Time Period Definition Three Variables That effect Market Sales Potential The Number Of Prospective Buyers Who Are Willing And Able To Purchase and Offering(B) The Quantity Of An Offering Purchased By An Average Buyer In A Specific Time Period (Q) The Price Of An Average Unit Of An Offering (P) B x Q x P = Chain Ratio Method to Create Clear Marketing Plan Chain Ratio Method Provides A Quantitative Estimate of Market Sales Potential
Highlights Factors That Are Controllable and Uncontrollable Using the Chain Ratio Method to Influence Market Sales Potential for Carbonated Cola Soft Drink Market in a South American Country Factors That Can Be Manipulated (B) Proportion of population that consumes carbonated soft drinks (Q) Availability and ease of access to carbonated cola soft drinks (P) Pricing of carbonated cola soft drinks Sales and Profit Forecasting Once one has determined a market’s sale potential and identified variables that can be manipulated to increase sales of a particular product, one needs to determine the estimated sales that can be expected from a given marketing strategy. We do this by creating a “Sales Forecast” Sales Forecast
Level of sales a single organization can expect to achieve based on a chosen marketing strategy and an assumed market environment. Sales Forecast Forecasted Sales Size Of The Target Market The Marketing Mix Chosen For The Target Market
Assumed Number Of Competitors In The Target Market
Competitive Intesity In The Target Market An Example Total Estimated Prospective Buyers Target Market (25% of Total Buyers)
Distribution/ Communication Coverage (75% of Target Market)
Annual Purchase Rate (20 Units Per Year)
Average Product Price Per Unit ($10.00) 1 Million
$10.00 37.5 Million A Disclaimer While this is an adequate example of a chain ratio method calculation forecasting sales in a particular target market, this forecast does not take into consideration the number of competitors vying for the same target market or the competitive intensity of the target market and therefore should be adjusted downward to reflect the effect of these added variables on the sales forecast. Finally A Pro Forma income statement should be prepared showing the forecasted sales, budgeted expenses, and estimated net profit. Population <8 yrs
Proportion of population that consumes carbonated soft drinks on a daily basis Proportion of population preferring cola-flavored carbonated soft drinks The average number of carbonated soft drink occasions per day The average amount consumed per consumption occasion (expressed in ounces)
365 days per year
The average price per ounce of cola-flavored carbonate soft drink. X X X X x x Market Sale Potential X X X X Chapter 4 A market can consist of prospective buyers (individuals or organizations) who are willing and able
to purchase the existing or potential offering (product or service) of an organization.
What are some examples of markets? What is a Market? Markets include mechanisms or means for (1) determining price of the traded item
(2) communicating the price information
(3) facilitating deals and transactions
(4) effecting distribution
The market for a particular item is made up of existing and potential customers who need it and have the ability and willingness to pay for it. What is a Market? Illustrates how a market is broken down into multiple markets by a marketing manager.
This enables management to more effectively pinpoint who is competing in that particular market. Market STRUCTURE The market share is the sales of the company, referring to the product, service or brand divided by the sales of the competitive market calculating as a percentage. Increasing the market share is a vital role of the company and its performance in order to remain competitive. In order to increase the market share and remain competitive company’s analysis different ways of making changes through innovation, pricing, advertising or increasing their service area. The following formula is used to calculate a company’s market share.
Company’s Sales / Market’s Sales during the selected time period Example:
A Company sells $4.5 billion a year in Soft drinks. All of the companies within the market has a total sales of $65.0 million a year.
Market share: 1.4% Market Share
The market in which a company, product, service or brand competes for targeted customers. If the marketed product is a high served market share, then gaining access to this area would be more difficult. Companies could consider targeting a low served market share and development strategies in the area to potentially increase the market share. Market targeting is a term that is used to describe the process of identifying groups of consumers who are likely to purchase a specific good or service. After a market has been segmented, a marketing manger needs to address three questions. Where to Compete
How to Compete
When to Compete Market Targeting Where to compete?
Which market segment(s)/ market targeting
– Market targeting is the specification of the market segment(s) the organization wishes to pursue. Market Targeting How many market segments the organization will pursue
How many marketing strategies to employ
How many market segments
Timing of when to pursue the market segments
– “First-to-market” posture
– “Wake-and-see” stance When to compete? Two frequently used market targeting approaches marketing.
– Differentiated marketing, the organization simultaneously pursues several different market segments, with a unique marketing strategy for each. – Concentrated marketing, the organization focuses on a single market segment. This focuses on which market segments the company should choose for marketing efforts or target marketing. Target marketing is the specification of the market segments the organization wishes to pursue and other regional competitors were targeting the improvement “do-it-yourselfer” segment. How to compete
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