Market Analysis Vocab

 industry-

a collection of businesses with a common line of products or services

value chains-

the distribution channel through which a product or service flows from the producer to the customer

carrying capacity-

the ability of industry to support new growth

Complexity-

the number and diversity of contacts with which you must deal. In business, firms that operate in complex industries have more suppliers, customers, and competitors than firms in other industries

Market-

a group of people or companies who have a demand for a product or service and are willing and able to buy it

 target market-

a specific group of customers whom a business wishes to reach

market segmentation-

the process of grouping a market into smaller subgroups defined by specific characteristics

How are consumer markets segmented?-

- Geographics

- Demographics

- Psychographics

- Buying characteristics

industrial markets-

a group of customers who buy goods or services for business use

market research-

the collection and analysis of information aimed at understanding the behavior of consumers in a certain market

What are some types of market research?

        a. Exploratory research- know very little about the subject

        b. Descriptive research- look at status and connect to how it will be positioned in the market

        c. Historical research- study the past and how things will be perceived in the market/ compare previous market growth

Focus group-

a group of people whose opinions are studied to determine the opinions that can be expected from a larger population

What are the five steps in the research process? (be sure to define secondary data and primary data)

Step 1: Identify your information needs

Step 2: Obtain secondary data

·       Secondary data- information that has already been collected by someone else

Step 3: Collect primary data

·       Primary data- information you collect yourself

Step 4: Organize the data

Step 5: Analyze the data

What are industry forces that affect your business?  

Barriers to entry, Threats from substitute products, sources of supply, buyers’ ability to bargain, and technology

brand loyalty-

the tendency to buy a particular brand of a product

What are industry demographics?

Basic characteristics or demographics. These include the number of companies, annual revenues, and average size of the companies by number of employees.

market share-

a portion of the total sales generated by all competing companies in a given market

niche-

a small, specialized segment of the market based on customer needs discovered in market research

market positioning-

the act of identifying a specific market niche for a product

competitive advantage-

a feature that makes a product more desirable than its competitors

customer profile-

a complete picture of a venture’s prospective customers, including geographic, demographic, and psychographic data

Questions to ask yourself when creating a customer profile

1.      Who are my customers?

2.      What do they generally buy, and how do they hear about the products and services they buy?

3.      How often do they buy?

4.      How can my products or services meet their needs, or what value can I provide?

customer needs analysis-

a study that pinpoints the features and benefits of goods or services that customers value

What are several ways to forecast a demand figure?  

Use analogous products, interview prospective customers and intermediaries, and go into limited production to test the market.

project-

predicting the demand for your product or service based on demand for another one