Samm, Lora, and Reve.. heres a few details on market analysis. First each portion is described, and then there are a few examples on each.
3 slides should be sufficient, one on survey results, I'll email em to you tonight.
As for the marketing plan, it can be detailed, with about a page per topic..
This information is from the marketing plan pro cd. Do not use the same stuff :P
1. Market Demographics
Markets can be described in terms of geographic, demographic, psychographic, and behavioral attributes. Analyzing your market from this perspective can be a useful way to categorize what you know about the people that you want as clients and lead to identifying and confirming opportunities the market presents. You may find that your information is limited, and just capture what you know. This can also help identify areas needing additional research.
Market Demographics - Individual's preferences, and the frequency of their spending are often associated with demographic information. Demographics consider information about your market's age, gender, nationality, education, household composition, occupation and income. Are there common demographic factors that describe the people you expect to be included in your target markets?
Market Geographics - This factor address where your service receivers are physically located. A health care clinic may serve those people within a specific climate or region. If you are providing your services over the Internet, your physical location may be irrelevant.
Market Psychographics - The market can also be described in terms of psychographic information. It is more challenging than the previous categories because it is less quantifiable and more subjective. Psychographics categorize people on the basis of their lifestyle or personality attributes. For example, the lifestyles and personality attributes of people in a large metropolitan city are going to be quite different from those of a small agricultural-based community. Consider the general lifestyles or personalities that best describe your market.
Market Behaviors - Users can also be analyzed based on their knowledge, attitude, use, or response to a service. These behavioral variables may include the occasions that stimulate a purchase, the benefits they realize, the status of the user, their usage rate, their loyalty, the buyer-readiness stage, and their attitude toward the service you offer.
Document what you know about each of these areas. If you have an existing client base or previous experience with this market, think about your "best" clients. You may want to know where they live, their age, gender, occupation, what is important to them, and why they want your services. If you do not have historical information, check to see if there are resources that you can use to help you understand and describe the attributes of your market. Complete what you can and return to this section as you learn more.
For example, a market may be described in these terms:
Geographic - This Chicago suburb has a population of 65,000.
Demographic - The average income of this predominately female group is $40,000 and more, most have attended college, are between the ages of 35 and 50, and have children at or out of the home.
Psychographic - They consider time as their most limited resource and security, both physical and financial, is important.
Behaviors - After checking with people they know and trust, they choose professionals and services that have been "tested" and remain loyal to service providers. The relationship they develop with the professional is critical to a successful ongoing experience.
Examples
Market Geographics—All4Sports serves the Jackson County area with a total population in excess of 170,000 people. With a majority of participants from Medford, the program also has participation from surrounding communities, including Central Point, Jacksonville, White City, and Ashland.
Market Demographics—An estimated 45% of households in this area contain children under the age of 18. Each of these households averages 2.1 children. Therefore, an estimated 39,000 children under the age of 18 are potential All4Sports participants. This number is determined annually from grade school enrollment within the areas served. Past data indicates that the highest level of participation occurs after Grade 2. Participation begins to drop in the middle school years, with a significant reduction in participation at Grade 9. A total of 59% of the participants are male and 41% female. Boys dominate football and girls dominate volleyball. These percentages constantly change due to trends in choice of sports, other alternatives offered in the market place, and other factors impacting participation and availability of these experiences.
Market Psychographics—One of the most typical profiles of families interested in this type of program can be described by the following:
· The parent/guardian works full-time in a traditional "8 to 5" schedule.
· They have more than one child living at home.
· They are relatively active in their child's life, but feel they have limited time.
· They value the physical and social experience their child receives more than actual sports and skill-development aspects of the experience.
Market Behaviors—All4Sports continues to enjoy a positive perception within the community. Studies report solid support of the concept and purpose of the organization and an awareness of the problems inherent in a program that involves thousands of volunteers. Based on research conducted in April of 1997, more than 86% of the population in Jackson County area has some awareness of All4Sports. Most people report they are familiar with All4Sports through knowing a young person who has participated in an All4Sports program. Individual awareness levels are highest among adults in the 25-54 age range, and business owners and managers have a 93% awareness level. More than 82% of this group considers our program to have a positive influence on youth and a potential deterrent to violence and other anti-social behavior. This is one of the primary reasons people continue to support this program.
Individual Accounts - The base of individual accounts serves to offer consistent revenues for the firm. Approximately 20% of these accounts also depend on the firm for ongoing financial planning of their investment portfolios. The balance of the clients primarily look to the firm for tax planning and preparation.
Organizations of Over 50 Employees - Our most profitable business clients fall into the "over 50 employee" category. These corporate accounts generate the highest revenues on a per-hour basis and also generate revenues on the most consistent basis throughout the year. Many of these accounts are in the medical/health, dental, and lodging industries. These clients are also more likely to look to Franklin & Moore for the widest range of services the firm offers, such as assisting with pension planning and investment management services. Target clients in this category have annual sales over $3 million, operate more than one location, serve a national customer base or more, and are publicly owned.
Organizations Under 50 Employees - Organizations under 50 employees represents some of the fastest growing clients within the firm. Franklin & Moore offers attractive services that understand and meet the needs of these clients. Again, many of these clients are in select vertical markets, including medical/health, dental, and lodging industries. The key clients in this category have annual sales between $250,000 and $3,000,000, serve customers in the Southern California market, have a local or statewide customer base, and are privately owned. The long-term strategy is to grow with these clients as they expand and their needs for our services increase.
Large manufacturer corporations: Our most important market segment is the large manufacturer of high-technology products, such as Apple, Hewlett-Packard, IBM, Microsoft, Siemens, or Olivetti. These companies will be calling on Acme for development functions that are better spun off than managed in-house, for market research, and for market forums.
Medium-sized growth companies: Particularly in software, multimedia, and some related high-growth fields, Acme will offer an attractive development alternative to the company that is management constrained and unable to address opportunities in new markets and new market segments.
We focus our marketing on three types of target consumers:
1. Corporate Executives: The Bureau of Labor Statistics (http://stats.bls.gov) reports there are 14.4 million executive, administrative, and managerial employees in the United States, and that number is growing at 1.6% per year. We estimate the top 1% of that number, 144,000, as our market, and we're suggesting the number is growing at the same 1.6% annually.
2. Small Business Owners and Executives: According to the most recent data available from the Small Business Administration (SBA), there are between 13 and 16 million small businesses (500 employees or fewer) in the United States. That includes about 5.5 million employers and 11 million self-employed people. We take the top 1% of 15 million, to make our potential market of 150,000. We estimate growth at 2.5%, a composite of different sources.
3. Home Offices: According to a story in Home Office Computing magazine, there are 36 million home offices in the United States. That means a home office in 27% of the households in the country. The U.S. census reports that in 1997 there were 16 million households in this country with incomes of more than $100,000 per year. The 27% of those that have home offices are our potential market. That's 4.4 million households (of 132 million total). Our market is the top 10% of those, 440,000, which we estimate is growing at 5% per year.
4. Other: We will also sell to some buyers outside the United States and outside of these targeted market segments. We estimate 100,000 other potential customers, a number that we estimate will be growing at 5% per year.
The home offices in Tintown are an important, growing market segment. Nationally, there are approximately 30 million home offices, and the number is growing at 10% per year. Our estimate in this plan for the home offices in our market service area is based on an analysis published four months ago in the local newspaper.
Home offices include several types. For our plan, the most important are the home offices that serve as the only offices of professional firms. These are likely to be professional services such as graphic artists, writers, and consultants, also some accountants and the occasional lawyer, doctor, or dentist. There are also individuals who maintain home offices for part-time use, including "moonlighters" and hobbyists. This segment is not who AMT wishes to sell to; our marketing focus consists of professionals and entrepreneurs who maintain a full-time office. In this plan, we will refer to customers in the home office segment as HOs.
Small business in our market includes virtually any business with a retail, office, professional, or industrial location outside of someone's home, and fewer than 30 employees. We estimate 45,000 such businesses in our market area.
The 30-employee cutoff is arbitrary. We find that the larger companies turn to other vendors, but we can sell to departments in larger companies, and we shouldn't be giving up leads when we get them.
2. Market Needs
This may be the most important topic in your marketing plan. Always emphasize the market need that you seek to fill. What value are you providing? Your marketing efforts will always benefit from focusing on the benefits you are providing your community. It isn't what you do exactly, but rather, what fundamental needs you are satisfying.
Value is realized in tangible and intangible forms. Are you saving people's lives, their health, their well being, their time, effort, or money? Are you enhancing their self worth, their self-confidence, or their potential? Are you enriching their skills, their sense of security, or their self-esteem? Are you minimizing their real or perceived risks, fears, or liabilities?
Examples
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The initial reasons for All4Sports remain constant. School-sponsored sports programs are severely limited in terms of age and range of events. Based on the April, 1997 study, 59% of the people in the Jackson County area surveyed believe the public school system fails to meet their sports experience expectations. Driven by economics, most notably with the passage of state legislation limiting school funding, many sports programs have not survived increasing economic pressures on the public school system. Property tax modifications may further impede the public school system's ability to offer any more than the most basic classroom experiences.
All4Sports seeks to serve all interested children from kindergarten through high school regardless of what the school they attend offers. There are absolutely no expectations regarding skill or experience, only the desire to participate. The All4Sports program is orchestrated to make this experience as accessible and affordable as possible to this audience.
Franklin & Moore LLC provides tangible and intangible value. Our objective is to minimize the tax exposure of our clients and adhere to all state and federal tax laws. The bigger picture means that we are providing peace of mind for our clients -- they are legally using their financial resources in the most productive manner possible. We work to make the complex understandable. We act in an advisory role to our clients that will enable them to better influence and optimize their personal and/or corporate wealth. We desire to make them more money and give them a better night's sleep.
When a company, like those that are our clients, wants to open a new market, there is a temporary need for very high-powered expertise. They need to establish distribution, evaluate distributors' merits and problems, select and open new channels.
Our clients come to us for scalable, temporary expertise. They understand that our kind of expertise would be very difficult and expensive to get from full-time, permanent employees. Furthermore, their needs are temporary: the crunch is at the time of opening the new market and setting up the channel; later on it is not as important.
From the individual point of view, as managers, our clients come to us at least in part because we reduce their sense of risk in the management and politics of new market introductions. If things go wrong, they have experts to blame. If things go right, they get the credit. There's the old saying that "nobody ever got fired for choosing IBM," meaning choosing a highly respected visible source for computers. We are that kind of low-risk option for opening new markets.
Willamette gives the discriminating personal computer user, who cares about design, quality furniture, and quality of working environment, a combination of the highest quality furniture and an integration of the latest technology, at a relatively high price. Willamette provides this discriminating customer with more than a piece of furniture. We provide a quality working environment that includes the integration of technological components that generally exist as part of the executive setting. The quality of manufacturing, materials, and ergonomics found in our products serves to enhance the appearance of an executive's office atmosphere, in turn adding to their status and effectiveness as a decision maker, innovator, and leader.
We understand that our target market needs more than just office furniture. This need grew out of the special requirements of personal computing, when combined with office furniture -- keyboards at correct height, monitors at correct height, proper channels for cables, and other amenities. Our target customer wants to have all of that, plus fine furniture. There is a need for quality wood and workmanship throughout. We don't just sell office furniture, we sell design, workmanship, fine materials, and a total-quality office environment.
Our target HOs are on average as dependent on reliable information technology as any other businesses. They care more about reliable service and confidence than about the rock-bottom lowest price. They don't want to rely solely on their own expertise, so they choose instead to deal with us with our promise of service and support when needed.
Our standard HOs will be one-system installations, no networks, much more powerful systems than the average small business. Fax modems, voicemail, and good printers are likely. They tend to be interested in desktop publishing, accounting, Internet, and administration software as well as their job-specific software needs.
It's important that we realize we won't be selling to the price-oriented HO buyers. We'll be able to offer an attractive proposition to the service-oriented and security-oriented buyers only.
Our target SBs are very dependent on reliable information technology. They use the computers for a complete range of functions beginning with the core administration information such as accounting, shipping, and inventory. They also use them for communications within the business and outside of the business, and for personal productivity. They are not, however, large enough to have dedicated computer personnel such as the MIS departments in large businesses. Ideally, they come to us for a long-term alliance, looking to us for reliable service and support to substitute for their in-house people. These are not businesses that want to shop for rock-bottom price through chain stores or mail order. They want to be sure they have reliable providers of expertise.
Our standard SBs will be 5-20 unit installations, critically dependent on local-area networks. Back-up, training, installation, and ongoing support are very important. They require database and administrative software as the core of their systems.
3. MArket Trends
To describe market trends, think strategically. What factors seem to be changing the market, or changing the business? What developing trends can make a difference? Market trends could involve changes in demographics, or changes in customer needs. Much of this depends on what service you offer.
For example, a health care facility might note the trend toward an older population of aging baby boomers. A youth center might talk about the growth of gang violence. A day care center might talk about the trend towards single-parent households, or both parents working.
Understanding market trends may enable you to "get ahead" of your market and allow you to know where it is going before it gets there. Seizing a potential window of opportunity can be critical to establishing a competitive advantage. Timing is critical to any marketing strategy.
Some quick research regarding trends can be a tremendous help. Your industry's association may be able to provide information on key trends. Magazine publications that address industry issues are another potential source. Financial analysts track trends for investment purposes, and you may find this information useful. Some markets, particularly in larger metropolitan areas, have detailed market trend information that may be available through your local library or university. Remember that the Internet can be an efficient source of information for inexpensive and accurate market trend research.
Once you have acquired this information, adapt it to what you know about your target market.
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The significant market trends are as follows:
· Diminishing financial support at all grade levels form public schools to facilitate sports activities for students.
· Increasing demands from children and their families to offer sports experiences at early ages, beginning at kindergarten.
· Heightened awareness of the positive correlation with involvement in sports and reduced potential for involvement in violent activities.
· Increasing interest from corporations to sponsor and support these types of community activities when they receive attribution for this involvement.
Market trends fall into three general categories: static tax laws, increasing use of software, and key client growth.
Static tax laws — Although minor revisions have been made in past years, tax laws have not changed dramatically since 1988. This enables greater efficiencies within our firm, but reduces involvement with our clients and can result in a decrease of billable hours.
Increasing use of software — Tax software is one of our major competitors and continues to erode revenue from individual clients with simple returns. This includes products produced by Intuit with their "Turbo Tax" line and Block Financial with their "Kiplinger Tax Cut" products. Software has also been a resource to increase efficiencies within the firm. For example, we are producing in excess of 50% more work, and therefore billable hours, with the same resources we did in 1995 due to the computer systems now in place.
Key client growth — A cluster of our premier clients have experienced substantial success and growth. Meeting these client's needs will "bring us along" to offer additional services and provide an opportunity for us to strategically expand the services we offer. As we gain expertise and establish our reputation in these areas, we market those to other clients and use them as a point of interest to attract new clients. Pension planning services are one example of this phenomenon.
We stand to benefit from some specific market trends:
· There is a major trend towards internationalization. The Internet has brought a larger world into direct communication with the manufacturers. Europe has created a major new unified market, this time for real. Latin America is healthy and growing. Asia, despite recent setbacks, is still a very good market. Our potential client base, the manufacturers, wants to expand into new markets.
· Communications technology is a new industry explosion. Also because of the Internet, growth in communications technology items is explosive. Modems, network cards, communications software, routers, cables, connectors, all of these are growing at 35% per year and up. Margins aren't great in the more standard hardware categories, but growth is enormous.
· Contracting, consulting, and ad-hoc management teams are a trend. Even the larger businesses are turning more frequently to temporary expertise instead of permanent fixed cost employees. This is the latest new application of the buzzword "scalable." Acme Consulting is an especially attractive alternative to our clients, because of the economic advantages of variable vs. fixed costs, and the growing liabilities and overhead of taking on long-term employees.
Our market has finally grown to recognize the disparity between most of the standard office furniture sold through channels and our own products.
The development of the high-end office worker, office owners, and the baby-boomer executive is an important trend for us. We now have people who are using computers and also appreciate the old-fashioned workmanship of good furniture.
Today's high integration of technology in the work place, especially in the multi-task oriented, executive environment, sets the stage for growth in the area of high quality, technologically integrated office environments. Similarly, home offices and small business owners continue to demand more advanced technologies and their integration into the office atmosphere. A sense of craftsmanship and quality of materials, such as oak and cherry, is timeless. The synergy of this desire for the classic cabinet-maker look, and use of technology is inherent in Willamette's offerings.
The SB buyers are accustomed to buying from vendors who visit their offices. They expect the copy machine vendor, office products vendors, and office furniture vendors, as well as the local graphic artist, freelance writer, or whoever, to come visit their office to make their sales.
There is usually a lot of leakage in ad-hoc purchasing through local chain stores and mail order. Often the administrators try to discourage this, but are only partially successful.
4.Market growth
Use this topic to explain and discuss market growth. Is the market growing, is it static, or is it shrinking? Documented market growth enhances the implied value and potential of your organization. Ideally you will be able to cite experts, a market research firm, trade association, or credible journalists describing projected growth. This is particularly important when your plan is used to communicate with those outside the organization, such as for donors, board members, or advisors.
Cite growth rates in terms that fit the available information. Determine if growth is best expressed in the number of potential users, projected dollar funding, projects completed, website projects, tax reporting hours, or whatever best fits your organization and your audience.
Whenever you can, relate the growth rates cited in expert forecasts to the growth in potential users that you have included in the market analysis table. This will calculate total market growth over a five-year period, using the assumptions in your marketing plan forecast.
Check for reality. Are your growth rates reasonable based on the characteristics of your market? Are they believable? Can you defend them? Unreasonable growth rates can create unrealistic expectations and a marketing plan that is doomed to fail. Grossly understated growth rates may minimize the potential of our marketing plan and make this process more difficult for you next year.
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The program has experienced an average annual participation growth rate of 6% for the past five years. This is indicative of the growing needs of the market we serve. Based on school attendance projections, we expect to experience increased participation growth between 9% and 11% annually over the next three years. The most dramatic growth is expected in the soccer programs, which have an equal mix of boys and girls, with relatively static participation expected in most other sports. These trends are monitored, and to the degree possible, used to help predict future program demands.
The growth rate of our combined target markets has averaged approximately 8.6%. This is due to the growth of established businesses as well as movement into the San Clemente area. This growth rate has plateaued in the past years and is expected to remain constant for the foreseeable future.
The U.S. Association of Marketing Consultants reports a 30% growth in average revenues for consultants focusing on marketing of high-tech products. We are a subset of this market, possibly due for even higher growth than the mainstream. The local electronics industry association in California reports a trend towards additional consulting solutions, as manufacturers turn to variable cost solutions.
We talked to industry associations in Japan and several in Europe. Overall, the growth in interest for moving into new markets is phenomenal. Tahahashi Sato, director of the local association in Tokyo, told us "we don't have statistics, but the growth in new international marketing projects has to be greater than 100 percent per year." Jens Lundeson, of the Association in Europe, said "We see growth in this kind of project at 40 percent or better per year."
According to [source omitted], the market for office furniture is growing at XX percent per year, and is projected to increase. The market for PC-related office furniture is growing even faster, at YY percent per year, and is projected to top $XX billion by the year 2005.
Most important is the growth in home offices with personal computer equipment. As the cost of the computer goes down, steadily, the number of home offices goes up. According to [source omitted], this is about 33 million right now, growing at 15 percent per year. Households spent $XX billion last year to equip home offices, and 15 percent of that was spent on furniture.
Overall we see our market growing at about 8-9% per year, over the next few years, in terms of potential customers as small businesses and home offices. This is just a simple number of locations and users, however, as the more interesting growth is the continued skyrocketing growth in the user of computers in business.
The next big wave is connectivity, LANs, and the Internet. The growth figures in these areas are spectacular. According to Harper's Internet Index, there are now 57 million Internet users in the United States, and that number has doubled in two years. There are 6 million websites now, up from 100,000 in 1996.
Meanwhile, demand for personal computers continues to grow. The IDC forecast for this quarter suggests 14.1% growth in sales of personal computers in the United States, compared to the same quarter a year ago.
5. Market Analysis
This is the Market Analysis table, which you use to define your target market segments and estimate how many potential prospects are in each segment.
Although this is your plan, not ours, and you can use it as you prefer, we recommend that the market analysis focus on potential prospects, not actual prospects. For example, a potential market segment for the Sierra Club might equal the total number of charitable people in the United States; it wouldn't be limited to the people in the united states that currently contribute. You might measure it as adults, households, or households and businesses.
To manage the table, you insert rows as needed and use the Edit > Row Label command to change the names of your market segments.
The growth rate column establishes a straight-line growth rate that will be applied to the first year to create the estimated growth for future years. You can also override the standard calculations by simply typing in the market numbers you want to show for future years, regardless of growth rates.
