The paper "Current and Potential Target Markets" is a good example of a marketing assignment. The first and foremost step in analyzing the attractiveness of any market target as well as the competitive position of any business is the choice of the best assessment criteria. Market attractiveness hinges on four elements: customer factors, competitive factors, and environmental factors, economic and technological factors. These factors vary from one business to another depending on what the business considers more important. Therefore, it is upon the marketer to determine factors that are most appropriate in the organization that is under consideration.
Evaluating the competitive position of business hinges on the four main factors; economic and technological factors, the present market position, distinct capabilities of the business, as well as potential synergy with various market segments. As with market attractiveness, not all of the above-mentioned factors are likely to be important when assessing competitiveness, therefore this will prompt elimination of factors that are not pertinent and retain significant factors instrumental in the achievement of its competitive position. Weighing factors to reflect on their importance The above-mentioned factors have to be weighed; this will be instrumental in determining the relative importance of the market.
The table below illustrates a hypothetical illustration of the attractiveness of a market segment to illuminate the concept of evaluating. According to the table, below market size had the highest rating, then growth rate, investment intensity, competitive grouping and then others. Attractiveness factors Rating* (1) Weight**(2) Score (1) x (2) 1 Market size 5 8 40 2 Growth rate 4 7 28 3 seasonality 3 5 15 4 Investment intensity 4 8 32 5 Access to raw materials 3 6 18 6 Competitive groupings 4 9 36 7 Industry capacity 2 6 12 8 Regulatory climate 2 7 14 Total score (out of a possible 400) 195 *rating is on a 5 point scale 5 = very attractive **Weight is on a 10-point scale 10= very important Figure 1: Adapted from Cant, Strydom, Jooste & Plessis (2009, p.
132). Assessing the current position of each target market Upon completing the assigning of weights, the manager should rate the arrangement of important factors. The weights are multiplied by the ratings assigned (1) x (2). Market attractiveness score is generated by adding the scores, for instance, in the table above a total of 195 out of 400, this makes the market unattractive. The manager can also adhere to the same method when evaluating the competitiveness of a market.
The outcome of this analysis can be depicted on the market attractiveness illustrated below. A target market located at the upper left corner of the diagram, for instance, can be ranked high, while the business can also believe that it can be competitive in the market. Competitive position Strong Medium Weak DARKER DARKER LIGHTER DARKER LIGHTER LIGHTER LIGHTER LIGHTER LIGHTER Figure 2 Projecting the future position of each target market According to Fukuta & Bai (2010), the business ought to make a prediction of how its market will appear in the next five years. This is very instrumental since the choice a certain market segment requires marketing as well as capital investment.
A market that is under consideration can appear to be appealing now, but it may become less attractive in two years time. Therefore, it is prudent for market managers to take into consideration potential changes in consumer needs, competitors, behavior as well as strategies employed and so on. Owing to the speculative environment, a number of cases can be proposed. The manager should consider the implication of the changing market on the business position, assuming that it will respond to the predicted adjustments, however without making dramatic changes in its overall marketing strategy.
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