Chapter-2

MARKET SENSING:Generating and Using

Knowledge about the Market

Submitted to: Prepared By:Dr. Naresh Patel Jigar Sharma (1222)

Hiren Sonara (1223)Mrugesh Panchal(1235)

Market sensing

• Process of gathering knowledge of market place.

• Enables firm to formulate, test,revise,update,refine market view.[represents how market works.]

• Inform & guide decision making.

Aspect of market sencing

• Defining market

• Monitoring competition

• Accessing customer value

• Gaining customer feed back

DEFINING MARKET

fundamentals.• Market segmentation.

• Determine market segment of interest.

Market segmentation

• Criteria1. Measurable2. Profitable3. Accesible4. Actionable• Bases of segmentation.1. Conventional base2. Progressive base

Conventional base

• Industries• customer size• Customer behavior• geography

Progressive base

• Application• Customer capabilities• Customer business priorities• Usage situation

Determining market segment of interest

Market size & growth-market potential-total market demand

• Estimate market potential;-build up method-chain ratio method-index method

Contd..

Sales & profit potential• Sales potential

• Sales forecast.

Monitoring competition

Why need to study?

• Business marketing is the process of understanding, creating and delivering value.

• Customer judgment about the value of firm take place within the market offerings from other firms.

A framework for competitor analysis

• Future goals • Assumptions• Current strategy• Capabilities

Improving monitoring performance

• Competitor intelligence systems - the intelligence pyramid• Benchmarking • Time lining

Assessing customer value

“ everything is worth what its purchaser will pay for it” – publilius syrus

Value assessment methods

• Internal engineering assessment • Field value-in-use assessment• Indirect survey questions• Focus group value assessment• Direct survey questions• Conjoint analysis• Banchmarks

Customer Value Management

• Two goals:– Deliver superior value to targeted market

segments and customer firms.– Get an equitable return on the value delivered.

Customer Value Models

• Estimates of what a present or prospective market offering is worth in monetary terms to targeted customers relative to the next-best-alternative offering for those customers.

• “Data heavy” and “assumption light”

Customer Value Management Process

1. Translating business issues into projects2. Customer value workshop3. Customer value research4. Constructing a business case for change5. Value realization

1. Translating business issues into projects

• Pilot program:– Scope of project– Definition of success– Composition of the team

2.Customer value workshop

• Two-three day session• Practice of building customer value models– Define the value elements for their project– Determine next-best alternative to market offering– Decide which customers to invite to participate in

the customer value research– Create work plan for accomplishing the project.

Cont…

• Point of Parity:• Point of Difference:• Point of Contention:

3. Customer Value Research

a. Gaining initial customer cooperationb. Gathering the datac. Analyzing the data

4. Constructing a business case for change

• What specific actions does the team recommend based on its customer value research?

• What resources would be needed?• What would be the profitability impact?

5. Value Realization

• Value models as sales tools:– Value case histories: written accounts that

document the cost saving or added value a customer firm actually received from offering

– Value Calculators: spreadsheet software application that salespeople or value specialist conduct to demonstrate the value.

GAINING CUSTOMER FEEDBACK

• Why customer feedback?– Enable the firm to know how well it has fulfilled its

promises to customers.– Where supplier’s offerings provided the

functionality and performance customer expected. and where they did not.

– Gives early warning of changing customer requirements and preferences.

Kinds of customers

• New Customers• Established Customers• Stop doing business with supplier

Kinds of customer feedback

• Customer satisfaction measurement• Customer value analysis

THANKYOU