Market Analysis, Market Segmentation Analysis, and Break Even Analysis - Case Study Example

Market analysis, segmentation and break-even analysis Introduction A marketing analysis is a study about all the issues that affect the stability of an organization. Market segmentation is the division of markets according to customers’ purchasing power and preferences about some products. My marketing analysis follows some of the basic requirements that I show in a marketing analysis request sheet. The format begins with the objectives under which the goals are identified, project details and the variables. Objectives I write to request for a market analysis because I strongly believe there are new trends in the market that need quick attention. The goals for the market analysis are: Demand The product depends on the income of the consumers. From the recent past, I can note that there has been a high demand for the product and thus need to increase the productivity. This will enable me compete for the some market space with my competitors so that I stand out to win the trust of my customers. At his very point, the marketing concept applies effectively because when I respond to demand of my customers, I am in a position to establish a positive relationship with them. It is the only way I am going to make long-term profits from the sales of my stock. Audience of the product Knowing the audience of my product will enable me make effective marketing segmentation. By this, I will be in a position to channel the right products to the right consumers. As Mr. Millar, I will segment my market into four parts: new residential, modernization, replacement and light commercial segment. This is because my company deals with different types of customers. As Millar, I will analyze all the segments to identify their needs. The new residential segment accounts for 55% of all sales. Unfortunately, I realize that this segment is very competitive and the sales can only be effective if they are done simultaneously. These are some of the problems that the Scotts Company faces. The light commercial segment will include restaurants, schools and churches. This is because they are good uses of air conditioners. As for the modernization segment, the good news is that it outshines the new residential segment. This is the where the future of the company lies and thus the appropriate segment that can be used to capitalize on the investments. Price models I know that every company has its own way of determining it prices. It all depends on the model in use. As Millar, the best price model is the Chinese feint trick. With this, the company may announce a price increment in a trade press but delay the implementation. The Scott’s company has the problem of implementing the prices immediately thus will lose its competitive advantage in the market. However, using alternatives will save the company great loses. Basing my argument on the market definition and dynamics concept, I recommend that my market share be made clear so that when am making pricing issues, I do not base on what others are offering. I know that Ben Millar is at crossroads because the company has failed to identify its market share. It is currently missing opportunities because it looks at its market narrowly. I see at tough time for the Scott’s company in future because of the competition that is currently prevailing in the market. In this case, the new residential segment will exist since very little consideration is given. What-If Scenario 1 Sales $112,000,000.00 FC Manufacturing $20,363,636.36 *Fixed Sales Force $3,000,000.00 *Fixed Communications $1,300,000.00 *Fixed R&D $1,200,000.00 *Fixed Materials $61,600,000.00 *Lowered to 55% Bottom Line $24,536,363.64 Return on Sales 21.9% Doubling of cumulative production vastly increases profitability The above table reveals that a volume of $ 61,600,000 will enable the company realize its profitability and that the sales force will give the company a good opportunity of ensuring that the sales are very high. Identifying paths to reach customer segments These paths will help my company maximize on the potential of the customers will to buy my products. To some extent, these paths will rely on how my market mix will be. This is because customers are influenced by the quality and the price of the product when purchasing products in a competitive market. The cost leverage concept is used though caution is taken to ensure that the volumes of the do not increase to the extent of affecting the profits. The modernization segment is the effective in such a scenario. A suggestion by a research magazine is that CAC sponsor a competition for distributors, dealers, and territory managers, the winners to be guests of the magazine at the Super Bowl and the Indy 500 in 1972. The cost was $70,000 a page and $30,000 per event for premiums and direct mailings for the trade. Transportation and lodging for the winners would be additional costs. With such a strategy, the company has a promising future because the costs will be distributed accordingly thus a good return on the sales. Deliverables After my market analysis, I expect quite a number of specific issues that must be identified from the research. Now that I know the types of segments in my market, I need a pricing recommendation and the sustainability models. Ass Millar, I know my company always loses its competitive advantages after making its pricing public. The Chinese feint trick model is effective only if the company does not implement its price changes immediately after making a public release. In addition, the company will have to reduce its prices as they discourage the customers in the segments from buying despite the quality. I must agree that everything evolves thus the product/market evolution concept will apply. The analysis and the segments will assure me on what type of changes I can adopt so that as the prices change due to market forces, I do not lose my competitive advantage. A good strategy for the company Branding my products will help in making quick sales, as it will win the trust of my customers. As Millar, I do not need to make new inventions unless it is necessary. Branding is a powerful way of making sales out of the products in a competitive market. My air conditioners must be unique and prove to be durable as compared to those made by my competitors. Conclusion The company has made good use of all the concepts both directly and indirectly. All the questions are tackled though not systematically but at least there is a clear indication from my marketing analysis above. Read More