Market evaluation: a systematic approach: frozen green sprouting broccoli
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Date
1980-12
Type
Discussion Paper
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Fields of Research
Abstract
This paper presents, in Part One, a review of some basic
marketing concepts involved in market and demand identification.
The second part of the paper applies some of the concepts to a
market evaluation of the prospects for frozen green sprouting broccoli.
Two major market types are identified. These are the consumer
and industrial markets. The industrial market can be further subdivided
into the producer and reseller markets. Each market type
has characteristics that allow it to be considered significantly different
from the other types and, therefore, requires a relatively unique
approach. The markets are described in terms of four distinct
aspects of their activity. Products, which move through these markets,
are defined as goods. These goods can be categorised into
relatively distinct groups which require dissimilar marketing
approaches. In order to identify the marketing approach most likely
to be successful, the objectives of the purchaser must also be identified.
These objectives will be fulfilled through a purchasing
organisation which carries out purchasing operations. The characteristics
of these four areas (goods, objectives, organisation and
operations) will be significantly different between the different market
types. Marketing activity can therefore be designed to take full
account of these differences and therefore ensure maximum return
on the marketing effort.
Having identified the type of market with which the marketer
is concerned and the type of marketing action indicated, the emphasis
must then be on identifying the level and type of demand likely to be
available. The objective is to measure the possible level of demand
given varying sets of circumstances related to product price, competitor
prices, promotion, quality, service, etc. Demand sensitivity
analysis can also be undertaken to determine the likely responsiveness
of the market to changes in specific variables. Demand identification must take place with two distinct time
periods in mind. A short term forecast (up to one year) is essential
for production activity decisions, while a long term forecast is
essential for planning major production facility changes. Short term,
or current, demand forecasts are often made from forecasts of
demand for particular product classes with the refinement of the
forecast until the individual product is isolated. A further method
involves assessing total market potential for a product. This involves
a review of all potential users of a product class and an assessment
of the likely share of the potential market that can be achieved.
Longer term demand assessments are most commonly made
through use of a consumer survey. Other important methods are
sales personnel forecasts, purchase of outside expertise, market
testing and statistical analysis.
The use of a marketing orientation in a competitive market
is considered essential. The design of products to meet identified
consumer requirements is the crucial element of a marketing
approach. A product orientation is not compatible with achievement
of a significant level of business success, especially in a competitive
field.
Part Two of the paper presents a report on a study of the
market potential for frozen green sprouting broccoli. The market
types identified covered the range from the consumer market through
reseller market to producer market. The major markets are the
consumer and reseller markets. A full survey of Christchurch
supermarkets was carried out in order to assess the current reseller
market position and the likely future for the product in this market.
This survey involved discussion with the supermarket frozen goods
manager and independent research into the position of frozen green
sprouting broccoli in the vegetable market area. It was assessed that a significant potential for the product exists and that current
demand from the reseller market could be stimulated through increased
promotion at a retail level.
The producer market analysis involved a review of the restaurant
trade to assess the present and likely future usage of frozen green
sprouting broccoli in this area. A significant potential demand for
the product was identified from restaurants already using frozen
vegetables and those with a high green vegetable requirement (e. g.
Chinese restaurants), especially in the period when fresh broccoli
is in short supply. As a result of the typical nature of a producer
market, expansion of sales is likely to be more difficult than in the
reseller market and careful attention will have to be paid to product
quality and supply certainty.
A very limited survey of the consumer market was undertaken.
A consumer survey at point of sale was the method employed. As
the product has only a low sales throughput at present (primarily due
to low supplies) a significant consumer representation was not able
to be obtained. No firm conclusions can therefore be drawn from
this section of the study.
Overall, a significant market potential for frozen green sprouting
broccoli does appear to exist. The major area of demand will be
from the reseller market and potential exists in the producer market
for increased sales.