Thumbnail Image

Market evaluation: a systematic approach: frozen green sprouting broccoli

Sheppard, R. L.
Discussion Paper
Fields of Research
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.