External Environment demand of commodity n n Consumer

External Environment – demand of commodity n n Consumer Analysis - Identifying consumer needs - Market segmentation - The buying process Analysis of Competitive Environment - Market Structure - Basis of competition - Institutional Constraints

Consumer Analysis n Identifying consumer needs - expressed as preference for product ‘s taste, smell, color, texture, and appearance - needs relate to nutritional requirements and appetite satisfaction - social status - usage conveniences as packaging or cooking ease

Consumer Analysis n Market Segmentation - divide consumers into groups or market segments - geographic location (regional taste) - Age, sex of consumers - income - domestic and export consumers - end users (industrial, institutional, end consumers)

Consumer Analysis n The buying process - who decides to purchase the product - (where to direct promotion) - (consumer and buyer may not be the same) - How they decides - (planned purchase – for expensive items – greater information for consumer – sales advice) - (low price items – impulse purchase – product display and packaging) - when and where they make the purchase - frequency and seasonality - (inventory management)

Analyzing the competitive environment n Market Structure - identification of competitors (present and future) - numbers, product, location, sale volume, and market share - positioning of the product at a competitive advantage

Analyzing the competitive environment n Basis of competition - price - product quality - service

Analyzing the competitive environment n Institutional Constraints - economic, political and legal - Tariffs (export and import competition) - import quotas, export incentives - sanitary standards - subsidies - licensing

Salient point for analysis n n Who are the potential consumers? - socio-economic, cultural and demographic characteristics? - market segments? - positioning options for the product? Why would they buy the product? - reasons for purchasing? Sustenance? Sensory appeal? Status? Necessity? - implication for marketing plan?

Salient point for analysis n How would they buy the products? - Decision making unit? - Impulse or planned purchase? - Purchase frequency? - Seasonality? - Purchase location? - Implications for marketing plan?

Salient point for analysis n What is the product’s market structure? - Existing competitors? - Role of substitutes? - How many competitors? - Location relative to market and supply? - share of sales, market - Change in market share over time?

Salient point for analysis n What is the basis of competition in the industry? - consumer price sensitivity? - consumer sensitivity to quality? - Extent of entry barriers from economies of scale? Capital requirements?

Salient point for analysis n How do institutional constraints affect the competitive environment? - tariffs? Quota? - sanitary standards? - subsidies, licensing?