What need(s) do you plan to satisfy for this customer?

4-2. Step Two: Market Analysis

How large is the total addressable market (TAM) for your prod.

uct or service? How did you arrive at this figure?

How large is your served available market (SAM)? How do you

know?

Which segment of this market do you intend to target? Why?

large is the segment?

Describe your segmentation method. Why did you choose this

method?

4-3. Research can give you a great deal of information, but you wil

have to use your math skills to make it more useful. For example,

imagine you are interested in opening a dog-care service and you

have gathered the following facts:

In 2010, the U.S. Census Bureau estimated that there were 2.55

people per household.

According to your city's public records, the population of your

community is 80,000.

The U.S. Pet Ownership & Demographics Sourcebook* estimals

that the number of dog-owning households in a community

equals 0.361 multiplied by the total number of households.

The Sourcebook also estimates that the number of dogs in

a community equals 0.578 multiplied by the total number of

households- or 1.6 multiplied by the number of dog-owning

households.

Calculate:

a. The number of dog-owning households in your community.

b. The number of dogs in your community. Round your answers

off to the nearest whole number.

4-4. Analyze and describe what you would expect the target market to

be for a single-seat hybrid automobile that gets 120 miles per gal-

on according to the demographic, psychographic, and behavioral

segments. Consider such factors as gender, age, marital status,

occupation, household size, household income, interests, and

beliefs about global warming, gasoline prices, and the like. How

might you determine this?

45. Choose five people from your market segment to research with

a survey. Write 10 questions in a scaled format and ask the sur-

vey participants to frame their responses on a scale of 1 to 5 or

design your own range. Also ask five open-ended questions to

test your customer and product hypotheses (questions that can-

not be answered with a yes or no or scaled response). Was one

type of question more valuable to your research goals than the

other? Why or why not? Which question yielded the most useful

responses?

Key Concept Questions

4.6. Which four factors should market research include, and why?

4-7. Write a positioning statement for your business, or one that you

can envision, using the format provided.

4.8. Assess where you think your product or service is in the product

life cycle. Where is it, and why did you reach this conclusion?

Remember that while your company may be in its infancy, the

product/service or industry may be in maturity or decline.

4-9. Read and interpret the chart in Figure 4-2.

a. Which single provider has the largest market share? What is the

percentage?

b. What share do the two largest suppliers enjoy together?

c. How much bigger is IBM's share than Apple's?

d. If there are approximately 100 other smaller makers of personal

computers, about how much market share would each have on

average?

Critical Thinking Exercises 4-1. Step One: Customer Analysis Describe the typical consumer your business plans to tarcat