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What is your understanding of Market Size ?

IN BEESTHO VILLAGE, there are 20 people who wash dishes with ash.
They get this ash from the fires that they use to cook their food absolutely free of cost.

WHAT IS THE MARKET SIZE (IN UNITS) OF DISHWASH IN BEESTHO VILLAGE? (ASSUMING ONE PERSON BUYS ONE UNIT IN ONE YEAR)

THE MARKET SIZE IS 0 !


WHY ? BECAUSE AT THE MOMENT, NO ONE IS USING DISHWASH MARKET SIZE IS DEFINED BY THE CURRENT USAGE.

WHAT IS THE POTENTIAL MARKET SIZE OF DISHWASH (ALSO KNOWN AS MARKET POTENTIAL) ?

Some tips for interviews and GDs


DO NOT JUMP THE GUN Can be dangerous. In an interview/before GD starts, ask for all information that may be required whatever need to be assumed will become clear.

COMPLETE THE SET OF INFORMATION (Given + Assumptions) before you give any answers.

MARKET SIZE /POTENTIAL

HOW MANY USE/CAN USE

WHAT FORMAT THEY USE

HOW MUCH THEY USE

TOTAL TURNOVER

Market Potential for a Product

How many Can use it (and buy it) THE PRODUCT CAN FULFIL HOW MANY CONSUMERS NEEDS
How often they can use it (and buy it)

USE TARGET SEGMENT DEFINITIONTO CALCULATE

USE CONSUMPTION OCCASIONS TO CALCULATE

CALCULATE MARKET POTENTIAL FOR

EXAMPLE
HAIR STYLING GELS What is the market potential ?

Quickly think on Segmentation Categories and Work up a TG


DEMOGRAPHIC
Male 16-25 age Disposable Income > 3-4 lakh p. a.

GEOGRAPHIC
Indian/Urban

BEHAVIORAL
Likes to groom himself Fond of partying, going out, trying new looks (uses gel in these occasions)

PSYCHOGRAPHIC
Identifies with Bollywood contemporary machismo

NOW LET US BREAK DOWN THE TG TO GET MARKET POTENTIAL


Start with population of India URBAN MALE 18 25 years of AGE Income > 3.5 lakh 1.2 billion 20% 50% 20% 10% 240 million 120 million 24 million 2.4 million

Average Consumption per month Rs 50 Total Consumption per year = 2.4 million * Rs 50 * 12

Rs 144 crore

SOAPS FOR HOTELS

SENSITIVE TOOTHPASTE

FRUIT FLAVORED TOOTHPASTE

SMART PHONES

SMART PHONES COVERS

CARS

SUVs

CAR PERFUMES

BIKES

SPORTS BIKES

BIKE HELMETS

LET US COMPARE THAT WITH MARKET SIZE


Current Market Size in India for Mens Grooming is Rs 1500 crore Hair Gel is Nascent take about 2-3%, viz 30 45 crore. Analyse 4Ps to understand why the gap between Market Size and Market Potential is there.

UNDERSTANDING MARKET SIZE AND MARKET POTENTIAL FOR A CATEGORY


EXCLUDED FROM MARKET

NO
WANTS THE PRODUCT?

EXCLUDED FROM MARKET

EXCLUDED FROM MARKET

EXCLUDED FROM MARKET

NO YES
AFFORD THE PRODUCT ?

NO YES
HAVE ACCESS TO THE PRODUCT ?

NO YES
AWARE OF THE PRODUCT?

PRODUCT
PRICE PLACE

YES

PART OF MARKET

PROMOTION

BACK TO OUR VILLAGE! WHAT IS THE MARKET POTENTIAL WHEN YOU HAVE THE FOLLOWING INFORMATION?

The price of dishwash is set as follows :


Dishwash Powder : Rs 1 Dishwash Bar : Rs 2

8 people eat their meals on Banana Leaves Out of the 12 people who have utensils, 2 people are below the poverty line cannot spend on dishwash. 20% of the population can afford to spend more than Re. 1 for dishwash.

SEE HOW THE KEYWORDS ARE IN FACT THE 4Ps


WANT Product AFFORD Price ACCESS Place AWARE Promotion

Now lets revisit the market potential thing we were doing with some information.

TOTAL MARKET POTENTIAL = Rs 12


Dishwash Bar 2 * 2 = Rs 4 Dishwash Powder 8 * 1 = Rs 8 No Market for Dishwash

BUT THIS IS NOT THE SAME AS MARKET SIZE! MARKET POTENTIAL IS What it can be and MARKET SIZE IS What it is

WHAT IS THE MARKET SIZE? (ASSUME COMPANIES HAVE STARTED DISTRIBUTING AND USERS HAVE STARTED USING)
This guy doesnt want to buy dish wash
This guy shops from a modern retail store the companies do not distribute there

This guy watches only ESPN

This guy thinks dish wash is too expensive

Market size is Rs 7. Hope you worked it out!

MARKET SHARE SAME MODEL

% MARKET WHO WANT YOUR PRODUCT

% PEOPLE WHICH CAN AFFORD / SEE VALUE IN YOUR PRODUCT

% PEOPLE WHO HAVE ACCESS TO YOUR PRODUCT

% PEOPLE WHO ARE AWARE OF YOUR PRODUCT

MS = Product * Price * Place * Promotion

THE 4P MODEL IS THE ANSWER TO ALL OF LIFEs PROBLEMS


(AT LEAST THE MARKETING ONES)

CASE (interview/GD questions) A product X is not doing well in the market. How will find out what is wrong? Answer : 4 P Analysis A Product Y has low market share how will you gain market share? Answer : 4 P Analysis A Product Z was launched and failed what could be the problem and how will you solve it?
Answer : 4 P Analysis

WHAT YOU NEED TO THINK


PRODUCT :
Is it in line with the consumer insight Is the quality right Are the functional/ Emotional Benefits relevant to consumer

PRICE
Is it too expensive Is it PERCEIVED to be expensive/cheap

PLACE
Is it available Is it Visible where available

PROMOTION
Does the communication convey the right message Does the communication ride the proper channels Does communication influence purchase

YOUR THOUGHTS - WHAT WENT WRONG? (WHICH P MIGHT BE AT FAULT? )

YOUR THOUGHTS WHICH P HAS MAXIMUM ROLE TO GROW/TAP MARKET

WHAT STRATEGY FOR WHAT PRODUCT CATEGORY ?


Anyone fond of 2 by 2s ?

NOW BACK TO THE LITTLE VILLAGE WHERE WE ARE SELLING DISHWASH


Assume we have a market share of 0% in Bars and 25% in POWDERS (We are the blue ones) What is our overall market share?
Rs 2 out of Rs 12 market = 17% share

WHAT SHOULD BE OUR GROWTH STRATEGY?


Answer : Steal Market Share Question : How ?

UNDERSTAND CONSUMERS BETTER TWEAK 4Ps - STEAL MARKET SHARE


CASE :
Insights Gathered What should you do in each case ?
Market Survey Revealed that only 5/10 people could recall our advertisement. Our RPI is 140 in dishwash bar segment (RELATIVE PRICE INDEX IS (OUR PRICE*100/AVERAGE PRICE OF CATEGORY) Out of 100 retail outlets, we are servicing 40 outlets. Our competitor powder is offering Lemon Fragrance.

LET US SAY THAT OUR AWESOME UNDERSTANDING OF 4Ps HAS HELPED US WIN 100% MARKET SHARE IN BARS and a 75% SHARE IN POWDERS.

We are now a Rs 10 business. How do we grow now ?

MARKET DEVELOPMENT IMPORTANT NOTES :


Should be done by Market Leader to reap disproportionate results Can be done in three ways:
More Users More Usage Trading Up (format change)

Market Development Is focused on Behavior Change.

MARKET SIZE = How many people Use the product Format * How much they use in on usage occasions * Number of Usage Occasions.

Can I make these people Use Dishwash Liquid? Rs 3 per unit

Can I make these people use dishwash Bars?

Can I make these people Use Powder rather than Ash? Can I Make these people Wash their Kitchen Sink with powder as well?

Can I make these people use utensils instead of Banana Leaves?

Market Share Gain or Market Development? If MD then what type MORE USERS? MORE USAGE ? TRADING UP ? Identify :

THE BOTTOM LINE


A SINGLE APPROACH IS UNIVERSAL IN CRACKING GDs and INTERVIEW QUESTIONS : STP 4P ANALYSIS