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It is helpful to identify the geographical boundary (or other basis of identifying buyers) of the product-market, the market size and characteristics, and the brand and/or product categories competing for the needs and wants of specific end-user groups. Suppose the management of a kitchen appliance firm wants to expand its mix of products. The present line of laundry and dishwashing products meets a generic need for the kitchen functions of cleaning. Other kitchen use situations include heating and cooling of foods. A logical expansion for the appliance firm would be to move into a closely related product type to gain the advantages of common distribution channels, manufacturing, advertising, and research and development The Maytag Company illusÂtrates this situation with its line of washers, dryers, and dishwashers. In the 1980s Maytag's management acquired several companies, expanding from a specialty producer into a full line of kitchen appliances, including refrigerators, stoves, and microwave ovens.
The structure of a product-market can be defined by following the steps shown in Exhibit 3-1. Let's see how this process is used-in evaluating possible opportunities in pie kitchen appliance product-market. In this example toe generic need is performing various kitchen functions. The products that perform kitchen functions are ways of satisfying toe generic need. The break out of products into specific product-markets (e.g. A, B, C, and D) would include equipment for washing and drying clothing, appliances for cooling food, cooking appliances, and dishwashers. Management can analyze the buyers in various specific product-markets and the different brands competing in these product-markets. The process of defining the product-market structure begins by identifying the generic need, (function) satisfied by the product of interest to management Need identification is the basis for selecting the products than can satisfy the need.
An illustrative product-market structure for analyzing the fast-food market is shown in Exhibit 3-2. A fast-food restaurant chain such as McDonald's should include more than its regular customers and direct competitors in the market opportunity analysis. For example, microwave oven preparation of foods affects fast-food patronage. The consumpÂtion need being satisfied is fast and convenient preparation of food. The buyer has seven! ways of meeting the need, including purchasing fast foods, microwave preparation in the home, patronizing supermarket delis, buying prepared foods in convenience stores, or ordering takeouts from traditional restaurants. Thus, it is essential, to analyze market behavior and trends in the markets shown in Exhibit 3-2. Competition may come from any of the alternative services.
The strategic marketing process
Journal of Strategic Marketing
SMART is a custom marketing research
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