Wednesday, September 18, 2019
How do firms penetrate an existing market? Essay -- Business and Manag
How do firms penetrate an existing market? Cadburys have to improve their levels of market penetration and also make more sales customers. Cadburys have improved their penetration which helps them to improve market share. It can increase in there market share which can create significant sales. Market penetration suggests a further penetration of existing markets with existing products. This will involve a strategy of increasing market share within existing segments and markets. Ã · Market development is a strategy requires the producer to develop raw market segments for products. Ã · Product development is the process of researching market needs, creating products to meet the identified needs. Ã · Diversification means going into new market with entirely new products. Ã · Market penetration is increasing the % of sales in present markets by taking sales from competitors. To improve their market penetration there are six district stages in the development process for new products are; - Ideas All Cadbury products start from ideas. These ideas may come from the following sources: Research and Development -This is where product development and market research working together. Mindstorming -This is where it involves few people developing ideas from words and concepts. Suggestion box - Here Cadburys is working close to the customer and the sales forces understand their needs and requirements. Forced relationships -At times one or more products can be joined together to form new product concepts. Competitors - Monitoring the actions of competitors may provide a rich source of new ideas. Screening of ideas -Once Cadburys ideas have been generated. It is important to screen for the ideas likely to be successful. Considerations may include how well the product fits in with others in the product range the unique element of any idea that makes it competitive. They are likely to demand for the product and whether or not it could be manufactured economically. The two main errors Cadbury needs to avoid when screening ideas are; Ã · They must not reject new ideas Ã · They must not develop poor ideas or Cadbury will loose money Market analysis Once Cadburys ideas have been screened market analysis begins. It involves analysis of the product market potential. This he... ...ment consultants in the USA. Stars These are products with a high market share like Cadburys in a rapidly growing industry. Unless Cadburys chocolate bar has not achieved this position through heavy discounting, it should be generating high profits. For Cadbury to remain a star in a competitive environment its chocolate bean will continue to need heavy marketing expenditure. Cash cow Cash cows have a high market share in a slow growing, but mature market. Cadbury could fall into this because there competitors do have higher cost slightly. But Cadbury benefits from high economic of scale. It can generate high profits which could be used to finance Ã¢â¬Ëproblem children/question marksÃ¢â¬â¢. Question Marks and problem children This product has a low market share in a rapidly growing market. The business has to decide whether to with draw the product or to support it with heavy marketing, which could be difficult if it is not generating funds elsewhere. Dog This product has a low market share in markets where there is little or no growth. At this stage a product is at the end of its life cycle. The product is best if it is dropped out of its portfolio.