In this module, you learned the importance of evaluating segments and choosing a target market. As we embark on the simulation experience for this course one of your first tasks will be to select an initial market segment to focus on the launch of your product innovation. This reflection exercise is meant to help you think about the tradeoffs that the different market segments offer.

Before engaging in this reflection exercise you should:

1) Secure access to the simulation software (see the Marketplace Sim section for instructions on how to sign up)

2) Review the  assignment guidelines

3) Read the background information so you understand the marketplace scenario and the three market segments that you are considering

YOUR TASK: A Market Opportunity Analysis

A market opportunity analysis (MOA) is the identification and assessment of market opportunities based upon an analysis of:

  •     The structure of the market.
  •     The market requirements of customers.
  •     The strengths and weaknesses of competitors.

An MOA provides the foundation for designing an effective strategy to capitalize on one or more of the identified opportunities. At this stage in the development of your industry, it is not possible to seriously evaluate your potential competitors. Just like your company, they are all entrepreneurial firms without a track record.

After some quarters, you should be able to judge their strengths and weaknesses and use this information in your strategic and tactical planning. For now, you must focus on the end-users. They are your ultimate boss, and you must ascertain what it will take to make them happy.

Your initial MOA should begin with an analysis of your potential customers. The marketing research data that you have available are patterned after the real-world. The data has been modified and simplified in order to facilitate its use in the simulation. Since the market modeled in the simulation is based upon this information, it is important for your firm to analyze the data.

To begin your MOA, read the topics below to learn more about:

  • Types of Information Available
  • Interpreting the Survey Data
  • Understanding What Customers Value

You can find this information in the “help” file of the simulation which is linked from the top right corner as well as from the various “lecture” tabs as you learn more about the Marketing Research on the three segments

There are three market segments with very different needs and wants that cannot be served with the same marketing mix:

  • The Recreation segment is looking for fun and a little exercise
  • The Mountain segment wants a bike that can be taken off-road
  • The Speed segment is looking for the lightest, fastest, most aerodynamic bike

Relative comparison of the 3 segments. Recreation is the largest market, satisfied with a little performance at a lower price. Speed is the smallest market willing to pay most for the most performance. Mountain is the middle-sized segment, demanding something between the other two.

The simulation presents you with customer profiles for each of the market segments, along with three marketing research reports:

  1. Customer Needs
  2. Price Willing To Pay
  3. Market Potential

There are trade-offs among the market segments – not one of them is best.  However, you can develop a winning strategy for any of the three (or all). The key to success in this game is to understand the needs and wants of your market segment and match it with a suitable marketing mix.

  1. What are the trade-offs among the three market segments available in the simulation? 
  2. Which segment will you select as your initial target market? Explain your rationale
  3. Which location will you choose to open a sales outlet for your ‘test market’ in Quarter 2? Why did you choose that location?