Market Analysis Stratergy

MARKET ANALYSIS

1.1 MAREKT SIZES AND TRENDS

The market for the product can be divided into two segments: the Consumer and the Business Segments. Within the consumer and Business segments, it can be further segmented into four different sub-segments each, based on different characteristics or profile of the sub-segments.

1.1-1 BUSINESS SEGMENTS

The market size of the Business market has grown from about 6.3 million units in Period 1 to about 7.1 million units in Period 3. It is expected to grow to about 7.7 million units by Period 4. For the business market, it is further sub-segmented to: Professionals, Wired Groups, Outsourcers and Traditional. The profiles of the four sub-segments are shown below.

Table 1: Profiles of Business's sub-segments

Business Type of Business Purchase Habits Products Sought

Professional(+10% growth) High-Tech firms, consultants, growth industry. Have high purchasing power Seek efficiency in purchase. Need to focus on their company growth. Like high-end products, not particularly price sensitive.

Wired Groups(+20% growth) Large Corporations Like human interface. Decision makers buy for the rest of the company, so need to 'trust' the supplier. Also seek some efficiency. Large volume purchasers. Cost per unit is important to these customers.

Outsourcers(+15% growth) Lean operations. Medium Size companies which focus on core business Seek efficient purchasing, are willing to give up the human touch in order to gain efficiency and cost reduction Seek low prices, product itself is not seen as core business for them. Very price sensitive.

Traditionals(-5% growth) Traditional, often family owned stores and businesses Like human interface they can trust. Seek best product. Not price sensitive.

The market size of each sub-segments of the business market from the period 1 to Period 4 is shown below in Table 2.

Table 2: Market Demand (in units) in the Business Segment for Period 1 to Period 4

Periods 1 2 3 4

Professional 1,452,000 1,597,200 1,756,920 1,932,612

Wired Groups 1,440,000 1,728,000 2,073,600 2,488,320

Outsourcers 529,000 608,350 699,602 804,542

Traditionals 2,888,000 2,743,600 2,606,420 2,476,099

Figure 1:Market demand (in units) in the Business Segment for Period 1 to Period 4

At Period 3, the market size of the Traditionals is the biggest (36.5% of the total business segment), decreasing at a rate of 5% annually. The market size for the Wired Groups, with a growth rate at 20%, is increasing steadily from about 1.44 million units in Period 1 to 2.07 million units in Period 3. By Period 4, it would be about 2.49 million units and is about 32.3% of the business market. It would then be the largest market size among all the sub-segment within the Business segment, with the Traditionals closely behind in size. The Professional is increasing by 10% annually and it would be about 1.9 millions units by Period 4 (about 25.1% of the business segment). The Outsourcers is growing at a rate of 15% annually but it is the smallest of the sub-segments (less than 10%).

In summary, the largest sub-segment of the consumer market is currently the Traditionals but the Wired groups would be the largest by Period 4.

1.1-2 CONSUMER SEGMENTS

The market size of the consumer market has grown from about 8.9 million units in Period 1 to about 11.6 million units in Period 3. It is expected to grow to about 13.8 million units by Period 4. In comparison, this is about 1.8 times larger than the consumer market.

For the consumer market, it is further sub-segmented to: Experienced Users, Regular Wireds, Deal Seeker and Conservatives. The profiles of the four sub-segments are shown below.

Table 3: Profiles of Consumer's sub-segments

Consumer Socio-demo Type Purchase Habit Products Sought

Experienced Users(+30% growth) High-tech people. Have purchasing power but no time to shop as they work long hours. Seek efficiency in purchase. Focus on work and leisure Like high-end products, not that price sensitive and are high volume buyers

Regular Wireds(+50% growth) Early adopters and early majority in connectedness. Non-IT, non-telecom jobs. Some blue collar A mix of efficiency and human interface A mix of product differentiation and price

Deal Seekers(+20% growth) Progressive, working parents who also manage the households. Typical middleclass Cost and time effectiveness drives suppliers switching behaviour. Not intrinsically 'techies', but willingly to go out of the way to save time and money. Extremely price sensitive.

Conservatives(-6% growth) Typically older people of many classes of society Do not seek efficient channels but require the human touch. They are 'technology averse'. A mixture of price sensitivities and non-price sensitivities seeking medium and high end products.

The market size of each sub-segments of the consumer market from the period 1 to Period 4 is shown below in Table 4.

Table 4:Market Demand (in units) in the Consumer segment for Period 1 to 4

Periods 1 2 3 4

Experienced User 380,250 494,325 642,622 835,409

Regular Wireds 787,500 1,181,250 1,771,875 2,657,813

Deal Seekers 4,320,000 5,184,000 6,220,800 7,464,960

Conservatives 3,401,860 3,197,748 3,005,883 2,825,530

Figure 2: Market Demand (in units) in the Consumer segment for Period 1 to 4

At Period 3, the market size of the Deal Seekers is the biggest (54.2% of the total consumer segment), growing at 20% annually. The market size for the Regular Wireds, with a growth rate at 50%, is increasing rapidly from about 0.78 million units in Period 1 to 1.77 million units in Period 3. By Period 4,