Case History Continued

Case History Continued

Case History Continued

Other relevant factors which have to be established are the market share held by each of Elephantine's competitors and the trends in these shares; the selling methods employed by these competitors; pricing and discount policies and the opinion held by customers and distributors of Elephantine's trading performance in comparison with those of its competitors. Finally, it is necessary to make some assessment of the likely future pattern of the market.

Before this work, which will include both desk and field research, can commence, the researchers must establish the sources of information available to them. Desk research can be undertaken into material supplied by the company itself, from trade statistics and from trade journals and directories. Field research will consist of interviews with Elephantine's customers and potential customers and also with its agents and wholesale distributors.

Such, then, is the situation as the researchers go to work. After a period of a few weeks, they come back to Elephantine with the information they have gleaned.

They have made an assessment of the total home market for Elephantine's product range based on information drawn mainly from three sources:

A. The Census of Production figures for the previous ten years.

B. Elephantine's own sales figures.

C. Estimates of competitors' sales based on their known production capacity and labour force and from information obtained from customer interviews.

On the basis of this information, the researchers estimate that the total available market is currently �5,200,000 and has been growing at the rate of 9 per cent per annum. Elephantine's share, which was 85 per cent ten years ago, dropped to 70 per cent five years ago and is now 55 per cent. Thus, although Elephantine has remained the market leader, its share of the market has eroded rather rapidly.

From customer interviews, the research team have been able to establish that the main growth in the last two or three years has come from the Super-Colossal Company, who now have 33 per cent of the market, and from Agile Industries, who currently hold 12 per cent. All the evidence points to the fact that Agile is an aggressive and intelligently directed firm which has grown very quickly.

To make an assessment of the likely future development of the market, the opinions of a representative selection of firms in user-industries have been canvassed. From what they learned, the researchers have formed the opinion that the rate of expansion of the market, which has been maintained fairly steadily over a number of years, is likely to slow down as the result of changes both in the design of equipment and in methods of use. They consider it reasonable to estimate the future market growth at no more than 4 per cent per annum.

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Please Note

The Trade is, of course, a major source of product ideas. All manufacturers examine, with avid interest, the new products of their competitors.