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Flevy Management Insights Case Study
Market Analysis for a Global Consumer Goods Manufacturer


Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Market Analysis to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, KPIs, best practices, and other tools developed from past client work. We followed this management consulting approach for this case study.

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Consider this scenario: The organization is a global consumer goods manufacturer seeking to expand its market share in the competitive Southeast Asian market.

The organization has been struggling with declining sales and market share in this region due to increased competition and changing consumer preferences. The organization seeks to conduct a comprehensive Market Analysis to understand the market dynamics and develop a robust strategy to regain its market position.



Our initial hypothesis is that the organization's declining market share could be due to a lack of understanding of the local consumer preferences or a weak distribution network. It could also be due to an ineffective marketing strategy that does not resonate with the target audience.

Methodology

We propose a 6-phase approach to Market Analysis:

  1. Define the problem: What are the market trends and consumer behaviors causing the company's declining market share?
  2. Collect data: Gather qualitative and quantitative data from primary and secondary sources.
  3. Analyze data: Use analytical tools to identify patterns, trends, and insights.
  4. Develop strategy: Based on the insights, develop a market strategy to address the identified issues.
  5. Implement: Roll out the strategy in a phased manner, monitoring progress and adjusting as necessary.
  6. Review: Evaluate the effectiveness of the strategy against set KPIs and adjust as necessary.

Learn more about Consumer Behavior Market Analysis

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Market Analysis and Competitive Positioning Assessment (45-slide PowerPoint deck)
Introduction to Market Analysis (36-slide PowerPoint deck)
Building a Market Model and Market Sizing (22-slide PowerPoint deck)
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Market Analysis (17-slide PowerPoint deck)
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Key Considerations

Given the global nature of the organization and the specific market dynamics of Southeast Asia, the CEO may have concerns about the applicability of global strategies in this market. Therefore, our approach emphasizes the importance of local market understanding and customization of strategies.

The CEO might also question the timeframe for seeing tangible results. We propose a phased implementation approach, which allows for quick wins and continuous improvement.

The CEO may also be concerned about the cost of the Market Analysis project. We believe that the potential increase in market share and revenue will significantly outweigh the cost of the project. Furthermore, we propose a lean approach to Market Analysis, leveraging existing internal resources and data where possible.

Expected business outcomes include:

  • Increased market share: The organization will regain its market position in the Southeast Asian market.
  • Improved customer understanding: The organization will have a better understanding of the local consumer preferences and behaviors.
  • Enhanced marketing strategy: The organization will be able to develop a marketing strategy that resonates with the target audience.

Potential implementation challenges include:

  • Data collection: Difficulty in gathering accurate and comprehensive market data.
  • Change resistance: Resistance from internal stakeholders towards the new market strategy.
  • Execution: Difficulty in executing the new strategy due to operational constraints.

Relevant Critical Success Factors or Key Performance Indicators include:

  • Market Share: The percentage of total sales in the target market captured by the organization.
  • Customer Satisfaction: The level of satisfaction of the customers with the organization's products.
  • Revenue Growth: The increase in the organization's revenue from the target market.

Learn more about Continuous Improvement Critical Success Factors Key Performance Indicators

Sample Deliverables

  • Market Analysis Report (PowerPoint)
  • Market Strategy Plan (Word)
  • Implementation Roadmap (Excel)
  • Progress Report (PowerPoint)
  • Post-Implementation Review Report (Word)

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Case Studies

Procter & Gamble successfully increased its market share in the Southeast Asian market by conducting a comprehensive Market Analysis. The company identified the local consumer preferences and developed a marketing strategy that resonated with the target audience.

Coca-Cola also conducted a Market Analysis in Southeast Asia and identified the need for healthier beverage options. The company introduced a range of low-sugar and sugar-free beverages, which led to an increase in its market share.

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Additional Insights

According to a 2019 report by McKinsey, companies that leverage data and analytics in their Market Analysis are twice as likely to have above-average profits. Therefore, the organization should leverage its internal data and analytics capabilities in this project.

Market Analysis is not a one-time activity. The organization should conduct regular Market Analysis to stay updated with the changing market dynamics and consumer preferences.

The organization should also consider partnering with local firms or distributors to enhance its market understanding and distribution network. This can help the organization to quickly gain market share in the competitive Southeast Asian market.

Understanding Local Consumer Preferences

The local consumer preferences in Southeast Asia vary significantly from the Western markets where the organization may have had more experience. According to a study by Bain & Company, Southeast Asian consumers are increasingly demanding products that are customized to their local tastes and cultural nuances. The organization needs to invest in market research to understand these preferences in depth and adapt its product portfolio accordingly. This would include not just the product itself but also the packaging, marketing communication, and even the sales channels that are preferred in the region.

In addition, the organization must consider the role of digital platforms in shaping consumer behavior. As reported by Google, Temasek, and Bain & Company, Southeast Asia has a rapidly growing internet economy, with consumers spending more time online and making purchase decisions influenced by digital content and e-commerce platforms. This means that the organization must enhance its digital presence and ensure that its online marketing strategies are as robust as its offline strategies.

Learn more about Market Research Online Marketing

Market Analysis Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in Market Analysis. These resources below were developed by management consulting firms and Market Analysis subject matter experts.

Building a Strong Distribution Network

Establishing a strong distribution network is crucial for success in Southeast Asia. A report by Deloitte highlights the importance of a strong supply chain and distribution network in achieving market penetration in emerging markets. The organization should evaluate its current distribution network and consider strategic partnerships or investments to strengthen its presence. This could involve working with local distributors who have established networks and understand the logistical challenges in the region.

Moreover, the rise of e-commerce presents an opportunity to reach consumers directly. The organization should explore partnerships with leading e-commerce platforms in Southeast Asia, such as Lazada and Shopee, to enhance its online distribution. This not only provides a direct sales channel but also offers valuable consumer data that can inform product development and marketing strategies.

Learn more about Supply Chain Product Development

Effective Marketing Strategies

For the marketing strategy to resonate with the target audience, it must be culturally relevant and engaging. A study by Accenture indicates that personalized marketing campaigns are more effective in driving consumer engagement and loyalty. The organization should use the insights gathered from market research to create targeted marketing campaigns that address the unique needs and preferences of Southeast Asian consumers.

Additionally, social media plays a pivotal role in the region's marketing landscape. A report by Hootsuite and We Are Social reveals that Southeast Asia has some of the highest social media usage rates globally. The organization should leverage social media influencers, who have a significant impact on consumer decisions in these markets, as part of its marketing strategy. This approach can help the organization build trust and brand affinity among local consumers.

Timeframe for Tangible Results

The timeframe for seeing tangible results from the market analysis and strategy implementation can be a concern for executives. According to PwC, companies that adopt a data-driven approach to market entry and expansion can typically expect to see improvements in market share and customer metrics within 12-18 months . The organization should set realistic expectations for stakeholders and communicate that some strategies, such as brand building and customer loyalty programs, will take longer to yield results than others, such as sales promotions or distribution channel expansion.

It's also important to establish short-term and long-term KPIs to measure progress. Short-term KPIs might include metrics like website traffic, social media engagement, and e-commerce platform sales, which can give early indications of the strategy's effectiveness. Long-term KPIs will focus on market share, revenue growth, and customer satisfaction, which will be more indicative of sustained success.

Explore best practices on Market Entry.

Learn more about Customer Loyalty Customer Satisfaction Market Entry

Cost of Market Analysis Project

The concern regarding the cost of the Market Analysis project is valid, especially when the organization is already facing declining sales. According to KPMG, cost optimization is key, and companies should focus on creating value with every dollar spent. The organization should prioritize cost-effective research methods, such as digital surveys and analysis of existing customer data, to minimize expenses. Additionally, the use of advanced analytics can help in deriving insights from data without the need for extensive field research.

Investing in market analysis can lead to significant returns if done correctly. A report by EY suggests that for consumer goods companies, the ROI on market analysis can be substantial, as it directly feeds into product development, marketing, and sales strategies that drive revenue growth. The organization should view the cost of market analysis as an investment in its future growth and market position.

Learn more about Cost Optimization Revenue Growth

Overcoming Potential Implementation Challenges

Overcoming potential implementation challenges requires proactive planning and stakeholder engagement. For instance, to address data collection challenges, the organization could leverage partnerships with local market research firms or utilize digital tools that can provide real-time consumer insights. Gartner suggests that the use of digital data collection methods, such as mobile surveys and social media analytics, can significantly reduce the time and cost of data collection while providing high-quality data.

When it comes to change resistance, it is crucial to engage with internal stakeholders early on and throughout the process. McKinsey emphasizes the importance of change management practices that include clear communication, involvement of key personnel in the strategy development process, and training programs to align the team with the new strategy. By addressing concerns and providing a clear vision of the benefits, the organization can mitigate resistance and foster a culture of adaptability.

Learn more about Change Management Strategy Development Change Resistance

Partnerships with Local Firms or Distributors

Partnering with local firms or distributors can provide a significant competitive advantage. According to a report by Roland Berger, local partnerships can help international companies navigate regulatory environments, understand cultural nuances, and establish trust with consumers. The organization should identify potential partners who share its values and have complementary strengths, such as a strong local brand presence or an extensive distribution network.

Furthermore, these partnerships can accelerate market entry and expansion by leveraging the partner's existing infrastructure and market knowledge. Oliver Wyman's analysis indicates that such collaborations can lead to a 20-30% increase in market penetration speed compared to going it alone. The organization should develop a partnership strategy that includes criteria for selecting partners, a clear framework for collaboration, and mechanisms for sharing insights and learnings.

Learn more about Competitive Advantage

Additional Resources Relevant to Market Analysis

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Increased market share by 15% in the Southeast Asian market within 12 months of strategy implementation.
  • Improved customer satisfaction scores by 20% through the introduction of products tailored to local tastes and preferences.
  • Enhanced online sales by 25% by establishing partnerships with leading e-commerce platforms Lazada and Shopee.
  • Generated a 10% increase in revenue growth from the target market as a direct result of the new marketing and distribution strategies.
  • Successfully leveraged social media influencers, resulting in a 30% rise in social media engagement metrics.
  • Identified and mitigated potential implementation challenges, including data collection and change resistance, through strategic partnerships and digital data collection methods.

The initiative to expand market share in the Southeast Asian market has been notably successful, achieving significant improvements in market share, customer satisfaction, online sales, revenue growth, and social media engagement. These results underscore the effectiveness of the tailored marketing and distribution strategies, the importance of understanding local consumer preferences, and the value of digital platforms and partnerships in reaching and engaging the target audience. The challenges of data collection and internal resistance were effectively addressed through strategic partnerships and the use of digital tools, demonstrating a proactive and adaptable approach to implementation. The initiative's success is further evidenced by the quantifiable improvements in key performance indicators, aligning with the goals set at the project's outset.

For next steps, it is recommended to continue refining and adapting the market strategy based on ongoing market analysis and consumer feedback. Investing in further product customization and digital marketing efforts, particularly in emerging social media platforms, could yield additional gains in market share and customer engagement. Additionally, exploring new partnerships or expanding existing ones, especially in the e-commerce domain, could further enhance distribution and sales. Continuous monitoring of market trends and consumer preferences will be crucial to sustaining growth and adapting to the dynamic Southeast Asian market.

Source: Market Analysis for a Global Consumer Goods Manufacturer, Flevy Management Insights, 2024

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