AveryDennisonWay1.0ForInternalUseOnlyAVERYDENNISONWAY1.02010AveryDennisonWayGuidetoStrategicMarketingDecember17,2010AveryDennisonWay1.0ForInternalUseOnlyAVERYDENNISONWAY1.02010222UnderstandingtheMarketplaceDimension#1:UnderstandingtheMarketplaceSegmentation&TargetingInsightsDevelopmentMarketAssessment21AAveryDennisonWay1.0ForInternalUseOnlyAVERYDENNISONWAY1.020103333MarketAssessmentDefinition•Whatismarketassessment?Anevaluationofthebusinessenvironmentincludingindustry,competitive,andcustomertrendstoidentifypotentialbusinessgrowth,opportunitiesandthreats1AAveryDennisonWay1.0ForInternalUseOnlyAVERYDENNISONWAY1.020104444WhyMarketAssessmentisImportant•Providesinsightsfromwhichtoformulatebusinessstrategy•Helpsemployeesunderstandtheboundariesaroundthemarketweareinandwherewecompete•Providesacompletepictureoftrendsthatareormayimpactthebusiness•Broadenstheknowledgebaseandexpandsabilitytoseeopportunitiesandrisks•Allowsyoutostayaheadofthegameandbettercompete•Givesanopportunitytostepbackandthinkdeeplyaboutthegrowthofthebusiness1AAveryDennisonWay1.0ForInternalUseOnlyAVERYDENNISONWAY1.020105555MarketAssessmentisNecessaryatAllLevelsoftheOrganization•Marketassessmentsshouldbedoneatalllevelsintheorganization•Theprinciples,process,tools,andoutputsarethesameSub-SegmentBusinessSegmentSegmentSub-SegmentSub-SegmentSub-SegmentSub-SegmentConsumerPackagedGoodsFoodBeverageBeerNon-alcoholicWineCouldfurtherbreakdownsub-segmentbyproductlevelIllustrativeExample1AAveryDennisonWay1.0ForInternalUseOnlyAVERYDENNISONWAY1.0201066666MarketAssessmentLearningObjectives•Howtodefineamarket•Howtoscopeandsizeamarket•Howtoassessamarketusingthefiveforcesanalyticaltool•Howtoidentifyandprioritizekeymarkettrends1AAveryDennisonWay1.0ForInternalUseOnlyAVERYDENNISONWAY1.0201077777MarketAssessmentProcessDefinetheMarket1•Selectmarketdefinition•Determinemarketsize•SummarizemarketattributesAssessMarketandFitwithAveryDennisonPrioritizeMarketTrends23•Definethevaluechain•Investigate&assessmarketbasedonfiveforces:1.CompetitiveRivalry2.ImmediateBuyers3.End-Users4.Suppliers5.Substitutes/RiskofEntrants•AssessAveryDennison’smarketperformance•Evaluatemarkettrendsontwocriteria:1.Significance2.ImpactonAveryDennison•Classifymarkettrendsandunderstandindicatedactions:•Act•Investigate•MonitorOverallMarketAveryDennisonImplications1AAveryDennisonWay1.0ForInternalUseOnlyAVERYDENNISONWAY1.0201088888MarketAssessmentProcessDefinetheMarket1•Selectmarketdefinition•Determinemarketsize•SummarizemarketattributesAssessMarketandFitwithAveryDennisonPrioritizeMarketTrends23•Definethevaluechain•Investigate&assessmarketbasedonfiveforces:1.CompetitiveRivalry2.ImmediateBuyers3.End-Users4.Suppliers5.Substitutes/RiskofEntrants•AssessAveryDennison’smarketperformance•Evaluatemarkettrendsontwocriteria:1.Significance2.ImpactonAveryDennison•Classifymarkettrendsandunderstandindicatedactions:•Act•Investigate•MonitorOverallMarketAveryDennisonImplications1AAveryDennisonWay1.0ForInternalUseOnlyAVERYDENNISONWAY1.0201099999MarketDefinition:AgroupofexistingandprospectivecustomersthatneedsaspecificsolutionorproductandhastheabilityandwillingnesstopurchasethatsolutionorproductThemarketdefinitionisalsoknownasthe‘FrameofReference’(Wheredowecompete?)MarketDefinitionAddressableViableWinnable50%ofalldetergentcontainersuselabels:$50M(=100M*50%)TotalLaundrydetergentmarket:$100MThemarketwecouldtheoreticallyaddress,filteredfortargetmarketsegmentsThemarketwherewehavethestrongestfitwithneedsandthehighestlikelihoodofsustainablesuccessNarrowerdefinitionofthemarketwherecustomers/consumersresideandconsideringtheirbuyingbehavior/criteriaThebroadestdefinitionofthemarketExplanationIllustrativeExampleProductportfoliomeets30%ofcustomersproductspecs:$15M(=50M*30%)Duetomarketfactors(eg.geography,salescoverage,long-termcompetitivecontracts),AveryDennisonisabletoattain15%ofthemarket:$2.25M(=15M*15%)1AAveryDennisonWay1.0ForInternalUseOnlyAVERYDENNISONWAY1.020101010101010Examples:HowtoDefineaMarket10BroadNarrowCustomerneedsweserveProductswesellRangeofMarketDefinitionsPrimePaperBrandEnhancement•Considerexpandingthemarketdefinition•Makesuretoidentifycustomers’competitorswithinthemarketdefinitionHVACTapesIndustrialBondingBarCodeTagsLogistics&ProductivityEnhancementLabeling&PackagingMaterialsPerformanceTapeSolutionsRetailBrandingandInformationSolutionsDivision1AAveryDennisonWay1.0ForInternalUseOnlyAVERYDENNISONWAY1.020101111111111?ororDeterminingtheRightMarketDefinitionLabelstock/PrimePaperLabeling&PackagingSolutionsBrandEnhancementHowtoselectwhichdefinitiontouse?Isthemarketattractive?MarketSize&Profitability:Isthemarketlarge?Isitgrowing?Doesitprovidethepotentialforprofits?Howlargeisthepotentialuserbase?RoomtoGrow:Havewealreadypenetratedthismarketoristhereroomtoprofitablyexpandourrole?Canweeffectivelycompeteinthismarket?CustomerPreference:Canweprovidevaluetocustomersrelativetothecompetition?Willcustomersgiveuspermissiontoplayinthismarket?Resources:Dowehavetheassetsandcapabilitiesnecessarytocompete?Ifnot,canwedeveloporacquirethem?Example: