Economic and buyer behavioural factors to be taken into account when assessing new market opportunities
Seasonal
Seasonal factors affect the fluctuations in output and sales in regards to the season of the year, depending on the market for the new product or service, therefore there are seasons where production and or sales significantly increases and seasons where it slows down. Therefore, if when entering assessing new markets, the seasonal fluctuations will need to be analysed.
Recession
Recession is a period where there is general economic decline and is usually marked by fall in retail sales stagnant wages and high employment. Recession will have an effect on buyer behaviour as the majority of consumers will have less disposable income, therefore it is important to make sure that the new products or services will be affordable to consumers in order to generate sufficient sales.
Taxation
Some products such as cigarettes and alcohol are subject to increased taxation that are levied by the government, therefore when assessing new market opportunities, it is important to take into account whether there is increased taxation, as this can affect the sales of how you perform in the market.
Employment levels & Cost of living
When assessing new market opportunities, it is important to take into account the current levels of employment as this can affect how you perform in the new market, for instance; when employment is high, consumers have more disposable income and are more open to buying into new products and services. However, if the cost of living is also high, then consumers might tend to try to save more or stick to product products or services that they need rather than those of leisure or luxury.
Cultural factors that are likely to affect customers’ perception of products and/or services and sales performance
Supply and demand
Supply and demand is the amount of products, services or commodities available and the desire for consumers to buy it. Supply and demand affects the customer’s perception of products and or services because when there is a high demand for a product or service and a low supply, the product or service is seen as rare and valuable and this affects sales because the business can charge a lot more for the product or service and people will still buy it.
Demographics
Demographics such as income, age and geographic region can affect the customers perception of products and services. For instance, a premium product such as a high end luxury women’s clothing will typically appeal to women within high income brackets and therefore the sales of these clothes will typical perform well as they are target to the right demographic.
Identifying opportunities and threats in new markets and for new products in existing markets
The opportunities and threats in new markets and for new products in existing markets can be identified through market research which enables you to gather information about the market and its consumers along with their needs and preferences, find out the current state of the market and whether their products or services will perform well in the market. Furthermore, a SWOT analysis can be conducted to identify the opportunities, threats, strengths and weaknesses of the new markets and also within the existing markets.
How competitor and potential competitor activity may affect projected sales performance
Competitor and potential competitor activity can affect projected sales performance because you compete in the same market as your competitor, therefore if the activity is effective, then they increase the market share, while your decreases which then has a negative effect on your projected sales performance. Competitor activity can include increase marketing activities such as search engine marketing, pay per click, online display. Posters, billboards as well as sales promotion.
