Subcategories characteristics and consumer segments
These are the only reports available to manufacturers only.
The only filter is for choosing the subcategory. After you choose the interesting subcategory you can see the most important characteristics. The first part contains the critical information for decision-making, i.e. the production cost profile. It specifies the basic cost of manufacturing. We might see here how much of which resource we need to manufacture a unit of selected subcategory, what their unit prices are, and thus what the total base cost of the resources is. The actual manufacturing cost depends also on different elements (described in more details in the decisions help pages):
- quality rate of the product, which might take the values between 1 and 2. The base cost is multiplied by this quantity. The products might be even twice as expensive in production than the default is we go for best available quality. This rate is not defined by manufacturers directly. It's calculated base on the product parameters selected. Only when ordering own bran products, distributors or retailers specify just the quality rate, without defining individual parameters.
- technology development index, which might take the values between 1 and 5. It is the level of technological advancement of the production lines. The higher it gets, the more efficient the line, and thus the manufacturing costs get reduced. If the index is changed from 1 to 2, the manufacturing cost is reduced by 25%, if from 1 to 3 by 33%, and if from 1 to 5 by as much as 40%!
- manufacturer market share, giving a resource purchase discount. It reflects the scale of the business, and growing with it negotiation power. The rebates might reach up to 50% for full domination in the market (i.e. 100% market share).
The second part of the report is the share of demographic groups, represented here by the consumer segments in the subcategory overall consumption in the market. Once we know these characteristics we might aim to forecast which products should be primarily addressed to which target groups, what should be the product characteristics, marketing investment, and what might be the maximum sales potential for each of the groups. Also the first quantity describing segments, and included in the report, i.e. the sensitivity of segments to product characteristics might give useful indication: Negative values suggest, that higher value repels users, positive, that higher value attracts.
The third part of the report is quantitative characteristics of share of individual segments in consumption of products in the category. This determines whether the product is indeed sold to the target group.
This report characterizes the consumer segments, and the first part is just a qualitative description. Apart from it, we can find here three quantitative characteristics:
- sensitivity to uniqueness, ranging 0-1. The higher the value, the more unique products the consumer seek
- disposable income index is measuring the relative purchase power as related to the market average (=100)
- share of segments in categories available in the market, not just volume, also share in disposable income, number (in population), volume, and revenue