Market Feasibility

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Market Feasibility Study of PALM ISLAND

Presented By:

Yatin BansalSunam PalSree Hari HaranSatish

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features of Palm island• Unique• This makes it a resemblance of richness.• To be related to palm island brings pride to

people as its one of its kind.

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Palm island taps various markets…

• Tourism• Residential• Entertainment area• Resorts, hotels and restaurants• Cruise, boating and other water sports.

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Safety and security• It is more of a backwater than a sea beach.• It is surrounded by high level boundaries which protects it from

high tides.

Quantitative Tools

for Market Feasibility Test4

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TMarket Feasibility Analysis of Palm IslandAlliance University

SAT17 APR

Quantitative Tools1. Forecasting2. Percent Median Market3. Control Chart4. Predictive Gravity

Modeling5. Assignment Model6. Customer Life Time Value

( CLV )7. Sensitivity Analysis 5

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Factors For Testing

1. Tourism Growth2. Entertainment Clubs3. Real estate Mapping4. Footfalls in Malls5. Resorts possible areas

Forecasting of Tourism Growth

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Definition : The process of analyzing current and historical data to determine future trends.

Step:1 Forecasting

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Year 2005 2006 2007 2008 2009 2010No of Tourist 18,76519,867 21,654 22,123 23,778 25,169

1. Regression Analysis2. Moving Average 3. Extrapolation4. Trend Analysis

2004 2005 2006 2007 2008 2009 2010 20110

5,000

10,000

15,000

20,000

25,000

30,000

f(x) = 1263.48571428571 x − 2514554.90476191R² = 0.987712388971676

No of Tourist

Axis Title

Axis Title

Standard Deviation : 0.12 %

dy/dx = Growth

Step:1 Forecasting

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2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

5,000

10,000

15,000

20,000

25,000

30,000

No of Tourist

Year 2005 2006 2007 2008 2009 2010 2011 2012No of Tourist 18,765 19,867 21,654 22,123 23,778 25,169 26,741 27,891


2011 Forecast: 26,741

Step:1 Forecasting

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2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

5,000

10,000

15,000

20,000

25,000

30,000

No of Tourist

Year 2005 2006 2007 2008 2009 2010 2011 2012No of Tourist 18,765 19,867 21,654 22,123 23,778 25,169 26,741 27,891The analysis gives an idea about

expected figure in Dubai but it does not show how will it impact

specifically palm Island

Step:2 Percent Median Market

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Definition : It defines the percentage distribution across various factor Helps to know

1. Market penetration2. Potentiality of a particular segment


2011 Forecast: 26,741


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Age Group < 25 25-30 30-40 40-50 50> Total

Will Visit Palm Island 12 24 49 21 9 115

Will Visit Other Place 157 231 369 189 112 1058

Will visit for both Palm Island & Other places

4 9 19 7 3 42

Total 173 264 437 217 124 1215

Tourism


2011 Forecast: 26,741


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Age Group < 25 25-30 30-40 40-50 50> Total




4 9 19 7 3 42

Total 173 264 437 217 124 1215

Tourism The Percent Median table can be formed based on

1. Customer Survey2. Customer Feedback3. Expert Opinion4. Historical Trends


2011 Forecast: 26,741


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Age Group < 25 25-30 30-40 40-50 50> Total




4 9 19 7 3 42

Total 173 264 437 217 124 1215

Tourism


2011 Forecast: 26,741

Market Penetration = (115 + 42 ) / 1215 = 12.92 %

Marketing Penetration: 12.92%


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Age Group < 25 25-30 30-40 40-50 50> Total




4 9 19 7 3 42

Total 173 264 437 217 124 1215

Tourism


2011 Forecast: 26,741



Age Group % share Preference

< 25 14.23868313

5

25-30 21.72839506

2

30-40 35.96707819

1

40-50 17.8600823 3

50> 10.20576132

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TOTAL 100

Potentiality of customer segments


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Age Group < 25 25-30 30-40 40-50 50> Total




4 9 19 7 3 42

Total 173 264 437 217 124 1215

Tourism


2011 Forecast: 26,741



Age Group % share Preference

< 25 14.23868313

5

25-30 21.72839506

2

30-40 35.96707819

1

40-50 17.8600823 3

50> 10.20576132

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TOTAL 100


It gives idea about market penetration & customer segment, but still gives no idea

about the feasibility of project

Step:3 Control Chart

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2011 Forecast: 26,741


Potentiality of customer segmentsControl charts, also known as process-behavior charts, in statistical process control are tools used to determine whether or not a manufacturing or business process is in a state of statistical control.

It has : USL : Upper Specification Limit LSL : Lower Specification Limit

Step:3 Control Chart

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2011 Forecast: 26,741



No of tourist

• Over capacity• Risks

• Under Utilization• No ROI

LSL USL

Expected Tourism in 2011 = ( 26,741 X 0.1292 ) = 3208.92

3000 3500

Control Chart

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2011 Forecast: 26,741



No of tourist

• Over capacity• Risks

• Under Utilization• No ROI

LSL USL

Expected Tourism in 2011 = ( 26,741 X 0.1292 ) = 3208.92

3000 35003208

Feasible

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LSL USL LSL USL

LSL USL

Feasible No Risk

Not Feasible

Feasible but Risky

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20Tourism at Palm Island is Feasible

But feasibility may differ on territory level

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21Tourism at Palm Island is Feasible

But feasibility may differ on territory level

Weak territories

Strong territories

Step:4 Predictive Gravity Modeling

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Potentiality of customer segmentsForecast the total potential sales available from each neighborhood in the trade area

The model should be designed to mesh with the data that will be used when the model is implemented. In GIS analysis and most other large data analyses, the characteristics of individuals are summarized into the neighborhood's demographic or psychographic profile

Input variables V1 V2 V3

F ( X )

Output( Graphic user Interface )


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OUTPUT

Market Penetration


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OUTPUT

Case:Opening a shopping Mall

Criteria : In a area where market penetration is between above 50%

Market Penetration

Feasible

Not Feasible


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OUTPUT

Case:Opening a shopping Mall

Criteria : In a area where market penetration is between above 50%

Market Penetration

Feasible

Not Feasible

It gives an idea about feasibility but how to decide which territory is best feasible ?

Step:5 Assignment Model

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Potentiality of customer segmentsTo find most best feasible solution

Area 1 Area 2 Area 3 Area 4 Area 5

Shopping Mall 1 5 2 3 4


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Area 1 Area 2 Area 3 Area 4 Area 5Shopping Mall 1 5 2 3 4Restaurant 2 4 3 1 5Resort 5 2 1 3 4Club 4 1 2 5 3residential Area 5 2 3 4 1

Applying Assignment Model

BEST

Shopping Mall Area 1

Restaurant Area 4

Resort Area 3

Club Area 2

Residential Area Area 5

BEST FEASIBLE


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Area 1 Area 2 Area 3 Area 4 Area 5Shopping Mall 1 5 2 3 4Restaurant 2 4 3 1 5Resort 5 2 1 3 4Club 4 1 2 5 3residential Area 5 2 3 4 1

Applying Assignment Model

BEST

Shopping Mall Area 1

Restaurant Area 4

Resort Area 3

Club Area 2

Residential Area Area 5

BEST FEASIBLE

How much value would customers add to you?

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STEP : 6 Customer Lifetime Value ( CLV )

In marketing, customer lifetime value (CLV), lifetime customer value (LCV), or lifetime value (LTV) is the net present value of the cash flows attributed to the relationship with a customer

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CLV =

k

CLV: Customer Lifetime ValuePC : Profit Contributiond : Discount Raten : Number of yearsk : Time unit

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STEP : 6 Customer Lifetime Value ( CLV )

In marketing, customer lifetime value (CLV), lifetime customer value (LCV), or lifetime value (LTV) is the net present value of the cash flows attributed to the relationship with a customer

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CLV =

k

CLV: Customer Lifetime ValuePC : Profit Contributiond : Discount Raten : Number of yearsk : Time unit

Risks ?

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STEP : 7 Sensitivity Analysis

Sensitivity analysis (SA) is the study of how the variation (uncertainty) in the output of a mathematical model can be apportioned, qualitatively or quantitatively, to different sources of variation in the input of the model.

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I ( X ) O ( X, Y) I ( Y )

If f ( x ) is altered, than to what degree O ( X,Y ) would change.

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STEP : 7 Sensitivity Analysis

Sensitivity analysis (SA) is the study of how the variation (uncertainty) in the output of a mathematical model can be apportioned, qualitatively or quantitatively, to different sources of variation in the input of the model.

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I ( X ) O ( X, Y) I ( Y )

If f ( x ) is altered, than to what degree O ( X,Y ) would change.

Based on sensitivity analysis we have to decide contingency level

Qualitative Tools

for Market Feasibility Test33

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Quantitative Tools1. Concept Testing2. Delphi Techniques3. Focus Group Advice4. Nominal technique5. Alpha Testing6. Beta Testing7. Test Marketing8. Market Simulation9. Competitive Advantage

Analysis10. Sustainability Test 34

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Concept Testing• People’s reaction to a basic idea of the product

• Usually done before a product is marketed.

• Ensures the selection of the most favorable concept

• Reduces research, development and marketing cost

• Lays a foundation for Benchmarking in future

• Forecasts and analyses the demand and ensures the right time of launching

Focus Groups?

• It's dangerous to take "customers" for granted• To collect qualitative data• To determine feelings, perceptions and manner of

thinking of participants regarding products, services, programs or opportunities• To promote self-disclosure among participants

Test Marketing

To test a new product or a new marketing plan under realistic market conditions to measure sales or profit potential.Done based on the following1. Population size2. Demographic composition3. Lifestyle considerations4. Competitive situation5. Media

Test Marketing

WHY1. To identify and correct weakness in the plan2. To estimate the outcomes OUTPUT

3. Reduced cost4. Increased secrecy from competitors

Alpha Testing

• Acceptance testing• Done in front of client or customer for

their acceptance.• The Product is developed according to the

customers requirement and Specification.• Generally termed as internal testing

Beta Testing

• Done after Alpha testing• Termed as External user acceptance

testing• Open to limited people • Based on their feed backs the flaws are

corrected

Competitive Advantage

“A project’s profit potential is largely determined by the intensity of competitive rivalry within that Project”

Competitive Advantage• Variety of health spas, fitness centres and residents' clubs• Outstanding facilities at 30 luxury five-star or boutique hotels• Wide selection of restaurants offering the finest cuisine from

all over the world• Tax-free, designer brand shopping on the Golden Mile and in

Palm Mall• Safe, gated communities and top security in all apartment

residences• Miles of beautiful, golden beaches with spectacular ocean

views• Incredible range of attractions and events, as well as theatres,

cinemas and nightclubs

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E-procurement system of Honeywell & VedantaBEN

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PSGIM, Coimbatore

Fri25 Feb

Questions Please ????

Market Feasibility

Business

Transcript of Market Feasibility