Market Research and Strategy

CLIENT TYPE

Outdoor Lighting Fixture Manufacturer 

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OVERVIEW

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Our client, an outdoor lighting fixture (luminaire) manufacturer was considering entering a new market segment via new product development or acquiring an existing manufacturer in that segment.  Although the C-Suite and senior management team were industry veterans, their backgrounds were in different market segments.  Because the potential segment was a niche market, an off-the-shelf market study was not available to purchase. 

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Our client engaged us to conduct an autonomous and anonymous market research study customized to their specific needs.  This project consisted of the following.

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1. In-Depth Market Study and Analysis

2. Competitive Analysis of 5 Manufacturers

3. Market Opportunity Recommendation

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PROJECT COMPONENTS

A.   Market Research Study

• Market Overview

• Market Type, Size & Scope

• Market Size & Demand

  • Demand by Application

  • Demand by Region

• Market Growth & Pricing

• Trends

• Technology

• Market Segmentation (for identification of target markets for value proposition)

• Customer Types

  • Identification of Customer Types

  • Customer Needs – Current, Future and Unmet

  • What is important to them?

• Barriers to Industry

• Codes & Standards

• Competitive Landscape with Market Share

 

B.  Competitive Analysis of Five Lighting Fixtures Manufacturers

 

In an initial brainstorming session, the senior and executive team identified five companies that they believed were the market leaders.  For each of those companies, we were contracted to evaluate, verify, and elaborate upon the topics below. 

 

• Size and Scope (Revenue, Employees)

• Key Markets, Customers, and Application Types

• Go-to-Market Strategy and Approach (agents/direct, channel partners, etc.)

• Price Range/Level

• Strengths, Weaknesses, Opportunities, and Threats (SWOT Analysis)

• Market Perception

• Primary Products (Key selling features and benefits)

• Technology/Innovation, Controls Usage and Implementation Approach

• Market Perceptions of Competitor (Agents, Distributors, Industry Organizations)

• Perceived Current & Future Strategy/Direction

• Manufacturing Facilities (Number and Locations), and Scope and Extent of Outsourcing and/or Insourcing

• Significant Alliances or Partnerships

• Involvement in Industry or Standards Organizations regarding the niche market (i.e. IES, NEMA, ANSI, local or regional organizations)

• Ballast & Lamp Suppliers, in proportion and scope

 

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 RESULTS

A.  Market Input and Voice of the Customer (VoC):  Direct market input was obtained by conducting over 40 interviews with end-users, IES committee members, competitor employees, manufacturers, agents, distributors, and contractors.

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B.  Market Size:  Determined that the market size was considerably higher than the client projected.

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C.  Market Share:  In the original brainstorming session, the client felt one company was the industry leader with about 30% share.  Our research proved that not only were they the leader, they dominated the industry with 60% market share!  One of the companies investigated was originally thought to have a small share, but it was revealed to be the #2 market leader primarily due to their regional emphasis and their end-user relationships.

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D. Market Segments, Customer Types and Customer Needs:  We identified three primary market segments with one accounting for over 50% of the market owing to the sheer number of projects, top line revenue and the highest margins.  For each of these segments, we identified specific customer types, applications, needs and other important factors. 

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E.  Pricing:  The two leading manufacturers focused on total lifetime cost, while the companies with smaller share centered on first cost.  Although the initial outlay was important to the customers, total lifetime cost was much more vital to the end-user decision makers.  The market share leader was not only able to secure most of the business, they had the highest prices.  The customers knew that this company was much more expensive than competitors, they still preferred to work with that company. 

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F.  Concluded that the market leader had a very firm grip on the market owing to their direct sales force, name recognition, end-user relationships, product (technology, performance and package) and also because they made it extremely easy for the end-user to plan and execute their projects.  This included funding, installation, and maintenance.

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G.  Based upon findings, the client was given recommendations on how we felt they should proceed.

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