According to Cooper, Emory, 1995, in Business Research Methods, literature review is defined as section examines recent (or historically significant) research studies, company data, or industry reports that act as a basis for the proposed study. On the other words, literature review is an in depth study about the research topic, by searching as many information's in order to critically evaluate the results of the research for the purpose of proving the hypothesis in the research.
4.1 COMPREHENSIVE STUDY ON MARKET POTENTIAL FOR THE RESEARCH TOPIC
4.1.1 Definition of market potential
According to personal.umich.edu, market potential is defined as the capacity of a location, such as a country, to become or to grow as a demander of goods and services that outside suppliers might provide. Various measures of market potential are provided especially for emerging economies, intended as guides to exports and foreign direct investment. On the other words, market potential is a measure of probable demand for a product or service in a classified geographic area. Hence, based on the case scenario, we would like to know can seaweed be marketed in Ampang area. In order to determine whether seaweed can be marketed or no, the study of market potential for seaweed is being applied. Related to that, there are elements in market potential need to be followed to get accurate results. From the market potential information, researcher will be able to determine and analyse markets for seaweed by the sales, awareness, taste, perception, price of the competitor product, purchase patterns and so forth.
4.1.2 Elements included in market potential
188.8.131.52 Target market
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The first elements that need to be considered in market potential are the target market and market segment for the product. According to bodyscan.human.cornell.edu, target market is defined as a set of people from the population to which a company wishes to sell. Target markets are typically defined by demographic information such as age, income level, ethnicity, or interests, and not by body size or shape. In other words, target market is a specific group of people that a company focus to do a research regarding their marketing plan for the products or services. For example, in researching information for seaweed, we have identified that the target market for seaweed is health conscious people. For instance, according to health.learninginfo.org, seaweed contains a lot of nutrients which can help to cure diseases such as cancer. The health conscious people will be one of the potential customers to buy this product.
Demographic is commonly refers as the study on people population regarding their age, gender, income, race, education and so forth. By determine demographic, researcher will be able to know general information about a population at a given time because demographic data consists of statistics about people. Related to that, demographic data will give information for the market potential of the product, such as seaweed. Demographic will provide useful information for the researcher such as people income level. It is because, customers are really special that they are differs in their needs and wants based on the income level etc. For example, some customer who has higher income level will buy the seaweed product more often and in large quantities vice versa. Related to that, we have outlined that potential customer are located at Ampang and the total amount of residents are 574 300. Therefore, we will do a research about the income level, race etc based on the data.
184.108.40.206 Income level
Income level is the average earnings of individuals. According to euromonitor.com, people are having more disposable income, therefore they have more buying power, and the demands for a particular product also increase. Income level is essential to be consider in market potential research as the information about income level will guide the researcher on what kind of product that the customer will buy such as a BMW car or a Proton car, how much quantity will potential customer buy for the product such as in small amount or large amount and how often the potential customer will buy the product at a moment as well as the average consumption such as in a month, how frequently they buy the product. For example, our group have outlined that the appropriate buyer for seaweed come from the middle class income which is RM 700 to RM 7, 000. It is because, seaweed product is affordable and cheap. It will encourage the buyer to buy seaweed regularly because seaweed is a choice of vegetable in the daily diet.
220.127.116.11 Consumer behaviour
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According to udel.edu, in determining consumer buying behaviour, a business need to understand why consumers make the purchase they make, what factors influence the consumer purchases, and also the changing factors in our society. For instance, we have to identify the reason why consumers purchase seaweeds, whether it is for health, cooking or any other reasons. In consumer behaviour, we would like to determine what is the customer perception about seaweed such as “do you think that seaweed is good for health” and their opinion about the taste of seaweed whether it is very good, good, average etc. The consumer behaviour also will provide information about how many seaweed products do they purchase and how often they buy seaweed. From the information in the questionnaire results, we will be able to conclude that whether seaweed can be marketed in the Ampang area or no after determine seaweed have the market potential in that area.
As a result, seaweed have a small market potential in Ampang area since the many of the customer are likely identified that seaweed is good for health.
According to wordnetweb.princeton.edu, competition is defined as a compete for something. In other words, competition is refers as two or more company strives to achieve their same goals. It is essential for a market researcher to determine the competition aspect, it is because, competition information will give information about the competitor product and the market share in the industry. For example, our group are necessarily would like to know about the competition for seaweed product because we want to know what is the competition in the industry, who is our competitor, what is our market share, and the market potential to be develop. So, it is important to know the competition information in order to know market potential for our product.
18.104.22.168 Economic in term of price of the product
The economic factor is also important in determining market potential for the proposed product that is seaweed. It is because, economic will give information on what will people pay for the product. So, it is necessarily for our group to identify the customer preferred price for seaweed and their opinion whether seaweed is affordable to be purchased. Therefore, we will be able to know the market potential for price placing for seaweed food product in the market.
22.214.171.124 Government incentives
Market potential for seaweed become more large as the government give full cooperation on supporting, developing and commencing seaweed in Malaysia. For example, according to moa.gov.my, government of Malaysia have estimate to spend RM 1.96 billion to help the agriculturist in expanding their business especially in seaweed. So, this point is important in considering market potential for seaweed for our group as the market potential for seaweed is increasing with the government support.
126.96.36.199 Ethnicity (Race and Culture)
On the other hand, the market potential for a product is also determined by the ethnicity of the buyer. It is commonly refers to the race and culture of the potential customers. For example, seaweed food is usually linked to Japanese, Chinese, Korean etc culture. It is because, the seaweed will be used in their cooking such as Sushi, soup, Kim Chi and so forth. Hence, it is important to know what are the potential customer opinion about seaweed regarding the race and culture that normally seaweed linked to. Based on the result, the most race or culture which being mentioned will reflect to the most race or culture that will buy the seaweed products.
4.2 HOW THE LITERATURE REVIEWS APPLY TO THE RESEARCH
4.2.1CRITICAL ANALYSIS ON DEMOGRAPHIC AND MARKET POTENTIAL OF THREE DIFFERENT AUTHORS OBTAINED FROM SECONDARY DATA
It is essential for a business organisation to determine their market potential. Specifically, demographic elements should be considered. It is because, demographic elements will give a huge impact to the market potential analysis as demographic factors contains of information about customer needs and wants. For example, the different income level shows different wants of customers. Market potential analysis is important to identify market opportunities and also provide a strategic management to the appliers. In order to implement market potential analysis, usually in depth study and research on demographic of certain focus group must be conducted. Some of the elements are target market, income level, consumer behaviour, competition, price of the product and race or culture of the focus group is being considered. According to the author of va-interactive.com, he has written on how to target customer by learning who your customer is and knowing the customer real needs. I agree with his clarification. However, the five steps his mention on targeting customer is not enough as customer are very unique and differ in their own way. Yes, it is true that market potential elements consists of target market, the five elements in target market that this author mentioned are identify potential customers, conducting market research, choosing a target market, compiling a customer profile and also resources. One of the points which are conducting a market research requires the researcher to ask about the demographic aspects and that is very important in order to know the potential customer behaviour and the customer varies in preferences. Come back to the issue, these five elements is not enough to determine target market for increasing market potential. Thus, I would like to recommend to the market researcher answering this few questions to targeting market as well as estimating the market in order to have a complete understanding on market potential and demographics. The researcher should understand what type of customer will buy the product or service, where are these focus group located, how many potential customers are there, how frequently they consume or use your product, who is your competitor, how much will they willing to pay for your product, what is the potential for the market to develop and what is your business or share in the market. I believed when all the market researcher follow the guideline, they can identify and categorize who is their potential customer and they are also able to determine the market potential for various focus group based on the demographic factors. It is because, all the points mentioned is very related to market potential.
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According to the author of entrepreneur.com, demographics is defined as a statistical view of a population, which generally includes age, gender, income, schooling, occupation and so on. The author stated that understanding the demographics of target customers is crucial for the success of a business. He added that a business has to identify its demographics in order to decide what elements will be included in the product and service mixes. In his opinion, he also thinks that demographic factors will affect a product's pricing, packaging, promotion, and place. In order to select the best location to carry out business activities, a business has to identify the demographic profile of the potential customers first. Therefore, a business has to consider the community's purchasing power which is the degree of disposable income, residences on whether the homes are owned or rented, means of transportation on whether the prospective customers own their own vehicles, age range, family status, and their leisure activities. A business has to consider these demographic traits to consider if the community can support the business or not. The author suggests that a detailed demographic information can be obtained from the Census Bureau's website. He personally thinks that the data on survey conducted by the Census Bureau is reliable and provides an overview on the characteristics of the community which are relevant to the business. I agree with the author's opinion on demographics as an important element to select a target market for the business. For a business to succeed, it has to consider the demographic traits of prospective customers in terms of age, gender, occupation, income level, and many more as mentioned above by the author. The demographic data from the Census Bureau is also a very useful source for a business to understand the demographic characteristics of a population. In addition to that, I suggest a business organisation to increase its understanding of customer lifestyles and behaviours in order to identify the market potential for that particular population. Different consumers have different preference and perception of a product. These differences in consumer perception and cultural practice has an effect on consumer behaviour, which would then affect the way a business enter and approach the market. Besides that, demographic factor should also include product and spending behaviour of consumers. A business can analyse the latest spending patterns and future expenditure trends in order to determine the growth and downturn in markets. The product mixes can only be planned after predicting the spending growth of consumers. Besides using the information from the Census Bureau, a company can also learn about their prospect customers through group research and survey.
According to the author Vinay Shriyan, a demographic factor gives impact on consumer behaviour. We have agreed on his statement by looking at current lifestyle. However, several issues are useful in the structure of consumer behaviour. Based on the current lifestyle, consumer behaviour is still depending on the factors of demographic such as race, age, education, and income level and so forth. The question here is, does social class gives impact on the consumer behaviour? Social class is a somewhat questionable subject that involves stratifying people into groups with various amounts of prestige, power, and privilege. In part because of the pioneering influence in American history, where status class is been divided clearly by the country, the status differentiations here are quite vague. We cannot, for example, associate social class with income, because a traditionally low status job as a plumber may today come with as much income as a traditionally more important job as a school teacher. In certain other cultures, however, stratification is more clear-cut. People nowadays with different social class are able to do almost similar consumer behaviour. By the existence of many hypermarkets such as TESCO that offer lower price on the similar product, it is actually good marketing planning in targeting all level of social income in Malaysia. By right, social class people also is part of huge income for the company to gain profit. Therefore, social class demographic is not gives any impact on the consumer behaviour due to so many company that targeted all customers by not referring to their social class status.