Determining Market Size - Infant Formula: Difference between revisions

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Revision as of 13:47, 7 October 2009

Premise

An food engineering firm has been tinkering with soy beans and believes they can create an improved lactose-free infant formula. They're unfamiliar with the baby food industry and are trying to decide whether to launch their own product or sell their patent to an existing player. Your team of outside consultants has been hired to conduct some preliminary market research to help them with this decision. Your first task is to determine the market size for infant formula.


Preparation

The librarian should be prepared with a spreadsheet containing labels and formulas for calculating market share, to which data discovered during the case can be added, resulting in several alternative market size calculations at the end of the case. Depending on the data available the spreadsheet might look like this:

Source 1 High Estimate Source 1 Low Estimate Source 2 High Estimate Source 2 Low Estimate
Total number of infants
(multiplied by) Percentage consuming formula
(multiplied by) Dollar value of formula one infant consumes per year
(equals) Market Size


Preliminary Discussion

The librarian can suggest that while the main question of interest is "What is the market size for infant formula?", this question can best be answered by first discovering answers to smaller questions. A discussion should ensue where students brainstorm additional questions that can help them arrive at a dollar figure for the market size of infant formula. Examples may include:

  • How many infants are there?
  • How many infants drink formula vs. breastfeeding?
  • How much formula does an infant drink?
  • What is the price range for formula?

As this is a brainstorming exercise, the librarian should list these questions on the board without discouraging any ideas. The librarian can then use these questions to illustrate the relative advantages of primary and secondary research, how each can address these information needs with varying effectiveness and cost, and which the library can assist with. The librarian can then point out that the focus of this case is not to fully demonstrate the best way to determine a market's size, but to give students the opportunity to explore some of the resources that would be useful in such a task. Not all of the questions listed will be addressed, and in some cases assumptions will be made simply for the sake of moving on to the next stage of the case.


First Resource

The librarian may demonstrate the ease with which market research reports on almost any topic can be found on the Internet. Students should be quick to note that hefty price tags invariably attached to such reports (searching the MarketResearch.com site for "infant formula" is illustrative). The librarian can then explain that while the university cannot provide every market research report, there are some limited collections available. Depending on the library's subscriptions these may include sources like Mintel, Datamonitor, IBIS World, MarketResearch.com Academic, Frost & Sullivan, or any number of others.

During a brief demonstration of the resource the librarian can discuss principles of information literacy specific to that resource, such as the currency of information and how students can discover relevant trends and data in reports that may not at first seem relevant to their research topic. The librarian can then allow them time to explore the resource on their own (preferably in teams), looking for information that can help answer any of the questions discussed during the brainstorming session. Volunteers can share what they have found with the class.

Among these discoveries should be either the


If students do not discover it on their own, the librarian might point out



After this demonstration students should be given several minutes to explore the resource on their own, with the objective of obtaining information that can aid in identifying a target consumer. One or two students can then share their findings with the group. Details they uncover could include the fact that breakfast is the meal most commonly replaced by such foods, or that middle-aged consumers are more likely to be concerned about the nutritional content of food bars. A discussion can result in students arriving at a portrait of their target consumer: someone active and health-conscious, someone in their 40s, someone with higher than average income, most likely a professional who skips breakfast in order to rush to the office in the morning. Hence the case's title: The Commuter Bar.

The details students discover will vary, and the librarian should be prepared to use whatever the students find--there is no right answer for the purposes of this case. Given the constraints of the instructional context, this process will not be rigorous. The librarian should stress to the students that the purpose of the activity is not to demonstrate how to decide on a product's positioning, but to gain familiarity with information sources that could help in such a project.


Second Resource

Many students, hoping for low-hanging fruit, will be disappointed when they cannot find, or the library cannot provide, reports that are both current and address their product's particular niche. The best sources for more current and more narrowly focused information are news and trade publications, such as Nutraceuticals World. The librarian can describe the differences between a trade or industry publication and news and scholarly publications. After a demonstration of an aggregator of such publications, such as Factiva, ABI/Inform, LexisNexis, or RDS Business & Industry, students should be given several minutes to search for articles containing information that further illuminates the market for food bars. One or two can then share what they have found.


Third Resource (Optional)

With an understanding of the target consumer gleaned from their brief experiences with market research reports and trade journals (and perhaps some acknowledged assumptions), students can now consider how best to find or reach these consumers. The librarian can demonstrate a source for demographic information such as American Factfinder on the U.S. Census Bureau’s website (http://factfinder.census.gov/), a print resource like ESRI's Community Sourcebook of ZIP Code Demographics, or a combined GIS and marketing tool like SimplyMap. For more efficient use of time the librarian should preselect two comparable geographies, such as Denver and Baltimore, and give the students several minutes to use the demonstrated resource to determine which place best reflects the characteristics of the target demographic.

Alternatively, a tool like Simmons, MRI+, or SRDS could be demonstrated and then used to identify the media outlets in which advertisements would reach the target.


Wrap Up

Researching a market and positioning a product requires a significant investment of time and money. Students should be reminded that the approach taken during the case was quick, dirty, and riddled with assumptions. The purpose was not to teach students how best to accomplish these tasks (that is their professors' job), but to give them experience with information sources that would be useful in accomplishing these tasks.

The librarian should take the opportunity to review key principles uncovered during the session, including the appropriate use and limitations of prepackaged market research reports, the distinction between primary and secondary research, and the kinds of information the library can provide.


Submitted By

Andy Spackman
Business and Economics Librarian
Brigham Young University
andy_spackman@byu.edu
http://www.lib.byu.edu/business/

Originally Submitted: October 5, 2009