The general market trend can be characterized by slow growth and fluctuations up to 2016 when Brand I introduced its new product range, "Exceptional", with electronic controls. The product was first introduced in Region I as a test market. Then seeing its success, Brand I introduced the new washing machine range in Region IV accompanied by an extensive marketing campaign. These campaigns resulted in substantial market growth.
Market development and final forecast per region:
Region I: This region was used as a test market by Brand I for the introduction of its new washing machine product range in 2016. The test market was very successful resulting in an 3.8% increase in the first year in units, then 7.3% and 8.8% for the following years. We expect a correction in 2019, then a continued stable growth around 3% in unit sales. In value, the market growth was even more spectacular: 5.6%, 10.4% and 9.2% respectively. After a correction in 2019, the forecast model in value sales shows a growth pattern of around 4%.
Region IV: Seeing the success of the new models, Brand I launched and aggressive marketing campaign in 2017 which resulted in a 9.7 increase in units and a 10.2% in market value.
Region III: Second most important market with sluggish growth; The new product range will be introduced in 2019 but with limited marketing support. We project a growth rate approximately 2.5% in units but only a 1.2% growth in value.
Region II: slow growth, stagnating market. The new product range will be introduced in 2019 with a projected growth rate of 4.6% in units but only a 1.2% in value. The low increase in value is primarily due to selling many of the old models at discounted prices.
Other Regions: are projected to grow by approximately 1% in units but 2% in value on an average.
Region III and Other Regions will be our primary target markets. They will offer the largest growth potential to our brand due to our current strong distribution and relatively limited competition.
During 2020/21 will put more emphasis on Region III with the introduction of the new product range.
Potential target segments:
It is anticipated that by the end of the planning period, three brands will have introduced a new product range. Due to this competitive pressure price cutting may become an important factor which in turn will put pressure on the bottom line.
The total market growth in units is estimated to be round 4% per year during the planning period while the market growth in value will fluctuate between 0.1% and 6.2% .
In Region IV, which is the largest market, there is already strong competition. It is thus the Other Regions which will, primarily, offer expansion possibilities.