Market timing as an Art Form



Posted: Thursday, June 14, 2007

by
Planet Berry LLC

Market timing is like a piece of art evolving towards its final destiny. Companies spend millions of dollars isolating focus groups to determine whether or not an idea has an end home or customer loyalty potential. The complexities and comparative analysis to current market conditions and overall past performance for like products is enormous. You can have the most creative idea backed by a company that can take your baby to the market but if it the economy is going in the wrong direction and you are selling diamonds then perhaps the best product design won’t sell due to timing.

Key factors that play out in the overall sales performance tracked from inception can deal with the weather, world politics, and local politics and in some cases environmental issues. Let’s take a look at the automobile industry. At Planet Berry we focus on green planet initiatives so this topic is relevant. The auto industry was riding profits on the heels of the basic truck design. From the truck was born the SUV. The SUV kept getting bigger and bigger until it lacked the sex appeal so we saw it morph into a vehicle targeting the affluent with lavish interiors and sleek exteriors. A far cry from the early days of the redesigned truck bed. But then something happened. The market began to slow down and disposable cash became a bit more challenging to shell out for a $50,000 truck. Then as inventories began to pile up the industry was hit with a war in Iraq and Afghanistan . Fuel prices suddenly rose to heights never seen before in the USA . Today we are staring at a range in the $3.50 to $4 per gallon. Rates seen only in Europe but clearly not in the USA where our country was built on the auto industry and not public transportation. Then as we entered the second term of President Bush the alternate party of choice began pushing the Global Warming problem. We happen to agree that there is a problem with Global Warming for the record and something needs to be done with fossil fuel in general. But this gets off the topic at hand. Finally, if all this wasn’t enough to derail a product we have China and its enormous pull on fuel inventories.

So, imagine trying to launch a fuel inefficient vehicle today! By no means are those items above the only issues facing the auto giants. But clearly it shows that they must be aware and plan for dynamic changes that could play out on their future sales. Thus Market Timing as an art. To succeed in business today you must fully understand your target market needs. Staying one step ahead of your competition is always paramount to overall success but establishing your course direction from a product design position is ultimately what will provide your future growth and thus probable success and thus profits. Investing in a database of information on trends and past performance is clearly a good decision. Depending on your budget, a comprehensive focus group approach is a great way to test market future ideas against a cross section of your proposed customers. So, to sum it up, market timing is a challenging art form and one that requires planning, review and open criticism in order to achieve ultimate success and providing your ideas and products with ample potential for positive results.

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