Page 159 - DMGT521_PROJECT_MANAGEMENT

Project Management

Notes The methods of distribution and sales promotion employed presently and their rationale must
be specified. Such a study may explain certain patterns of consumption and highlight the difficulties
that may be encountered in marketing the proposed products.

Consumers

Consumers may be characterized along two dimensions as follows:

Table 9.2
Demographical and Sociological
Attitudinal
Age Preferences
Sex Intentions
Income Habits
Profession Attitudes
Residence Responses
Social background

Supply and Competition

It is necessary to know the existing sources of supply and whether they are foreign or domestic.
For domestic sources of supply, information along the following lines may be gathered: location,
present production capacity, planned expansion, capacity utilisation level, bottlenecks in
production, and cost structure.
Competition from substitutes and near substitutes should be specified because almost any
product may be replaced by some other product as a result of relative changes in price, quality,
availability, promotional effort, and so on.

Government Policy

The role of the government in influencing the demand and market for a product may be
significant. Governmental plans, policies, and legislations, which have a bearing on the market
and demand of the product under examination, should be spelt out. These are reflected in
production targets in national plans, import and export trade controls, import duties, export
incentives, excise duties, sales tax, industrial licensing, preferential purchases, credit controls,
financial regulations, and subsidies/penalties of various kinds.

Did u know? Competition from substitutes and near substitutes should be specified because
almost any product may be replaced by some other product as a result of relative changes
in price, quality, availability, promotional effort, and so on.

9.7 Risk Analysis in Capital Investment Decisions

Design projects are inherently risky. Every project is different in some way and this carries with
it uncertainties. In project management parlance, risk is the term used to describe the amount of
uncertainty and number of threats (elements that threaten the success of the project) that exist or
potentially exist in a project. The greater the amount of uncertainty and number of threats, the
greater the risk (see Figure 9.1).

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