8. Is the market growing or present consumption, however, is not all that must be ascertained. It is also necessary to find the rate at which the business is increasing. If the annual growth is large, the manufacturer entering the field can expect to get a share of the business with com parative ease, because rapid increase ordinarily means a relatively undeveloped market and a strong de mand, part of which may be deflected from established brands. If the total business is stationary or decreas ing, or if it shows only a small increase, the manu facturer seeking to enter the market or to increase the sales of a product already on sale should investi gate the causes of this condition. He may find, first, that the market is limited and that it has reached the "point of saturation" in consumption; it is already taking all the goods it is capable of consuming. There are many such markets. The demand for can dles, for instance, is not keeping up with the increase in population, because newer methods of illumination are driving candles from the field. A market of this sort is not a promising one. If a manufacturer wishes to enter it, or, being in it, wishes to increase his own business, he must fight a purely competitive battle; his gain will be his competitors' loss. If his competitors match his own activities, the result will be increased sales cost for all without corresponding increase in sales.
Such a condition, however, is not typical. Ordi narily if total sales in any field arc not advancing, it is because those who occupy the field are not tak ing advantage of all the available opportunities. A manufacturer who ascertains this to be the case may enter a market with the reasonable hope of get ting good returns from intelligent marketing efforts. Ile can direct his salesmanship and advertising pri marily toward the educating of new customers. The total business will be increased, and he will get his share of it even tho his competitors may wake up and do their share in increasing consumption. A market that offers an opportunity for constructive sales ac tivities is always more attractive and more profitable to a manufacturer than one that'admits of merely com petitive marketing methods.
9. Comparison of consumption and production.— Altho it is interesting to get facts regarding consump tion for the entire country or even for the world, as indicative of the possibilities ahead of the successful business, the average small manufacturer will be in terested immediately only in figures regarding con sumption in the territory in which Ile wishes to oper ate. After obtaining figures for that territory he should compare them with his actual or estimated production. If the present consumption, taken into consideration with the expected increase based on the tendencies in the business, indicates that 100,000 bags of cement will be used the coming year in the district that the manufacturer can conveniently serve, and if his own annual production is 10,000 bags, he must get ten per cent of the total business if he is to operate his factory to capacity. Can he get this percentage?
Here enters the problem of competition. Who else is getting the business ? 10. Study of competition.—In connection with competition there are many questions to be asked and answered. How many competitors are there? The exact number can readily be learned from trade lists prepared by commercial agencies and trade publica tions. How long has each one been in business? What are the resources of .each? Commercial agen cies can also give information of this kind. It is valuable to the manufacturer because it shows him the strength of the competitive army with which he must fight for business; he will hope to do his part in making new customers, but even for this new business he must compete with the other manufacturers in his field. The modern business man does not do much talking about his competitors, but he knows who they are, what they are doing, and what they are able to do in the field in which he is operating. To ignore com petitors is to fight in the dark.
-11. 1?elative strength of competitors.—One of the most important questions to be asked regarding com petitors is the percentage of the present total business obtained by each. Suppose a manufacturer finds there are fourteen competitors in the territory that is naturally his. One of them gets seventy-five per cent of the business, one gets ten per cent, and the other twelve divide the remaining minute portion. This indicates overwhelming strength on the part of one competitor, and unusual weakness on the part of the others. If the new manufacturer needs ten per cent of the business in order to keep his plant running, in many cases he would decide that it would be cheaper and easier to go after the business of the trailers rather than to try to make a dent in the trade of the over shadowing leader. The progressive manufacturer is usually more eager to enter a market in which there are a few dominant figures and many unimportant trailers than one in which a large number are striving evenly for the business. If the biggest manufac turer now in a market- gets only fifteen per cent of the total business, and if be is closely followed by many others who get from ten per cent to twelve per cent of the trade, the new manufacturer who plans for a large output must rank from the outset well up among the leaders if he is to keep his plant busy.. This is not an easy task, and the manufacturer at tempting it must be well backed by capital and selling strategy.