MARKET & MARKET IDENTIFICATION PROCESS
Market
refers to a group of consumers who share similar needs and wants and are capable of buying products.
Target Market
is a group of customers that a business has decided to aim its marketing efforts and ultimately its merchandise.
Niche Market
is the subset of the market on which a specific product is focused.
is also a small market segment.
Niches do not 'exist' but are 'created' by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them.
refers to a group of consumers who share similar needs and wants and are capable of buying products.
Target Market
is a group of customers that a business has decided to aim its marketing efforts and ultimately its merchandise.
Niche Market
is the subset of the market on which a specific product is focused.
is also a small market segment.
Niches do not 'exist' but are 'created' by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them.
The Market Identification Process
Market Identification
is a strategic marketing approach and process that is intended to define the specific customer of the product.
3 Strategic Marketing Approach
1. Market Segmentation
2. Market Targeting
3. Market Positioning
Market Segmentation
is an entrepreneurial marketing strategy designed primarily to divide the market into small segments with distinct needs, characteristics, or behavior.
Methods for Segmenting the Market
1.Geographic Segmentation
2.Demographic Segmentation
3.Psychological Segmentation
4.Behavioral Segmentation
Geographic Segmentation
the total market is divided according to geographical locations like provincial regions, cities, provinces, municipalities and even barangay units. When the entrepreneur divides the total market into smaller segments using this method, the following variables must be considered:
1.Climate
2.Dominant ethnic group
3.Culture
4.Density (rural or urban)
5.Classification of Geographical unit
Demographic Segmentation
the market is divided based on the demographic variables of the consumers.
1.Gender
2.Age
3.Income
4.Occupation
5.Education
6.Religion
7.Ethnic Group
8.Family Size
Psychological Segmentation
the market is divided in terms of what the customers think and believe.
1.Needs and wants
2.Attitude
3.Social class
4.Personality traits
5.Knowledge and awareness
6.Brand Concept
7.Lifestyle
Behavioral Segmentation
the market is divided based on the following variables.
1.Perceptions
2.Knowledge
3.Reactions
4.Benefits
5.Loyalty
6.Responses
Instruction:
- Identify a potential market then divide it into segments using the Geographic & Demographic segmentation. Use the variables age & income or income & occupation
Profiling
is describing the identified segments. It is the next step after segmenting.
This is needed so that the entrepreneur can identify which one has the biggest market size and which ones’ needs can be satisfied by the business.
Example:
Demographic Description:
Young & Serious Market Segment - Younger (aged 18 to 30 years), well educated, usually employed in office or skilled work, upwardly mobile, single or in a relationship
Old & Losing it Market Segment - Middle age group, anywhere from 30 to 60 years, mix of middle-class occupations, usually married and many have children at home
Segment Profile Examples>>
Important Factors in Segmenting the Market
1. Accessibility of the market segment - The market segment must be accessible to the business.
2. Size of the market segment - The market segment must be large enough to provide wealth to the entrepreneurial venture.
3. Distinction of the market segment - The market segment must be easily differentiated from the total market.
Instruction:
- Do a profiling for each market segment using the 3 important factors in segmenting the market.
Note: The 3rd factor is the description of the market segment. Show the clear difference of each segment by describing it.
is a strategic marketing approach and process that is intended to define the specific customer of the product.
3 Strategic Marketing Approach
1. Market Segmentation
2. Market Targeting
3. Market Positioning
Market Segmentation
is an entrepreneurial marketing strategy designed primarily to divide the market into small segments with distinct needs, characteristics, or behavior.
Methods for Segmenting the Market
1.Geographic Segmentation
2.Demographic Segmentation
3.Psychological Segmentation
4.Behavioral Segmentation
Geographic Segmentation
the total market is divided according to geographical locations like provincial regions, cities, provinces, municipalities and even barangay units. When the entrepreneur divides the total market into smaller segments using this method, the following variables must be considered:
1.Climate
2.Dominant ethnic group
3.Culture
4.Density (rural or urban)
5.Classification of Geographical unit
Demographic Segmentation
the market is divided based on the demographic variables of the consumers.
1.Gender
2.Age
3.Income
4.Occupation
5.Education
6.Religion
7.Ethnic Group
8.Family Size
Psychological Segmentation
the market is divided in terms of what the customers think and believe.
1.Needs and wants
2.Attitude
3.Social class
4.Personality traits
5.Knowledge and awareness
6.Brand Concept
7.Lifestyle
Behavioral Segmentation
the market is divided based on the following variables.
1.Perceptions
2.Knowledge
3.Reactions
4.Benefits
5.Loyalty
6.Responses
Instruction:
- Identify a potential market then divide it into segments using the Geographic & Demographic segmentation. Use the variables age & income or income & occupation
Profiling
is describing the identified segments. It is the next step after segmenting.
This is needed so that the entrepreneur can identify which one has the biggest market size and which ones’ needs can be satisfied by the business.
Example:
Demographic Description:
Young & Serious Market Segment - Younger (aged 18 to 30 years), well educated, usually employed in office or skilled work, upwardly mobile, single or in a relationship
Old & Losing it Market Segment - Middle age group, anywhere from 30 to 60 years, mix of middle-class occupations, usually married and many have children at home
Segment Profile Examples>>
Important Factors in Segmenting the Market
1. Accessibility of the market segment - The market segment must be accessible to the business.
2. Size of the market segment - The market segment must be large enough to provide wealth to the entrepreneurial venture.
3. Distinction of the market segment - The market segment must be easily differentiated from the total market.
Instruction:
- Do a profiling for each market segment using the 3 important factors in segmenting the market.
Note: The 3rd factor is the description of the market segment. Show the clear difference of each segment by describing it.
Market Segments |
Accessibility |
Size |
Distinction |
Young & Serious Market Segment |
Yes |
3,000,000 |
Younger (aged 18 to 30 years), well educated, usually employed in office or skilled work, upwardly mobile, single or in a relationship |
Old & Losing it Market Segment |
Yes |
1,000,000 |
Middle age group, anywhere from 30 to 60 years, mix of middle-class occupations, usually married and many have children at home |
Market Targeting
is a stage in market identification that aims to determine the set of buyers with common needs and characteristics.
Important Factors in Market Segment Evaluation
1. Size of the segment and its expected growth - The size and growth of a segment are considered favorable indicators for doing business in that particular location.
2. Existing and probable structure of the segment - The five forces of competition limits the profitability and growth of a particular venture, attracts the shifting of customers, brings the prices of the products down and controls the price of the product.
3. Capability of the business - The business have the required resources and competency to take advantage of the existing opportunity.
Existing and Probable Structure of the Segment
The entrepreneur may use Michael Porter’s five forces of competition in evaluating the present and future structures of the segment.
The profitability, growth and long-term survival of the entrepreneurial venture is measured by its successful efforts against competitive forces.
1. Potential new entrants/ Threat of new entrants
2. Threat of substitute products/ Threat of substitutes
3. Bargaining power of buyers/ Bargaining power of customers
4. Bargaining power of suppliers
5. Rivalry among existing firms/ Industry rivalry
Capability of the Business
Another factor that must be carefully evaluated by the entrepreneur is the internal environment of the business, including its resources. Does the business have the required competency to take advantage of the existing opportunity? The answer must be a resounding yes. Otherwise, the entrepreneurial venture may not be able to succeed in its chosen market segment.
SWOT Analysis
A SWOT analysis is an organized list of your business’s greatest strengths, weaknesses, opportunities, and threats. It is a popular tool to evaluate the internal environment. S.W.O.T. is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats.
Basic & Advanced SWOT Analysis>>
Instructions:
- Make a SWOT analysis
- List the strengths and weaknesses of your business enterprise as well as the opportunities & threats in the environment. Then place it in it's respective quadrant.
- Evaluate each market segment using the 3 important factors. Use the format below.
Market Segment Evaluation
Market Segments |
Size |
Growth |
Potential New Entrants |
Substitute Products |
Power of the Buyer |
Power of the Supplier |
Capability of the Business |
Priority of the Segment |
Young & Serious Market Segment |
3.0 M |
5% |
Strong |
Weak |
Strong |
Strong |
Low |
No. 2 |
Old & Losing it Market Segment |
1.0 M |
3% |
Weak |
Weak |
Weak |
Weak |
High |
No. 1 |
Market Segment Selection
Generally, the entrepreneur can select one segment or all segments of the total market with different entrepreneurial marketing strategies.
Market Targeting Strategies
1.Individual or One-on-One Marketing - the business provides a product that is suited or fitted to a particular need of the consumers. It is based on the concept that the consumers have different needs and wants. Examples: Tailoring shops and Furniture manufacturers
2.Differentiated Marketing - the entrepreneur covers several segments of the total market and designs a particular product for each segment based on the market segment evaluation and the capability of the business.
3.Concentrated Marketing/ Niche Marketing - the business select only a few segments but intends to serve a large number of customers in the chosen segment. This set of customers is the niche.
4.Mass or Undifferentiated Marketing - takes into consideration the fact that the customers have common needs and wants.
Generally, the entrepreneur can select one segment or all segments of the total market with different entrepreneurial marketing strategies.
Market Targeting Strategies
1.Individual or One-on-One Marketing - the business provides a product that is suited or fitted to a particular need of the consumers. It is based on the concept that the consumers have different needs and wants. Examples: Tailoring shops and Furniture manufacturers
2.Differentiated Marketing - the entrepreneur covers several segments of the total market and designs a particular product for each segment based on the market segment evaluation and the capability of the business.
3.Concentrated Marketing/ Niche Marketing - the business select only a few segments but intends to serve a large number of customers in the chosen segment. This set of customers is the niche.
4.Mass or Undifferentiated Marketing - takes into consideration the fact that the customers have common needs and wants.
Instructions:
- Choose a market targeting strategy that is aligned to your business' capabilities.
- Choose a market segment/s using the information in the profiling and evaluation.
Market Positioning
refers to the process of arranging a product to occupy a clear, distinct, and desirable place in relation to other competing products in the mindset of target consumers.
The first logical step that the entrepreneur must perform in market positioning is to determine that the product is truly differentiated from competitors, primarily in terms of value (price & quality) and benefits that the customers will gain from it.
There are Two Major Dimensions that will differentiate the product from its competitors in the market:
1.Lower Price
2.More Benefits
Positioning or Perceptual Map
shows the position of similar products competing in the market as perceived by the customers.
Instructions:
- Identify your competitors and their respective products.
- Differentiate their products in terms of price, quality & benefits (Identify the attributes or the benefits they've attached to their respective products).
- Plot your competitors' products on the perceptual map in terms of price and quality.
Evaluating the Benefits
Once the target position in terms of price and quality has been evaluated, the entrepreneur determines the advantages, benefits, and attributes of the product. It is highly suggested that a product must have a least one attribute which is considered distinct from other products. The entrepreneur must strongly promote the said attribute or benefit to the consumers.
Example: Powdered milk products may put emphasis on the muscle-building protein requirements for the youth and risk reduction of osteoporosis for adults.
Criteria in Identifying the Attributes or Benefits to be Promoted
1.Identifiable - the benefit is easily associated with the product.
2.Beneficial -the attribute provides valuable benefits to the target consumers.
3.Distinctive Advantage - the attribute is distinct to the product and can hardly be copied by the competitors.
4.Efficient and Rewarding - the cost in attaching the attribute to the product is not higher than the expected profit.
Instructions:
- Decide on what benefit will be attached to your own product.
- Evaluate the benefit you have decided to attach to your product by using the 4 criteria.
Deciding on the Market Position
2 Basic Dimensions to Consider in Deciding
1.Price
2.Quality
Guide questions in deciding the market position of the product:
1. Will the product be sold at a higher price due to its attributes and benefits?
2. Will the product be sold at the same price as the competitor's price in spite of its benefits?
3. Will the product be sold at the same price as the competitor's because they have similar benefits?
Instruction:
- Decide on the market position of your product in terms of price and quality then plot it on the perceptual map.
- Choose a market targeting strategy that is aligned to your business' capabilities.
- Choose a market segment/s using the information in the profiling and evaluation.
Market Positioning
refers to the process of arranging a product to occupy a clear, distinct, and desirable place in relation to other competing products in the mindset of target consumers.
The first logical step that the entrepreneur must perform in market positioning is to determine that the product is truly differentiated from competitors, primarily in terms of value (price & quality) and benefits that the customers will gain from it.
There are Two Major Dimensions that will differentiate the product from its competitors in the market:
1.Lower Price
2.More Benefits
Positioning or Perceptual Map
shows the position of similar products competing in the market as perceived by the customers.
Instructions:
- Identify your competitors and their respective products.
- Differentiate their products in terms of price, quality & benefits (Identify the attributes or the benefits they've attached to their respective products).
- Plot your competitors' products on the perceptual map in terms of price and quality.
Evaluating the Benefits
Once the target position in terms of price and quality has been evaluated, the entrepreneur determines the advantages, benefits, and attributes of the product. It is highly suggested that a product must have a least one attribute which is considered distinct from other products. The entrepreneur must strongly promote the said attribute or benefit to the consumers.
Example: Powdered milk products may put emphasis on the muscle-building protein requirements for the youth and risk reduction of osteoporosis for adults.
Criteria in Identifying the Attributes or Benefits to be Promoted
1.Identifiable - the benefit is easily associated with the product.
2.Beneficial -the attribute provides valuable benefits to the target consumers.
3.Distinctive Advantage - the attribute is distinct to the product and can hardly be copied by the competitors.
4.Efficient and Rewarding - the cost in attaching the attribute to the product is not higher than the expected profit.
Instructions:
- Decide on what benefit will be attached to your own product.
- Evaluate the benefit you have decided to attach to your product by using the 4 criteria.
Deciding on the Market Position
2 Basic Dimensions to Consider in Deciding
1.Price
2.Quality
Guide questions in deciding the market position of the product:
1. Will the product be sold at a higher price due to its attributes and benefits?
2. Will the product be sold at the same price as the competitor's price in spite of its benefits?
3. Will the product be sold at the same price as the competitor's because they have similar benefits?
Instruction:
- Decide on the market position of your product in terms of price and quality then plot it on the perceptual map.