The market
Target Market
• A Market is a group of people or companies
who have a demand for goods and services
and are willing and able to buy it.
• Target Market a group of customers who will
be the focus of your company’s efforts.
• Know as much as you can about your Target
Market.
• Customize its product offerings and
marketing strategies to specific groups of
potential customers.
Target Market
• Market Segmentation: the process of grouping a
market into smaller subgroups defined by specific
characteristics.
• Market segments or subgroups of buyers with similar
characteristics.
• Geographics
• Demographics
• Psychographics
• Buying Characteristics
Target Market
• Market Segments
• Geographics: where they live; region, state, county, city, and/or
area
• Demographics: personal characteristics of population include
age, gender, family size, family life cycle, income, occupation,
education, religion, race, nationality, and/or social class
• Psychographics: social and psychological characteristicspersonality, values, opinions, beliefs, motivations, attitudes, and
lifestyle activities and interests
• Buying Characteristics: knowledge of and personal experiences
with the actual goods and services
Target Market
• Industrial Markets: Products for business use, they are
goods or components produced for sale to manufacturers
and used in the production of other goods.
• These markets are segmented differently.
• Variables include:
• Type of business, size, goods or services sold, geographic
location, and products needed.
Target Market
• Target Market: after you identify all market segments, you
select your target market.
• Guidelines to use when segmenting the target market
• Market segment should be measurable, you need to know how
many potential buyers are in the market.
• Segment should be large enough to be potentially profitable.
• Segment should be reachable.
• 1. get information about your product and its availability to interested
buyers.
• 2. be able to reach potential customers physically, deliver product
• Segment should be responsive, do you know that people in
segment are interested and willing to buy your product?
Conducting Market Research
• MARKET RESEARCH: is the collection and analysis of
information aimed at understanding the behavior of
consumers in a certain market.
• Identify potential markets
• Analyze demand
• Forecast sales
• Make other decisions
Why Conduct Market Research in New Product
Development?
- The product must appeal to the customer
(however widely defined)
- Timely market research can help you
mould the product to the consumer’s
need/wants
- Market research tend to point out
successes and failures before products are
launched “for real”
- As a result, it can save you money and
time
Conducting Market Research
The Market Research process is the same whether you are
doing research for an existing business or a new venture.
1. Identify the Focus of the Research
2. Select the Type of Market Research
3. Start the Research Process
Conducting Market Research
1. Identify the Focus of the Research
Focus your research so you do not waste time gathering useless
information.
2. Select the Type of Market Research
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Once you have research question you select a research approach.
Ways to structure research are called Research Designs
The information you require will determine the design you use.
Conducting Market Research
2. Select the Type of Market Research
1. Exploratory Research: used when you know very little about the
subject. It forms foundation for later research when you are
more focused. A good place to start is government or industry
publications. You can also talk to people who are knowledgeable
about your field.
You can organize Focus Groups – a group of people whose
opinions studied
Conducting Market Research
2. Select the Type of Market Research
2. Descriptive Research:
• When you want to determine status.
• Collect data through questionnaires,
interviews, or observations
3. Historical Research:
• Involves studying the past
• Patterns from the past can then be used to explain present
circumstances and predict future trends.
• Trade associations and trade publications are 2 sources of useful
historical information. And owners in similar business.
Start the Research Process
• An effective plan includes five steps:
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2.
3.
4.
5.
Identify Your Information Needs
Obtain Secondary Resources
Collect Primary Data
Organize the Data
Analyze the Data
Start the Research Process
• An effective plan includes five steps:
1. Identify Your Information Needs: what kind of information do
you need to know about your customer, industry….
2. Obtain Secondary Resources: information that has already
been collected by someone else. It is easily obtained and
inexpensive. A good source is on the Internet. Government
and community organizations are good sources. U.S. Census
Bureau’s – source for demographics. Chamber of Commerce
keeps statistics on local trends and economic issues.
Start the Research Process
3. Collect Primary Data: Information you collect yourself. Its
current and relates directly to your objectives.
Common methods are observation, interview, and surveys.
Surveys may be by telephone, through the
mail or online.
In-person surveys will achieve the highest level of
success, and high response rate than other
methods. Focus Groups are more efficient than
one-on-one interviews.
Start the Research Process
4. Organize the Data:
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Categorize the data based on the research question it answers. Working on
each question, note how many of your sources supported a particular
conclusion and how many did not.
Create charts and graphs to depict your findings and record your results in
report form.
5. Analyze the Data: ask some basic questions
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Is there a market for the product/service?
How big is the market?
Will the industry support such a business?
What do substitute products reveal about demand for the product?
What do customers, end users, and intermediaries predict the demand will
be?