SELECTING A TARGET MARKET: DEMOGRAPH ICS AND POWER

What Is A Market?

Market is a place where buyers and sellers meet, goods or services are offered for sale, and transfer of ownership occurs. It is a People with needs to satisfy, money to spend, and willingness to spend.The demand made by a certain group of potential buyers for a product or service.

SELECTING TARGET MARKET

Target market is a group of costumers at whom the organization specifically intends to aim its marketing effort.

1. Should be compatible with the organization’s goal and image.

2. Is to match the marketing opportunity with the company’s resources.

3. Should consciously seek markets that will generate a sufficient sales volume at a low enough cost.

4. Should seek a market wherein the number of competitors and their size are minimal.

TARGET MARKET STRATEGY

1. Market Aggregation- A total mass market. A production oriented strategy.

2. Market Segmentation-Smaller, homogeneous market segments. In market segmentation, the total heterogeneous market for a product is divided into several segments, each of which tends in the homogeneous is in all significant aspects. A costumer oriented philosophy.

a. Single Segmentation-involves in selecting as the target market one homogeneous group from within the total market. One marketing mix is then developed to reach this single segment.

b. Multiple segmentation-two or more different groups of potential costumers are identified as target market segments. Then the separate marketing mix is developed to reach each segment. Normally results in a greater sales volume.

3 Components of Market factors to Analyze

1. Studied by analyzing the geographic distribution and demographic composition of the population.

2. Analyzed through the distribution of costumer income and expenditure patterns.

3. Management must study their buying behavior.

Measuring the selected Markets

Market Potential-a company make quantitative estimates of the volume size of the market for the sellers product or service. Sales Potential-The sellers estimate its share of the total market.

A sales forecast is the foundation of all budgeting and short –term operational planning in all company departments-marketing, production and finance.

Benefits of Market Segmentation

1. Management can do a better marketing job and make more efficient use of marketing resources.

2. A small firm with limited resources might compete very effectively in one or two market segments

3. A company can design product that really match the market demands.

CONDITIONS FOR EFFECTIVE SEGMENTS

1. The basis for segmenting- the characteristics used to categorize costumer must be measurable and the data must be accessible.

2. The market segment itself should be accessible through existing marketing institution.

3. Each segment should be large enough to be profitable.

BASES FOR MARKET SEGMENTATION

Ultimate consumers- buy and/or use products or services for their personal or HH use.

Industrial Users-are business, industrial, or institutional organizations that buy products or services to use in their own businesses or to make other products.

BASES FOR SEGMENTING CONSUMER MARKETS

*People with wants, we can segment markets on demographic bases such as:

a. Regional population distribution

b. Urban-suburban-rural population

c. Age

d. Sex

e. Family life cycle stage

f. Others: race, religion, nationality, education, occupation

*with money to spend, segmentation can also be based on the distribution of disposal income.

*and the willingness to spend it. Via consumer buying behavior, where the prime determinants are:

1. Sociological factor such as:

a. cultural groups

b. Large social classes

c. small groups, including the family

2. Psychological (psychographic) factors such as:

a. Personality

b. Attitudes

c. Product benefits desired