Marketing Concepts Overview

Recognizing and Understanding the Market

• Value Proposition (VP) is a statement summarizing why a customer should buy a product or service, adding value to their lives.
• Key elements of a VP include the target customer, needs/opportunity, product name, and company name.
• Competitors should be considered, and the Value Proposition should be truthful to establish credibility.
• Potential value propositions are common in small businesses.

Unique Selling Proposition (USP)

• USP defines how a product or service is sold to customers, addressing their needs and desires.

• Entrepreneurs should consider customer wants, successful brands, and competitor strategies when developing a USP.

• Tips for creating an effective USP for target customers include identifying and ranking product uniqueness, making the proposition very specific, and keeping it short and simple.

• A strong USP distinguishes a product from competitors.

Market Segmentation

• Essential methods for segmenting the market include:
  • Geographic Segmentation: Dividing the market by location (climate, dominant ethnic groups, culture, density).
  • Demographic Segmentation: Dividing the market based on consumer characteristics (age, gender, income, occupation, education, religion, ethnic group, family size).
  • Psychological Segmentation: Segmenting the market based on customer thoughts, beliefs, needs, attitudes, social class, personality traits, knowledge/awareness, brand identity, and lifestyles.
  • Behavioral Segmentation: Segmenting the market based on consumer behavior patterns (perceptions, knowledge, reactions, benefits, loyalty, responses).

Customer Requirements

• Customer requirements are specific characteristics customers seek in a product or service.
• Two types are service requirements and output requirements.

Service Requirement

• Intangible aspects of the fulfillment.
• Includes delivery speed, helpfulness, ease of payment and general customer treatment.

Output Requirements

• Tangible aspects that can be observed.
• Examples might include product specifications like sound quality or the on-time delivery of a service.

Market Size

• Crucial for entrepreneurs to calculate market size and potential value for startup businesses.
• Market research assists in identifying potential customers within a specific location.
• Market size encompasses the number of sellers/buyers in a specific market.
• Calculating market size includes estimation of potential customers who will buy the product or avail your services. Estimating those who won't also need to be considered. Finally, competitor share must be included.