Target Market Identification and Strategies

Target Market Identification

• Target market identifies buyers with shared needs and characteristics.
• Geographic Segmentation divides the market based on location.
• Demographic Segmentation includes factors like gender, age, income, occupation, education, religion, ethnic group, and family size.
• Psychological Segmentation considers customers' thoughts and beliefs.
• Behavioral Segmentation analyzes customers' behavior patterns with a company.

Customer Requirements

• Customer requirements define the specific characteristics sought in a product or service.
• Service Requirement refers to intangible products that fulfill customer needs.
• Output Requirements focus on tangible aspects expected from a product.

Market Size

• Market size impacts the scale of business operations for entrepreneurs.

Strategies for Reaching Target Markets

• Undifferentiated Marketing targets all customers with a single marketing mix.
• Differentiated Marketing uses different marketing mixes for various products.
• Concentrated Marketing (Niche Marketing) focuses all resources on a single market segment.
• Micromarketing targets very specific customer groups, such as by ZIP code.

Marketing Mix

• The marketing mix encompasses actions used to promote a brand or product.
• Product refers to the goods or services offered to customers.

Types of Products

• Breakthrough Products deliver new performance benefits.
• Differentiated Products occupy unique spaces in customers' minds.
• Copycat Products have less impact on consumers' perceptions.
• Niche Products have limited reach, visibility, and pricing.

Pricing Strategies

• Cost Plus Pricing determines prices based on a percentage mark-up of costs.
• Cost-Based Pricing calculates prices based on the cost of sales.
• Optional Pricing adds extra services/products for additional revenue.
• Premium Pricing sets high prices to convey exclusivity.
• Psychological Pricing considers consumer perception of price.
• Product Line Pricing varies prices within a range of related products.
• Competitive Pricing benchmarks prices against competitors.
• Skimming starts with high initial prices, later lowering them.
• Penetration Pricing uses low prices to quickly gain market share.
• Bundling sells multiple products or services together at a reduced price.
• Packaging influences the external appearance of products.

Business Plan

• A business plan is a blueprint for engaging in business.

Components of a Business Plan

• Executive Summary provides a brief description of the business.
• Introduction clearly explains the business concept.
• Product or Service Description details the proposed offering.
• Industry Analysis studies firms producing similar products/services.
• Market Analysis identifies and quantifies target markets.
• Production or Operational Plan outlines operational specifics (Materials, machines, men, money).
• Marketing Plan details how to reach target customers.
• Organizational Plan describes the business's legal form.

Competition and Industry Dynamics

• Competition involves efforts to win market share.
• Industry refers to manufacturers producing similar goods.

Five Forces in Industry Competition

• Buyers are customers exchanging cash for goods.
• Potential New Entrants are businesses capable of entering a market.
• Rivalry involves competition among existing businesses.
• Substitute Products serve the same function as others.
• Suppliers provide necessary resources for operations.

Identifying Business Opportunities

• Assess personal interests in the business of choice.
• Understand customer requirements to meet market needs.
• Evaluate the feasibility and viability of business ideas.
• Calculate profitability through sales minus expenses.
• Focus on innovation or differentiation for competitive advantage.

SWOT Analysis

• A framework to identify internal and external factors affecting business:
  • Strengths (Internal) bolster successful outcomes.
  • Weaknesses (Internal) hinder success.
  • Opportunities (External) can be leveraged for advantage.
  • Threats (External) may jeopardize projects.

Value Proposition (VP)

• Summarizes reasons for consumers to purchase a product or service.

Essential Elements of a Good Value Proposition

• Target Customer
• Customer Needs/Opportunities
• Product Name
• Company Name

Unique Selling Proposition (USP)

• Reflects how the product or service is presented to customers.