Understanding the Market: Value Proposition, Target Market, and Market Size

RECOGNIZE AND UNDERSTAND THE MARKET Module 3 WHAT IS VALUE PROPOSITION? A value proposition is a simple explanation or statement of why people should choose your product or service. It tells them what problem you solve, how you help them, and why you’re better than others. EXAMPLE: “Healt...

RECOGNIZE AND UNDERSTAND THE MARKET Module 3 WHAT IS VALUE PROPOSITION? A value proposition is a simple explanation or statement of why people should choose your product or service. It tells them what problem you solve, how you help them, and why you’re better than others. EXAMPLE: “Healthy, delicious meals delivered to your doorstep in under 30 minutes, saving you time and helping you eat better.” What problem are you solving? How do you help? Why are you better? In creating Value Proposition, entrepreneurs will consider the basic elements: Target customer Needs/Opportunity Name of the product Name of the enterprise/company Value Proposition: “FreshBite Meal Kits by FreshBite Inc. delivers pre-portioned, ready-to-cook healthy meals for busy professionals who want to save time while eating well. With our easy recipes and fresh ingredients, you’ll have a delicious meal on your Busy table in under professionals 20 minutes—no who struggle grocery shoppingto required!” find time to cook healthy meals. Target customer:They need convenient, healthy food options that fit into their busy schedules. Needs/Opportunity: FreshBite Meal Kits FreshBite Inc. BUSINESS LOGO WHAT IS UNIQUE SELLING PROPOSITION? A UNIQUE SELLING PROPOSITION REFERS TO HOW YOU SELL YOUR PRODUCT OR SERVICES TO YOUR CUSTOMER. You will address the wants and desires of your customers. EXAMPLE: “Healthy, delicious meals delivered to your doorstep in under 30 minutes, saving you time and helping you eat better.” What do the customers want? What brand does well? What does your competitor sell well? WHAT IS TARGET MARKET is the specific group of people or businesses that a company aims to sell its products or services to. These are the customers most likely to be interested in what the company offers, based Example: on factors For a healthy like age, meal delivery income, service, the target lifestyle, market mightlocation, be: and needs. Busy professionals who don’t have time to cook but want healthy meals. Health-conscious individuals who prefer nutritious food options. Fitness enthusiasts who want balanced meals to support their workouts. Commonly used methods for segmenting the markets are follows: 1. Geographic Segmentation- the total market is divided according to geographical location. Variables to consider: -Climate -Dominant Ethnic Group -Culture -Density (either rural or urban) 2. Demographic Segmentation- divided based on consumers. Variables to consider: -Gender -Age -Income -Occupation -Education -Religion -Ethnic Group -Family Size 3. Psychological Segmentation- divided in terms of how customers think and believe Variables to consider: -Needs and wants -Attitudes -Social class -Personality traits -Knowledge and awareness -Brand concept -Lifestyle 4. Behavioral Segmentation- divided according to customers’ behavior pattern as they interact with a company. Variables to consider: -Perceptions -Knowledge -Reaction -Benefits -Loyalty -Responses CUSTOMER REQUIREENTS Customer requirements are the specific characteristics that the customers need from a product or a service. There can be two type of customer requirements: 1. Service Requirement 2. Output Requirement TYPES OF CUSTOMER REQUIREMENTS: 1.Service Requirement – What customers expect from the service experience. 1.Example: A food delivery service should be fast, friendly, and reliable. 2.Example: A hotel should provide clean rooms, good customer service, and a comfortable stay. 2.Output Requirement – The final result or quality of the product/service. 1.Example: A customer buying a laptop expects it to be fast, durable, and have long battery life. 2.Example: A person getting a haircut expects it to look stylish and well-done. MARKET SIZE Market size is the total number of potential customers or the total sales value of a product or service in a specific market. It helps businesses understand how big the opportunity is for selling their product. Example: The market size for fast food in the U.S. is huge because millions of people eat fast food every day, generating billions of dollars in sales. The market size for electric cars is growing as more people switch from gas-powered cars. Right now, it’s smaller than the regular car market, but it has the  END OF PRESENTATION