Entrepreneurship Lesson 2 PDF

RECOGNIZE POTENTIAL MARKET Lesson 2 Activity: Name it, to win it!!! + -ba  + -ba Answer: Market  + + ER -be  + + ER -be Answer: Customer SEG + + + -L +N SEG + + + -L +N Answer: Segmentati...

RECOGNIZE POTENTIAL MARKET Lesson 2 Activity: Name it, to win it!!! + -ba  + -ba Answer: Market  + + ER -be  + + ER -be Answer: Customer SEG + + + -L +N SEG + + + -L +N Answer: Segmentation  + + ICS -I +O  + + ICS -I +O Answer: Demographics + +YOUR + ALL  + +YOUR + ALL Answer: Behavioral The success of an organization depends on how well it is able to deliver the right value to the right people. An organization selects a group of customers, identifies one or more of their needs, and offers products and services which can satisfy them. Therefore, it is impo ant to a company to identify the most suitable market to cater to. Analyzing the market Which market to cater to? ◦ Who are your potential customers? ◦ What are their consumption trends? ◦ What are the cultural aspects ◦ influencing their buying behavior? Analyzing the market ◦ What are the external factors that can disrupt or suppo a business? ◦ What is the degree of competitiveness in the market? Identifying the market and the customer Market Segmentation- involves segregating of the market into different groups of customers with different needs, preferences, characteristics, and behaviors. Demographics Segmentation ◦ Demographic segmentation is a most widely used approach to segment a market. This strategy enables the company to divide a large market into subsets based on distinct characteristics, need and wants. Some common variables of demographic segments are  Age Race Gender Income Marital Status Occupation For example, a company Victoria’s Secret deals in designing and marketing women lingerie and beauty products. They focused on women and “women” is the primary market segment in their marketing strategy. Victoria’s Secret is also segmenting their target market with product differentiation as PINK for teenage girls. Geographic Segmentation Geographic segmentation strategy enables a company to serve their customers in a specific area. In this segment the customer base is broad, and they have preferences based on their location. Small businesses not required to spends budget national and international adve isements. Large companies have the option to spread a universal message and separate message to each market. Some examples of geographic segmentations are based on  Continent Country Region Population density Urban, Suburban, Rural Climate City Village Victoria’s Secret is not only operating in America but expended it to geographies like UK and Europe. The currently have more than a dozen stores. Victoria’s lingerie brand is operating in almost 75 countries with more or less 1000 stores globally. It also has 990 sales points in USA. This company also expanded its geographical segments to China. It is expanding lingerie market. Psychographic Segmentation Psychographic segmentation allows marketers to segment market based on consumer personality traits, lifestyle and social class. Segmentation allows you to be er develop your product because there will be a more precise match between the product and each segment needs and wants. People have different interest and a itudes and personality traits. Some people may prefer bikes instead of cars. Some are very concern about the environment. Psychographic Segmentation took place when marketers segment a market based on these interests. Some of the variables of psychographic segmentation are  Social class Life style Culture Personality A itude Interests Victoria’s Secret is segmented its customer based on women personality and self-confidence. Todays’ Female Personality traits Victoria is targeting include looking sexy, fashionable, trying new looks and styles and open minded. Behavioral Segmentation Behavioral segmentation allows marketers to segment market upon consumer knowledge of product and service. Behavioral variables give deep customer insight and it is the sta ing point to build profitable market segments. According to some marketers, behavioral segmentation is the closest thing to a magic bullet. Some of the behavioural segmentation examples are  Benefits sought degree of loyalty buyer readiness User rate A itude See the example of Victoria’s secret, they have loyal customers because Victoria feels them alive and confident. Consumers purchase Victoria lingerie product line for prestige. Customers also prefer this brand during bi hdays and holidays. There are different market segmentation examples around us. Market segmentation is the first step in selecting target markets. It is the key element in the developing marketing strategy. Segmentation let marketers understand the overall market in a more meaningful way. By using this strategy, they can identify market gaps.