LESSON 2 Flashcards
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When investors and entrepreneurs go after an existing market –the advantage is that there’s little or no market risk.
MARKET TYPES
MARKET TYPES
EXISTING MARKET
- Competitors exist
- Customers want and need better performance
- Technology is usually the driving factor
- The positioning is driven by the product and how much value customers place on its features
- The risk is to think that competitors are dumb or too slow
- There is no “chasm” that you need to fill. The chasm is the gap between early adopters and the mainstream customers in a market
MARKET TYPES
Existing market
Characteristics
customers and their preferences are unknown and direct competitors are non-existen
MARKET TYPES
NEW MARKET
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- Customers do not exist in the present, so revenue generation takes years
- Market size is zero
- Customers need to be made aware of their needs
- You must consider what factors can you create that has never been offered
- The chasm is biggest here because you will only be selling to the very early adopters
NEW MARKET
Characteristics
is a hybrid between a New market and an Existing market in the sense that it is a New Market created from a small segment from an existing market. The features of this market type are:
RE-SEGMENTED / NICHE MARKET
- Evaluate factors that your industry has long competed on and eliminate those
- Evaluate what factors can be reduced well below the industry standards
- Evaluate what factors can be increased above the industry standards
- Evaluate what factors can be created that have never been offered
- There is a bit of a chasm in this type of market
RE-SEGMENTED / NICHE MARKET
Characteristics
customers are known because you copied an existing market
CLONE MARKET
in this market type, you are going to localize all those specific issues for your country or region. That said, it takes a foreign business model and adapts it to local conditions
CLONE MARKET
- Adapts a foreign business model to a local condition (language, culture, import restrictions, and local regulations)
- Needs a large number of customers, typically >100 million
CLONE MARKET
Characteristics
is the practice of dividing your target market into approachable groups
MARKET SEGMENTATION
4 typws of market segmentation:
-Geographic
-Demographic
-Pshychograpic
-Behavioral
strategy focuses on a micro-segment of the marke = markets get better referrals for entrepreneurs, more repeat business, and have less competition due to its unique nature
Niche marketing
refers to the total market demand for a product or service
Total addressable market or TAM
It’s the maximum amount of revenue a business can possibly generate by selling their product or service in a specific market
Total addressable market or TAM
Estiamtes the portion of the TAM, that you can acquire given your limitation - geographic,
demographic, marketing and advertising spend, logistics, etc.
Serviceable adressable market or SAM
