Lesson 2: Recognizing Potential Market (Segmentation) Flashcards
- why the consumer should buy a product/service
- adds form of value in their lives
Value Proposition
- target customer
- needs/opportunity
- name of product
- name of enterprise
Value Proposition
- how you sell your product/service
- tagline
- desires of your customer
Unique Selling Proposition (USP)
- identify uniqueness
- be specific
- keep it short and simple (kiss)
what are the three factors that will determine your customers?
- target market
- customer requirements
- market size
determine the buyers with common needs and characteristics
target market
what are the 4 strategies in segmenting market?
- geographic segmentation
- demographic segmentation
- psychological segmentation
- behavioral segmentation
a. climate
b. dominant ethnic group
c. culture
d. density (either rural or urban)
geographic segmentation
a. gender
b. age
c. income
d. occupation
e. education
f. religion
g. ethnic group
h. family size
demographic segmentation
a. needs and wants
b. attitudes
c. social class
d. personality traits
e. knowledge and awareness
f. brand concept
g. lifestyle
psychological segmentation
a. perceptions
b. knowledge
c. reaction
d. benefits
e. loyalty
f. responses
behavioral segmentation
specific characteristics customers need from a service/product
customer requirements
2 types under customer requirements
- service requirement
- output requirement
intangible thing but can fulfill customers
- on-time delivery
- service with a smile
- easy-payment
- how customers expect to be treated
service requirement
tangible things
- customers will avail services as a product, then various service requirements can take a form of output requirements
output requirement
- most critical task to calculate
- approximate number of sellers and customers in one locality
market size
- to estimate the potential market
- to estimate the customers who will probably dislike your product/service
- to estimate the market share
market size
3 strategies for market sizing
- Total Available Market (TAM)
- Serviceable Available Marker (SAM)
- Serviceable Obtainable Market (SOM)
reference to the total market demand for goods or services
Total Available Market (TAM)
part of the TAM targeted by the entrepreneur’s goods or services that is within reach
Serviceable Available Market (SAM)
portion of SAM that realistically reachable
Serviceable Obtainable Market (SOM)
process of gathering, analyzing, and interpreting the information about the products or services to be offered for sale to the potential customers in the market
Market Research
inaccuracy cause mistakes leading to inaccurate results
data collection
3 methods to identify market needs
- Focus Group Discussion (FGD)
- Social listening
- Keyword Research
brings together 6-10 people in a room to provide feedback
Focus Group Discussion (FGD)
gives you access to what people are saying across social media and the web
Social Listening
use of search engines, most common words and phrases entered
Keyword Research
3 data collection techniques
- Survey
- Interview
- FGP - length of session 9-20 min., 8-10 members
Methods in marketing sizing
- To estimate the potential market
- To estimate the potential customers that will dislike your product/service
- To estimate the potential market share - calculate the market share of competitors to know your portion of the new venture
