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Market Identification
Market Identification
and Analysis The process of selecting the groups of customers
to focus on in a firm’s marketing mix.

It involves finding out why customers would buy from

you, dividing the market into segments according to
demographics and other characteristics, and then finding
the most profitable segments to include in your target
market.

It affords a more effective marketing mix that maximizes

your reach and profits

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Marketing Mix - select and

create the right marketing
Target market Identification
strategies
More effective marketing mix.

• PRODUCT Helps you choose the right marketing channels.

• PRICE

• PROMOTION
Uses limited time, money, and resources more
• PLACE efficiently
• PEOPLE

Maximizes sales and profits

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Market Analysis How?

A large part of market research and an important

component of business plan. A quantitative and Demographics
qualitative assessment of a market. Target
and Market Need
Market
It looks into the size of the market both in volume and
Segmentation
in value, the various customer segments and buying
patterns, the competition, and the economic environment
in terms of barriers to entry and regulation.
Barriers to
Competition Regulation
Forms the basis of the development of a marketing Entry
strategy and concrete marketing measures

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Demographics and Target Market

Segmentation
• Once you have estimated the market size you need to
explain to your reader which segment/s of the market
you view as your target market. The target market is
• The first step of the the type of customers you target within the market.
analysis consists in For example, if you are selling jewelry you can
assessing the size of the either be a generalist or decide to focus on the
market. When assessing the high end or the lower end of the market. This
size of the market, your section is relevant when your market has clear
approach will depend on the segments with different drivers of demand. In my
type of business you are example of jewels, value for money would be one of
selling to investors. the drivers of the lower end market whereas
exclusivity and prestige would drive the high end.

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Market Need THE 5 DRIVERS OF DEMAND

PRICE of the good or service- the law of demand
states that when prices rise, the quantity of demand
falls.
• Now it is time to focus on the more qualitative side INCOME OF BUYERS-when income rises, so will the
of the market analysis by looking at what drives the quantity demanded.
demand (divers of demand factors impact each
consumer's decision to buy something). This section PRICES OF RELATED GOODS OR SERVICES—either
is very important as it is where you show your complementary and purchased along with a particular
potential investor that you have an intimate item, or substitutes bought instead of a product
knowledge of your market. You know why they buy. TASTES or preferences of consumers - when the
Here you need to get into the details of the drivers public’s desires, emotions, or preferences change in
of demand for your product or services.
favor of a product, so does the quantity demanded.
CONSUMER EXPECTATIONS about whether prices for the
product will rise or fall in the future - when
people expect that the value of something will rise,
they demand more of it

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Competition Barriers to Entry

It protects your business from new competition.

The aim of this section is to

give a fair view of who you are
competing against. You need to
The idea here is to analyse your
explain your competitors'
competitor's angle to the market
positioning and describe their
in order to find a weakness that
strengths and weaknesses. You
your company will be able to use
should write this part in
in its own market positioning.
parallel with the Competitive
Edge part of the Strategy
section.

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Regulation
• Regulation refers to licenses and concessions in
particular or requirements by the authority to start
a business, which is usually one of the barriers to Primary Research -
entry. Explain the main regulations applicable to experts from a Secondary Research-
your business and which steps you are going to take target market are uses existing data
to remain compliant. interviewed in records from
order to collect previous surveys.
new data.

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In Market Classes of Competitors competitor a person, business, team, or

organization that competes against
Identification and you or your company. If somebody is
trying to beat you in a race, that
Analysis we have to Product Differentiation, person is your competitor
Positioning
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In business, we call a close a
categories: Market Structure competitor a rival. In other words,
rivals are the same size and make
similar products.

Market Segmentation & Size

If two companies are leaders in
their field, we refer to them as
Beachhead Market and arch rivals.
Creating your market

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There are 5 Direct competitors- a firm that sells the same

POSITIONING
and services as you in the same markets.

types of Potential competitors- a direct, indirect or

replacement competitor that currently has no

competitors:
distribution in our markets.

Indirect competitors- a firm that sells

different of products and services but are in
the same industry and same markets. • a strategic process that
marketers use to determine
Future competitors- a firm that has business the place or niche an
capabilities that would allow them to quickly offering should occupy in a
take market share if they entered your markets.
given market, relative to
other customer
Replacement competitors- a firm that sells
products and services that are in different alternatives.
industry that could be used as a substitute for
your products

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DIFFERENTIATION
Market Structure
is the process companies use to make a product
or service stand out from its competitors in • Market Structure refers to how different
ways that provide unique value to the customer. industries are classified and
differentiated based on their degree and
nature of competition for goods and
identifies a set of characteristics and benefits
services.
that make a product different and better for a
target audience

the goal of product differentiation is to create

a competitive advantage or to make your product
superior to alternatives on the market

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TYPES OR CATEGORIES OF MARKET STRUCTURE

Perfect
Competition
Monopolistic
Competition

Oligopoly

Monopoly

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Three (3) Criteria to Identify Different Market

Market Segmentation Segments
the process of separating, identifying,
and evaluating the layers of a market to
identify a target market.

seeks to identify targeted groups of Homogeneity – Distinction – Reaction – a

consumers to tailor products and branding common needs being unique similar
in a way that is attractive to the group. within a from other response to
helps companies minimize risk by figuring segment groups the market
out which products are the most likely to
earn a share of a target market and the
best ways to market and deliver those
products to the market.

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Market Segmentation Strategies Market Size

• Geographic Segments – customers are targeted locally, statewide,
regionally, or nationally
• Demographic Segments - customers are targeted by their age,
gender, race, income, and education level • The "market size" is made
up of the total number of
• Psychographic Segments - identification based on attitudes, potential buyers of a
beliefs, emotions, lifestyle, and hobbies product or service within a
given market, and the total
• Behavioral Segments - identification based on various patterns revenue that these sales
such as purchasing occasion and loyalty status may generate

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Product Pricing Competitive Pricing

• Competitive Pricing

• Cost-Oriented Pricing
• common among large companies and
• Flexible or Variable Pricing are aimed at undermining
• Penetration or Promotional Pricing competition
• Product Line Pricing
• predatory pricing - where a
• Relative Pricing company sets its price below cost
• Price Skimming to force its competitors out of
• Contract Pricing the market, is a typical
competitive pricing strategy

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Cost-Oriented Flexible or Variable

Pricing Pricing

• most straightforward • setting a range of prices for

the product
• based on production costs
plus mark-up • common when individual
bargaining takes place
• prices may vary according to
the individual buyer, time of
year, or time of day

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Product Line Pricing

Penetration or Promotional Pricing

• initially setting the product price

below the intended long-term price to
help secure the market a line of products may
be promoted and priced
limited range of
as “affordable” while
prices for all of the
another line may be a
products in that line
premium line with
higher prices

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Relative Pricing Price Skimming

• setting the price above, below, or at • setting a high market-entry price to recover costs
quickly before lowering the price to the long-term
the prevailing market price price
• few or no competitors

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Contract Pricing

• are arrangements between the buyer and

the seller in advance and usually
include the price, payment conditions,
grower responsibilities, storage, and
shipping arrangements

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