MARKETING DEFINING THE MARKET MARKET SEGMENTS MARKETING MIX HIGHER PRODUCT DESIGN MARKETING DEFINING THE MARKET MARKET SEGMENTS MARKETING MIX

Defining the Market A market can be defined as a group of potential buyers of a product or service. The size of the market will depend on the number of buyers of a particular product. Potential buyers of a product will have three things in common. INTEREST INCOME ACCESS

THE SIZE OF THE MARKET IS DETERMINED BY BOTH INTEREST AND INCOME. Defining the Market INTEREST The number of people who may have some level of interest in the product being marketed is known as the POTENTIAL MARKET. INCOME Interest in buying the product is not enough, they must be able to afford it. THE SIZE OF THE MARKET IS DETERMINED BY BOTH INTEREST AND INCOME. ACCESS The market size can be reduced even further, for example, if a company does not distribute or sell in certain areas.

Defining the Market From the available market, the company may wish to discourage users, eg mobile phones may be designed for people 12 and over - the company sees children under 12 as being too young to understand the complex interface of the phone. People under 12 may be interested in the phone, therefore are part of the POTENTIAL MARKET. However the Mobile phone company only wish to sell to people 12 and over. These people are known as the QUALIFIED AVAILABLE MARKET. The company may wish to serve all of the qualified available market or just a segment of it, eg aged 12 - 18. Whichever they decide is known as the SERVED MARKET. There are people within the served market who may already own the product. This is known as the PENETRATED MARKET.

QUALIFIEDAVAILABLE MARKET 25% Defining the Market TOTAL POPULATION 100% POTENTIAL MARKET 20% POTENTIAL MARKET 100% AVAILABLE MARKET 50% QUALIFIEDAVAILABLE MARKET 25% SERVED MARKET 12% PENETRATED MARKET 7% What %age of the total population is the product aimed at?

Defining the Market REVISION QUESTIONS Explain the difference between the potential market and the available market? Why is it necessary for a designer to know exactly who a product is being designed for? Give four examples of how effective market research would highlight aspects such as interest, income and access?

Market Segments When designing a product it is never possible to aim it at everyone. Most designers / companies practise TARGET MARKETING which directs products at one or more groups of consumers who share the same common needs and wants. MARKET SEGEMENTATION assists with dividing the population into different groups of people who have something in common. The four main groups used for market segmentation are: GEOGRAPHIC DEMOGRAPHIC PSYCHOGRAPHIC BEHAVIOURISTIC

Market Segments GEOGRAPHIC - such as countries, regions and cities DEMOGRAPHIC - such as age, sex, income, education, race PSYCHOGRAPHIC - such as personality, lifestyle, social class BEHAVIOURISTIC - such as purchase frequency, usage, benefits sought, brand loyalty Each of these market segments can be broken down further and products can be targeted at a much narrower group of people.

Market Segments SEGMENT BREAKDOWN EXAMPLE….. Demographic - Age 3 - 5 years old 6 -12 years old 13 - 18 years old 19 - 25 years old Each of these SEGMENTS would want / need different things from the same type of product. Each segment could be further divided using other demographic and behaviouristic factors. This strategy is known as NICHE MARKETING Using a product of your choice, explain the different wants / needs of the different market segments. 26 - 35 years old 36 - 50 years old 51 - 60 years old 60 years +

Market Segments REVISION QUESTIONS What is meant by the term ‘Target Market’? Describe two ways in which a market group can be selected What is a Market Niche?

Marketing Mix Although the designer is not involved in marketing or selling the product, it is useful for them to have some sort of understanding of what is involved to allow them to have input if they wish. The MARKETING MIX should be considered after the target market group has been decided on. The marketing mix consists of everything that can be done to influence the demand for the product. The influences are known as THE 4 P’s

The 4 P’s PRODUCT anything that can be offered to the market that will satisfy needs / wants. may be part of a range. PRICE the amount charged by the company for the product. the price should reflect the company image. PLACE how the company sells their product, eg shop, internet, catalogue. PROMOTION how the product is advertised, promoting the benefits to the buyers.

The 4 P’s REVISION QUESTIONS Visit www.ikea.co.uk/student_info.html to find out how successfully they use the 4P’s.