Chapter 4 Opportunity Analysis and Market Targeting

2 What is a Market? …the prospective buyers willing and able to purchase the existing or potential offering of an organization focus on buyers effective demand “offering” rather than product or service market share

3 Market Segmentation Questions can be answered for each market segment:  Who are they ?  What do they want to buy ?  How do they want to buy ?  When do they want to buy ?  Where do they want to buy ?  Why do they want to buy ?...is the breaking down or building up of potential buyers into groups (market segments).

4 Measures for Segmenting Markets  socioeconomic characteristics  buying and usage characteristics  benefits sought from product or service  attitudinal and lifestyle measures

5 Offering-Market Matrix Sample Matrix for Hand-held Calculators Market Segments (User Groups) (Uses) Business Scientific Home School Simple Moderate Complex Very Complex

6 Market Targeting Specifying segments to pursue: differentiated marketing - the organization simultaneously pursues several different market segments concentrated marketing - the organization focuses on a single market segment

7 Market Sales Potential and Profitability Chain Ratio Method Market Sales Potential is a function of: 1) the number of prospective buyers (B) 2)the quantity purchased (Q) 3)the price of an average unit (P) Market Sales Potential = B x Q x P

8 Sales and Profit Forecasting Reflects  the size of the target market  the marketing mix chosen for the target markets  the assumed number of competitors  competitive intensity in the target markets