ENTREPRENEURSHIP & NEGOTIATION  Lecture: 3  Markets  Definition & Selection

ENTREPRENEURSHIP & NEGOTIATION Three marketing lectures focus on developing the marketing plan for the business idea Idea – target market –secondary research – primary research – competition – analysis = presentation

ENTREPRENEURSHIP & NEGOTIATION Marketing plan defines: Where you are Where you would like to be How you are going to get there

ENTREPRENEURSHIP & NEGOTIATION .. Ideal markets – Growing or large – Supplied by businesses that are not inefficient or outdated – Has a niche or sector which can be exploited – Is not heavily dependant on price to help consumers select one product in preference to another – Is not already supplied by products which are heavily branded (little customer loyalty to one brand or another)‏ – Is not dominated by two or three very large suppliers (instead has a number of small potential competitors)‏

ENTREPRENEURSHIP & NEGOTIATION  Purpose of the plan/objectives for finance How much finance is required Brief description of the business and its market Highlights of financial projections/what the money is for

ENTREPRENEURSHIP & NEGOTIATION What has to be researched and why Market structure and special characteristics - to determine what factors have to be taken into account in setting up the company and establishing a marketing, advertising and sales policy Market size and growth potential - to establish whether there is a capacity to make sufficient sales and profit and maintain long term growth and development of business Market segments and niche – (market segmentation) identifying a group of customers within the market that has common characteristics, needs, tastes and features.

ENTREPRENEURSHIP & NEGOTIATION Estimated share of business – is there sufficient room for another business and how much of the market will you be able to generate revenue from Customers – forecasting how many customers you will start off with and how you will grow your customer base Customer type - detailed description of your target customer Business to business - size, type, turnover, needs, buying policy, customer’s business objectives Business to consumer – demographics, age, affluence, family/personal situation, preferences, influences

ENTREPRENEURSHIP & NEGOTIATION Customer behaviour Who will buy – purchaser and/or consumer? Why will they buy? How much will they buy? How do they buy and pay? When will they buy? What influences them?

ENTERPRISING MANAGEMENT Competitors - the business must research the strengths and weaknesses of at least two main competitors Brand identity/how they serve the market/unique qualities/customer service/pricing policy/market position/special conditions Competitor response - how are they likely to react to a new competitor. Price war with heavy discounting? Negative publicity? Special offers? Tie-in deals to retain customer base? Changes in customer service and pricing policy.

ENTREPRENEURSHIP & NEGOTIATION Things to research and determine about your market grouping/target customer/market segmentation (niche)‏ Is your target market (or markets) a consumer market, a industrial,commercial or professional market?

ENTREPRENEURSHIP & NEGOTIATION Consumer market – Family and personal factors. Does age, sex, family size or marital status form the basis of different groups? – Does your product/service rely on supplying a local area/will location be a prime consideration? – Is social class important for your customer? – Can your product be tailored to appeal to heavy or light users? – Are there psychological or social factors at work? What’s important: bettering oneself, lifestyle, being part of the crowd, standing out from the crowd?

ENTREPRENEURSHIP & NEGOTIATION Could there be snob or prestige appeal, some customers like to think they are getting the best? Could price be a feature? top of the range, exclusive, expensive, luxurious value for money, added value cheapest no matter what Where do they buy now? Can you create a niche out of distribution methods?

ENTREPRENEURSHIP & NEGOTIATION For industrial, commercial, professional clients: What type of industry will you be selling into? You could specialise in one industry or professional (vertical marketing)‏ How big are the companies you are selling to? This could mean different procedures in purchasing and frequency? Can you create benefits from different order/purchase parameters? Will one group of customers require quicker or more frequent deliveries? Price could well create different market segments in industrial or professional users? Will one group of customers look for a higher level of after-sales care? Could this be your distinguishing feature?

ENTREPRENEURSHIP & NEGOTIATION General research common to business or consumer markets: Consider what other categories might apply to your market. Each market will have its own specialised characteristics apart from the general ones listed for each customer type. Look to see if there is a potential target group that has just one of the characteristics listed for business or consumer markets. This could define your specific target group.

ENTREPRENEURSHIP & NEGOTIATION Tutorial – workshop Establish the research criteria for a business target group and a consumer target group. Listing the parameters for each and determining any distinctions between the two market/customer types.