Transcript 4. Market Profile Instructionsx

2.3 MARKET PROFILE
You’ve described the product in detail, now
describe the market in detail
Learning Objectives
• Students must…
• Understand that businesses focus their marketing effort by clearly
identifying their target market and by segmenting the market, e.g.
aiming the marketing of a new model skateboard to teenage boys
(and not girls or older men and women)
• Students should…
• Explain the process of market segmentation as one of identifying
the “dimensions” of a market (e.g. demographic dimensions,
geographic dimensions, and behavioural dimensions) that are most
likely to be influenced by the product and marketing effort
• Students could…
• Put a monetary dimension to the size of a market by estimating its
total population, percentage of population likely to buy the product,
the amount they could buy, and the price
Target Marketing and Market Segmentation
• Target marketing involves identifying a specific group of
consumers or businesses who will purchase a product, and
directing the marketing effort towards this group, e.g. young
males for computer games
• Market segmentation is the process of dividing a market into
distinct groups of consumers, such as by gender, age or
income, e.g. banks often target first year university students as
new customers
• A market segment is a group of consumers who are likely to
react in a similar way to the marketing effort (marketing mix),
e.g. young women shopping for business clothing want high
quality clothing at a low price
Market Dimensions
• Markets are divided into three dimensions:
• Demographic dimension
• Age (young adults)
• Ethnicity (Italian)
• Education (high school, university, graduate)
• Family size, class, income, family type and occupation
• Geographic dimension
• City, city size, urban, rural
• Country, region, state
• Behavioural dimensions
• Rate using the product
• Frequency of purchasing the product
• Loyalty to the product
• Type of shopper
Dimensions define the target market
• A clothing store may target 18 to 24 year old female
university students living in the UK who are familiar with
UK brands and are regular purchasers.
• Auto repair shops may survey car owners in their trading
area to find the make, model and year of their vehicles
and offer specials that might appeal to the needs of the
vehicle owners.
• A bank may offer free services to customers over 60 years
of age because their income from employment is smaller
in retirement than when younger
Niche Marketing
• USA says “nitch” as in itch
• French, others, say “knee shh” (French word for corner)
• Niche markets are small, well defined markets that exist
within a larger undifferentiated markets and which can be
a target market for a business, e.g. niche markets include
delicatessens, specialty food stores, auto parts stores,
stringed musical instrument stores - each serving a small
group of consumers by offering specialized products.
• Niche markets can be highly profitable because the
business can obtain higher prices, such as by providing
expert advice for which consumers will pay more
Try it – define the market segment for…
• (Market segments are defined by demographic, behavioural
and geographic market dimensions)
• Jewelry – high income, specialty shoppers, living in cities
• Costume jewelry (fake jewels) – low income, impulsive, everywhere
• New homes -
• University education –
• Continuing education courses • Blood sugar measuring equipment
• Frozen pizzas
• IKEA furniture
• Sports Utility Vehicles (SUV)
• Travel vacations
• Toys
Write 2.3 Marketing Profile section of the Marketing Plan
• Describe the market for your product using demographic,
geographic and behavioural marketing dimensions
• To extend this activity and learn more try to include an
estimation of the size of the market for your product in
your trading area (Dubai/Sharjah) by using the population
of the region (including expatriate workers), the proportion
of the population who might purchase your product, the
frequency they might purchase, the amount they might
purchase and the price of the good!
• The population of the UAE is around 8 million people.
Extension activity
(going for an “A”)
• Calculating the size of the market for skateboards in the UAE
• Estimates: UAE Population (8 million), half are male (0.5 x population), boys 10 to
20 years old are consumers of skateboards
• If population of males are assumed to be equally distributed over an average 80
year life span, then [8 million x 0.5 men] ÷ 80 years = 50 000 males are in each of
80 age groups (from 1 to 80 years old)
• The number of boys between 10 and 20 years old is about
[50 000 boys per age group x 10 age groups = 500 000 boys]
• If boys buy two skateboards in their life in the UAE then the number of skateboard
sales are [500 000 boys x 2 skateboards per boy = 1 000 000 skateboards]
• If skateboards cost an average of 300 Dirhams, the initial size of the skateboard
market in the UAE can be estimated to be [1 million x 300 Dhs] = 300 million Dhs
• Each year, 50 000 old boys leave and 50 000 new boys enter the market