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What is a Market?

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Lecture 4. Targeting Markets

 

This tutorial includes the following topics:

Target Markets, Market Segmentation

Identify Market Segments. Segmentation Variables

Choosing Market Segments

Develop Marketing Strategy

Positioning Products and Services

 

Target Markets

 

In this tutorial we examine how marketers determine which groups of customers to target. This is a critical point in marketing planning since all additional marketing decisions are going to be directed toward satisfying the markets selected. For those new to marketing this may seem like a relatively easy decision to make. In fact, many inexperienced marketers will simply conclude that “We will just sell to whoever wants to buy.” However, this mind-set is both ineffective and inefficient as the marketer is likely to drain resources in their quest to locate those willing to buy. Using a target market approach an organization attempts to get the most from its resource by following a planned procedure for identify customers that appear to be the best candidates to respond to the marketer’s message.

 

What is a Market?

A market is consists of all the people or organizations that may have an interest in purchasing a company’s products or services. In other words, a market comprises all customers who have needs that may be fulfilled by an organization’s offerings. Yet just having a need is not enough to define a market. Many people may say they have a need for a California mansion that overlooks the Pacific Ocean but most would not be considered potential customers of a real estate agent who is attempting to sell such a property. So other factors come into play when defining a market.

 

The first factor is that markets consist of customers who are qualified to make a purchase. Qualified customers are defined as those who:

  • Seek a solution to a need, and
  • Are eligible (який може) to make a purchase, and
  • Possess the financial ability (можливість) to make the purchase, and
  • Have the authority(влада, право) to make the decision.

 

Note that a customer must meet ALL factors listed above, though for some markets the customer may have a surrogate (замінник) who will handle (мати справу) some of these qualifications for a targeted customer. For instance, a market may consist of pre-teen customers who have a need for certain clothing item but the actual purchase may rest with the pre-teens’ parents. So the parents could possibly assume(брати на себе) one or more surrogate roles (e.g., financial ability, authority) that will result in the pre-teen being a qualified customer.

 

A second factor for defining a market rests with the company’s ability to service the market. To an organization a market can only exist if the solutions sought by customers are ones that the company can satisfy with their offerings. If a company identifies a group of customers who are qualified to make purchases they only become a market for the company once the company is in a position to execute (виконувати) marketing activities designed(розроблені) to service(щоб обслуговувати) those customers.

 

Thus, for the purposes of this tutorial, a market is defined as a group of customers who are qualified(компетентний, здатний) to make purchases of products or services that a marketer is able to offer. However, even if an organization can offer products and services to a market, not all markets will fit (відповідають, підходять) an organization’s goals and objectives (цілі). With this in mind, we now turn our attention to examining the process marketers follow to choose which markets are best to target with their marketing effort. (на які ринки спрямовувати свої зусилля)


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