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NEGOTIATION Lecture: 3

Markets

Definition & Selection

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NEGOTIATIONThree marketing lectures focus on developing the

marketing plan for the business idea

Idea – target market –secondary research – primary research – competition – analysis

= presentation

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NEGOTIATION

Marketing plan defines:

Where you areWhere you would like to beHow you are going to get there

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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– Growing or large– Supplied by businesses that are not inefficient or outdated– Has a niche or sector which can be exploited– Is not heavily dependant on price to help consumers select one product in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)

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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

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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.

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NEGOTIATIONEstimated 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

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Customer behaviourWho 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.

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NEGOTIATIONThings 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?

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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?

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NEGOTIATIONCould 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?

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NEGOTIATIONFor 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?

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NEGOTIATIONGeneral 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.

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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.