What is market segmentation?

Target marketing involves the identification of the most profitable market segments. Therefore, businesses may decide to focus on just one or a few of these segments. They may develop products or services to satisfy each selected segment.

A market segment can be defined as subgroup of people or organization, sharing one or more characteristics that cause them to have similar product needs.

The purpose of segmentation is the concentration of marketing energy and force on the subdivision (or the market segment) to gain a competitive advantage within the segment.

The market segmentation is mentioned as being one of the key elements of modern marketing and is, as mentioned, the process of dividing the market into several groups and/or segment(s) based on factors such as demographic, geographic, psychological and behavioral factors. By doing so the marketers will have a better understanding of their target audience and thereby make their marketing more effective
What is market segmentation?  

What are emerging markets?

The term emerging markets was coined in 1981 by Antoine van Agtmael, the then director of the Capital Markets Department of the International Finance Corporation (IFC), the private sector development arm of the World Bank Group.

An emerging market, by definition, is a country that attempts to transform its economy by improving its operation to the levels of the world's more advanced nations.

In other words, emerging markets are financial markets of developing countries. They allow economies to become more competitive and more open to international investors. They have implemented liberal economic policies and practices such as adopting international financial standards abroad-based discriminatory controls for nondomiciled investors.

They are economies that present high risk but also potentially high rates of growth; they have low per capita Gross Domestic Product. Emerging markets are the result of the financial support programs of international institutions with the primary goal of creating stronger economies.
What are emerging markets?

Market segmentation

Market segmentation refers to the various segments of the market based on the common characteristics of the customers. Thus a market segment consists of a larger identifiable group within a market.

It is the analytical process of identifying the groups of buyers on the basis of differences in their desires or requirements. Market segmentation is bending supply to the will of demand.

In order to divide the total market into appropriate segments, an entrepreneur must consider segmentation variables, which are parameters that identify the particular dimensions that distinguish one form of market behavior from another.

For most products, the total potential market is too diverse or heterogeneous to be treated as a single market. Organizations tailor their offerings to fit the carefully defined needs of specific groups of customers by dividing the public at large into specific sub-markets.

Once the market segment is clearly identified, it becomes easier for an organization to make a product to appear different from those of its competitors.

For companies trading in numerous countries around the world, there is clearly an enormous attraction in finding a single global segmentation model that can be applied to every country.

The experience of ‘globalization’ has highlighted for many of these companies that they have to ‘act local’ in order to succeed in their market.

The basic goal of market segmentation is to determine the target market, which consists of a set of buyers who share common needs or characteristics that the company decides to serve.
Market segmentation

What is market potential?

New product forecast can represent different types of estimates. These include market potential sales potential, market forecast, and sales forecast.

Market potential is the total amount of a product that customers will purchase within a specified period at a specific level of industry wide marketing activity. It is therefore a prediction of maximum total market volume under a given set of condition.

Market potential can be stated in terms of dollars or units. A segment’s market potential is affected by economic, sociocultural, and other environmental forces.

Marketers must assume a certain general level of marketing effort in the industry when they estimated market potential.

The total market size represents market potential and is not a sales projection – rarely do produce sales get close to capturing the entire market due to many limitations.

An estimate of the size of the market, combine with information about company’s competitor, will be necessary to calculate the share of the market the company hold, as well as the market shares of the competitors.

Market potential figures are also useful in developing sales forecasts.
What is market potential?

Benefits of brands

Brands benefits producers, distributers and consumers. Brands such as Polo, Kit Kat and Quality Street has been nurture to generate healthy long term cash flow.

A brand is grounded in its fundamental elements – name, trademark, trade dress, taglines, slogans and so on and is the rightful property of the organization or person who own it.

Well known brands generally are priced at a premium, resulting in higher margins to the companies that sell them.

Strong brands create value for their shareholders by yielding higher returns than the overall market.

A powerful brands has a strong reputation in consumers’ minds, which acts as a barrier, protecting the brand against competitors.

Brand producers benefit from brands because they provide legal protection against imitators. A brand, properly registered and trademark, has a legal defense against another organization copying or infringing on its name, design, trade dress or other identifying elements.

Consumers value brands because they make personality statements about themselves. For conspicuous branded goods, for example cars and clothing, consumers value brands because they help project either an actual or an inspirational aspect of their personality.

A strong retail brand can make consumers life easier. It offers the consumer trust and reassures customers that they will get what they are looking for.
Benefits of brands

Production Concept Toward the Marketplace

Production Concept Toward the Marketplace
The production concept is one of the oldest concepts in business.

The Production Concept holds that consumers will favor those products that are widely available and low in cost. Managers of production oriented organizations concentrate on achieving high production efficiency and wide distribution.

The assumption that consumers are primarily interested on product availability and low price holds in at least two situations.

The first is where the demand for a product exceeds supply, as in many developing countries. Here consumers are more interested in obtaining the product than in its fine points.

The supplier will concentrate in finding ways to increase production.

The second situation is where the product’s cost is high and has the decreased to expand the market.

Some service organizations also follow the production concept. Many medical and dental practices are organized in assembly line principles, as are some government agencies such as immigration offices and licenses bureaus.

While it results in handling many cases per hour, this management orientation is open to charges of impersonality and poor service quality.
Production Concept Toward the Marketplace

Product and Market Development Across Cultures

Product and Market Development Across Cultures
Although some companies view themselves as pure marketing organizations that only focus on branding, the basis of existence of a global company is its product or services and the ability to develop or adapt product concepts for different markets. The most important decisi0n of a company is which products or product variations to market to which markets, therefore, marketers would work in close contact with research and development.

Many products sell better in some markets than in others, the cause of such variations can be wealth or culture. If the cause of low penetration of a specific product in a specific country is culturally defined, products should be adapted to better fit that culture.

New product market combination must be developed when products enter new markets of different configurations. Life insurance, for example, is a product for individualistic cultures; entering a market with a collectivistic culture demands different products. An example could be offering parent related pension insurance to the Singapore yuppies whose new mobile lifestyles make it more difficult to fulfill their obligations to look after their parents, a strong element of their collectivistic and Confusion values.

Well defined cultural differences can help to develop more appropriate products or product adaptations for different cultures. If certain do-it-yourself products do not sell as well in strong as in weak uncertainty avoidance cultures, adapt the product to the need for competence. Add instructions, offer training, whatever helps the market to feel more competent. Similarly, electronic appliances such as remote control devices should be easy to use for weak uncertainty avoidance cultures, but may have complicated details for strong uncertainty avoidance cultures where people want to control the process.
Product and Market Development Across Cultures

Definition of Market

Definition of Market
The concept of exchange leads to the concept of a market. What is a market? A market consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want.

Thus size of the market deepens on the number of persons who exhibit the need, have resources that interest others, and willing to offer these resources in exchanges for what they want.
Traditionally, a market was the place where buyers and sellers gathered to exchange their goods, such as a village square. Economists use the term to refer to a collection of buyers and sellers who transact over a particular product or product class; hence the housing market, the grain market and so on. Marketers, however, see the sellers as constituent the industry and the buyers as constituting the market.

The sellers send goods and services and communications to the market; in return they receive money and information.

Businesspeople use the term market colloquially to cover various groupings of customers. They talked about need markets (such as the diet seeking markets); product markets (such as the shoe market); demographic markets (such as the youth markets) and geographic markets (such as Australian market). Or they extend the concepts to cover noncustomer groupings as well as, such as voter markets, labor markets and donor market.
Definition of Market