Module 4 - Market Identification

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PHILIPPINE COLLEGE OF SCIENCE & TECHNOLOGY

OLD NALSIAN ROAD, BRGY. NALSIAN, CALASIAO, PANGASINAN
MARKET IDENTIFICATION
❑ Target market identification is the process of selecting
the groups of customers to focus on in a firm’s
marketing mix.
❑ A target market is a group of people with some shared
characteristics that a company has identified as
potential customers for its products.
❑ Identifying the target market informs the decision-
making process as a company designs, packages, and
markets its product.
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❑ A target market may be broadly categorized by age
range, location, income and lifestyle. Many other
demographics may be considered. Their stage of life,
their hobbies, interests, and careers, all may be
considered.
❑ A target market is a group of customers with shared
demographics who have been identified as the most likely buyers
of a company’s product or service.
❑ Identifying the target market is important for any company in the
development and implementation of a successful marketing plan.
❑ The target market also can inform a product’s specifications,
packaging, and distribution.
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❑ Target market identification involves selecting one or more
market segments or groups of customers to target in your
marketing mix.
❑ The idea is that tailoring that mix to address the unique needs
and desires of your target market can ultimately be more
profitable for the firm than mass marketing toward every
would-be buyer in the overall market.
❑ The marketing mix includes the five P’s namely: Product (what you’re
selling), Price (how much you’re charging), Place (where you’re selling),
Promotion (how you’re communicating the product’s benefits), and
People (how you and team can give you a competitive edge).
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5 P’s of Marketing
❑ The 5 P’s of Marketing – Product, Price, Promotion,
Place, and People – are key marketing elements used to
position a business strategically.
❑ The 5 P’s of Marketing, also known as the marketing
mix, are variables that managers and owners control to
satisfy customers in their target market, add value to
their business, and help differentiate their business from
competitors.
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Marketing Mix
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Product
❑ Product refers to the products and services offered by a
business. Product decisions include function, packaging,
appearance, warranty, quality, etc.
❑ Customers need to understand the features,
advantages, and benefits that can be enjoyed by buying
goods or services. When thinking about a product,
consider the key features, benefits, and the needs and
wants of customers.
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Price
❑ Price refers to the pricing strategy for products and
services and how it will affect customers. Pricing
decisions do not include just the selling price, but also
discounts, payment arrangements, credit terms, and any
price-matching services offered.
❑ When determining a pricing strategy, it is important to
consider the business’s position in the current
marketplace. For example, if the business is advertised
as a high-quality provider of mechanical equipment, the
product pricing should reflect that.
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Promotion
❑ Promotion refers to the activities that make the business
more known to consumers. It includes items such as
sponsorships, advertising, and public relations activities.
❑ Since promotion costs can be substantial, it is essential
to conduct a break even analysis when making
promotion decisions. It is important to understand the
value of a customer and whether it is worth conducting
promotions to acquire them.
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Place
❑ Place refers to where the product/service of the business is
seen, made, sold, or distributed. In essence, place decisions
are associated with distribution channels and ways of
getting the product to targeted key customers.
❑ It is important to consider how accessible the product or
service is and ensure that customers can easily find you. The
product or service must be available to customers at the
right time, at the right place, and in the right quantity.
❑ For example, a business may want to provide their products
over an e-commerce site, or a retail store, or through a third
party distributor.
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People
❑ People refer to the staff, salespeople, and those who
work for the business. People decisions are usually
centered around customer service – how do you want
your employees to be perceived by customers?
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Understanding Target Markets

❑ Few products today are designed to appeal to absolutely
everyone.
❑ Part of the success of selling a good or service is
knowing to whom it will appeal and who will ultimately
buy it. Its user base can grow over time through
additional marketing, advertising, and word of mouth.
❑ That’s why business spend a lot of time and money to
define their initial target markets, and why they follow
through with special offers, social media campaigns, and
specialized advertising.
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How Target Market Identification Works

❑ No matter how broadly appealing you think your
product or service is, not everyone will need or want to
buy it. And gearing your marketing efforts toward the
overall market (be it the consumer, industrial, or reseller
market) can waste time and money. To maximize your
each and profits, you may want to consider targeted
marketing approach where you identify a smaller target
market from the overall market and focus your
marketing mix market.
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How Target Market Identification Works

❑ Target market identification broadly involves identifying
why a customer would want to buy from you, breaking
down the overall market into different market segments
based on shared characteristics, and then choosing the
most feasible, profitable market segment or segments
as the target market for your marketing mix.
❑ Besides targeted marketing, other strategies includes mass
marketing (aimed at a wide range of buyers) and product-variety
marketing, when a firm deliberately sets out to offer a wide range
of products to broaden the customer base. But businesses are
slowly transitioning from away from mass marketing to target
marketing as the latter often makes for a more effective
marketing mix.
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Benefits of Target Market Identification

❑ The advantages of identifying a target market include:
1. More Effective marketing mix.
▪ If you know who your customers are, you can tailor the product,
price, and distribution channels to better meet their needs and
desires.
2. Helps you choose the right marketing channels.
▪ With a target market in mind, you can promote your products or
services to customers where they are, be it by posting on a given
social media platform or placing ads in a part of town where
people in the target market regularly frequent.
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Benefits of Target Market Identification

❑ The advantages of identifying a target market include:
3. Uses limited time, money, and resources more efficiently.
▪ Promoting to a narrower target market as opposed to the overall
market allows you to allocate your hours and money more
efficiently on the people who are most likely to need or want to
buy from you.
4. Maximizes sales and profits.
▪ All of the above factors can boost the appeal and reach of
marketing mix, which can boost the volume of sales and improve
your bottom line.
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How to Carry Out Target Market Identification

❑ Follow these steps for the identification of the target
market:
1. Assess product or services characteristics.
▪ Make list of the features as well as the benefits that come with
your product or service.
2. Identify why customers would buy from you.
▪ From the features and benefits you listed, identify the key selling
point that gives customers a reasons to buy your product or
service.
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3. Identify the most relevant dimensions of segmentation.
▪ Figure out the dimensions along which you want to break down or
segment the larger overall market into a smaller target market.
To do so, make a list of the major segmentation bases and decide
which are relevant to the majority of the potential customers.
▪ Major segmentation bases include geographic (customers are
targeted locally, regionally or nationally), demographic
(customers are targeted by their age, gender, income, and
education level are example), psychographic (identification based
on attitudes, beliefs, emotions, lifestyle, and hobbies) and
behavioral (identification based on various patterns such as
purchasing occasion and loyalty status.
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4. Segment the market according to specific criteria.
▪ Identify one or more specific segments that will define the target
market.
5. Choose the most profitable segments to include in the
target market.
▪ Evaluate how worthwhile it would be to pursue each identifies
market segment by evaluating your firm’s financial resources and
the profitability of each segment, which segments your
competitors serve, and how established you are in the market. If
you can’t afford to promote to all the identified segments (or it
wouldn’t be lucrative to do so), there’s too much competition for
a given segment, or you’re trying to break into a new market, you
may want your target market to focus on one segment.
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❑ Target market identification is the process of selecting

the groups of customers to focus on in a firm's
marketing mix
❑ It involves finding out why customers would buy form
you, dividing the market into segments according to
demographics and other characteristics, and then
finding the most profitable segments to include in your
target market.
❑ It affords a more effective marketing mix that
maximizes your reach and profits.

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PhilCST

PHILIPPINE COLLEGE OF SCIENCE & TECHNOLOGY

Understanding Target Markets

How Target Market Identification Works

How Target Market Identification Works

Benefits of Target Market Identification

Benefits of Target Market Identification

How to Carry Out Target Market Identification

How to Carry Out Target Market Identification

How to Carry Out Target Market Identification

❑ Target market identification is the process of selecting

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