1.

1 IDENTIFYING THE
MARKET PROBLEM TO BE
SOLVED OR THE MARKET
NEED TO BE MET
GROUP 3
What is a target market?
• The target market is the individuals
or companies that are interested in
a particular product or service and
are willing and able to pay for it.
• The marketing concept uses the needs
of customers as the primary focus
during the planning, production,
distribution, and promotion of a
product or service.
Demographics and
Psychographics
• Demographics are data that describe a
group of people in terms of their age,
marital status, family size, ethnicity,
gender, profession, education, and
income.
• Psychographics are data that describe a
group of people in terms of their
tastes, opinions, personality traits,
and lifestyle habits.
Identify your target market
1. Who are my customers: individuals or
companies?
2. If customers are individuals:
• How old are they?
• How much money do they earn?
• Where do they live?
• How do they spend their time and money?
3. If customers are companies:
• What industries are they in?
• Where are those industries located?
Identify your target market
4. What needs or wants will my product or
service satisfy?
5. How many potential customers live in
the area in which I want to operate?
6. Where do these potential customers
currently buy the products or services I
want to sell them?
7. What price are they willing to pay for
my products or services?
8. What can I do for my customers that
Why is it important to determine
who your target market is?

• Unless you understand who your target

market is and what types of products or
services they are looking for, you will
probably not be able to satisfy their
wants and needs.
Understand your customer
Customers are the people who buy the
products and services companies
offer. They buy goods and services to
satisfy economic wants and needs.
• An economic want is an unfilled
desire of a customer
• An economic need is anything that is
required to live
Understand your customer
A customer profile is a description
of the characteristics of the person
or company
• It will help you understand how to
meet customer demand. Understanding
your competition will help you
identify unmet needs
MARKET RESEARCH
• Market research is a system for
collecting, recording, and analyzing
information about customers, competitors,
goods, and services
• Market researchers collect primary and
secondary data
• If conducted properly, market research
will help entrepreneurs understand their
target markets and thus, satisfy the
wants and needs of the customers
MARKET RESEARCH
Secondary Data
• data found in already published sources
• information you can find using secondary
sources include information on Demographics,
Economic trends, Industry forecasts
examples:
• Books about specific industries
• Information on web sites for government and businesses
• Books about other entrepreneurs who set up similar
businesses
• Specialized magazines and journals devoted to
particular fields
• Newspaper articles and statistics
MARKET RESEARCH
Primary Data
• information collected for the very first
time to fit a specific purpose
examples:
• Questionnaire or Survey
• Observation
• Focus groups

disadvantages:
• Time consuming
• Expensive
FIVE STEPS OF
PRIMARY MARKET RESEARCH
1. Define Question
know what you want and find out
2. Select Method
survey, observation or focus groups
3. Collect Data
gather needed information
4. Analyze Data
5. Draw Conclusions
a plan of action
 SEEKING
• Entrepreneurs are innovative opportunity
seekers that have an insatiable curiosity to
discover new or different ideas that will work
in the marketplace. This curious streak is what
separates them from the ordinary businessman
whose obsession is, simply, to make a profit
from producing, buying and selling goods. A lot
of wannabe businessmen set up shop to repeat
what everybody else is doing but this is not
really entrepreneurship. It is just doing
“business as usual.”
 SCREENING
• You have looked at your surrounding
environment. You have considered the
trends in the market place. You have an
idea of what products or services people
are looking for. You have familiarized
yourself with current and future advances
in technology. At this point, you should
already have a list of possible
opportunities and business proposals that
you can take on as an entrepreneur.
 SEIZING
• The next step for the entrepreneur is to seize
the chosen business opportunity. At one end,
there are critical factors that enable the
entrepreneur to exploit the opportunity to the
heights of success. On the other end, there are
critical factors that would drag down the
opportunity to failure. Therefore, the
entrepreneur must determine exactly what
critical factors cause business opportunities
to succeed and what critical factors cause it
to fail.
 TECHNIQUES
ON SEEKING, SCREENING AND SEIZING OPPORTUNITIES
 Market Need Analysis
• A market analysis is a quantitative and
qualitative assessment of a market. It
looks into the size of the market both in
volume and in value, the various customer
segments and buying patterns, the
competition, and the economic environment
in terms of barriers to entry and
regulation.
 Market Need Analysis
The objectives of the market analysis
section of a business plan are to show to
investors that:

 You know your market

 The market is large enough to
build a sustainable business
 Market Need Analysis

Demographics and Segmentation

Target Market
Market Need
Competition
 Market Need Analysis
1. Demographics and Segmentation
• assessing the size of the market, your
approach will depend on the type of
business you are selling to investors

2. Target Market
• the type of customers you target within
the market
 Market Need Analysis
3. Market Need
• you need to get into the details of the
drivers of demand for your product or
services.

4. Competition
• give a fair view of who you are
competing against. You need to explain
your competitors' positioning and
describe their strengths and weaknesses
 Product: It’s Nature And
Sustainability
• a product is the item offered for sale.
It can be a service or an item and it can
be physical, in virtual or in cyber form.
• the price that can be charged depends on
the market, the quality, the marketing
and the segment that is targeted
• to succeed as an entrepreneur, you must
develop the ability to select and offer
the right products or services to your
customers in a competitive market
Viability, Profitability And
Customer Requirements