A ‘market’ is a place where an enterprise sells its products or services. There are different markets in which we can operate.
Understanding your market is the first step in effectively targeting your customers and being successful. Once this is done, we can identify our target audience within that market.
In this lesson, we’ll learn about:
We need to choose the market we operate in.
Are we going to sell our products to other businesses or straight to the consumer? Are we going to sell our product to the majority of customers out there or a specific type of customer?
Of course, the answer to this might not be clear-cut. We might want to sell to other businesses and directly to consumers.
Either way, though, whichever markets you choose will affect how you sell and market your products.
Markets we might choose to operate in can include:
A Business-to-Business (B2B) market is where one business sells its goods and services to another business.
An example of this might be an automobile manufacturer that will purchase parts, such as tyres & batteries, from another independent company to build the cars they sell.
Another example would be where supermarkets will get most of their grocery supplies from wholesalers.
A Business-to-Consumer market is where a business sells directly to the end consumers.
An example of this might be a fast-food chain like McDonald’s selling burgers directly to customers.
Another example would be Nike selling their trainers directly to consumers via their website as well as physical Nike stores.
Neither of these markets is better than the other, and many businesses will operate in both. However, there are differences between how we market & sell to these markets.
B2B sales tend to be more process-driven and so will often involve more steps involved with completing a sale.
Additionally, B2B sales tend to be more valuable than B2C sales.
With B2B sales, repeat business is usually much higher than with B2C.
A niche market is a section (or segment) of a larger market with unique needs, preferences, or identity that distinguishes it from the larger market.
For example, the tea market has many different niches, such as herbal tea and decaffeinated tea.
Another example is within the smartphone market, where we can see niches like budget phones & gaming phones.
Mass market refers to a large, undifferentiated market of consumers, even though they might have widely varied backgrounds.
This includes all those products and services needed by almost every member of society. For example, paper towels, toilet paper, petrol and electricity & gas utilities.
The obvious benefit of operating within a mass market is that you can sell to a huge number of customers. This can potentially mean much higher turnover and profit.
However, mass markets are typically extremely competitive, while niche markets will have less competition, and so give you greater scope to establish yourself in the market.
Your ‘target market’ can be defined as the market an enterprise wants to sell its products to.
We’ve looked at types of markets like B2B and B2C. However, a target market is usually more focused on a specific set of people.
The target market is really a group of consumers whom a product or service is specifically aimed at. For example, a children’s toy will have ‘children of a certain age’ as its target market.
So, a targeted market is people or businesses:
Identifying your target market is very important to all businesses.
It helps the company to:
Identifying your target market requires an understanding of ‘market segmentation’. We’ll learn more about this in the next lesson.
A ‘market’ can be defined as a place where an enterprise sells its products or services.
A B2B market is where one business sells its goods and services to another business.
A B2C market is where a business sells directly to the end consumers.
A niche market is a section of a larger market with unique needs, preferences, or identity that distinguishes it from the larger market.
A Mass market is a large, undifferentiated market of consumers, even though they might have widely varied backgrounds.
Your ‘target market’ can be defined as the market an enterprise wants to sell its products to.
