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Week 3 - The Market

The document discusses defining markets and key considerations for doing so. It notes that a market consists of actual and potential customers for a product or service, and is defined by a group of people with needs that can be met by particular product categories. When defining a market, it is important to focus on customer needs rather than just current products, and to consider both existing and potential solutions. The document also discusses related concepts like market size, target markets, demand, and estimating property demand.

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NURAIN HANIS BINTI ARIFF
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44 views24 pages

Week 3 - The Market

The document discusses defining markets and key considerations for doing so. It notes that a market consists of actual and potential customers for a product or service, and is defined by a group of people with needs that can be met by particular product categories. When defining a market, it is important to focus on customer needs rather than just current products, and to consider both existing and potential solutions. The document also discusses related concepts like market size, target markets, demand, and estimating property demand.

Uploaded by

NURAIN HANIS BINTI ARIFF
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Dr.

Hilmi Masri
 It is important to be careful about how a
market is defined. The following key
marketing processes rely on a relevant
market definition:
 - Measuring market share
- Measuring market size and growth
- Specifying target customers
- Identifying relevant competitors
- Formulating a marketing strategy
• Market is the set of all actual and potential
buyers of a product or service (Kotler, et al,
2009).

• A group of people or organizations with


wants and needs that can be satisfied by
particular product categories.
 This definition suggests that a market is the
total value and/or volume of products that
satisfy the same customer need.
 For example, if the customer need is “eat
breakfast”, then the relevant market
could be defined as the “Breakfast Food
Market”. Many products would be
relevant to measuring and analysing such
a market:
 - Breakfast Cereals
- Nutrition Bars
- Porridge / Oats
- Speciality Breads (e.g. croissants)
- Fast-food Outlets serving breakfast
 In defining a market, it is important not to
focus only on products/services that
currently meet the customer need.

 Thinking about customer needs first – and


then identifying the products that meet
those needs – is the best way to define a
market.
Qualified customers are defined as those who:
• Seek a solution to a need, and
• Are eligible to make a purchase, and
• Possess the financial ability to make the
purchase, and
• Have the authority to make the decision.
• In some markets, the customer may has a
surrogate who will handle some of these
qualifications for a targeted customer.
• For instance, a market may consist of pre-
teen customers who have a need for certain
clothing items but the actual purchase may
rest with the pre-teens’ parents. So the
parents could possibly assume one or more
surrogate roles (e.g., financial ability,
authority) that will result in the pre-teen
being a qualified customer.
• To an organization a market can only exist
if the solutions sought by customers are
ones that the company can satisfy with
their offerings.
• If a company identifies a group of customers
who are qualified to make purchases they
only become a market for the company
once the company is in a position to
execute marketing activities designed to
service those customers.
 Potential market- those in total population
interest in acquiring product
 Available market – those in potential market
have enough money to buy the product
 Qualified available market – those in
available market who legally permitted to
buy the product.
 Target market- those in qualified available
market that the firm decided to serve.
 Penetrated market- those in target market
who have purchased the product.
 Market share can be defined as the
percentage of all sales within a market that
is held by one brand / product or company. 
Market share can be measured in several
ways.  However, the two most important
measures are by:
- Sales revenue
- Sales volume (the number of units sold)
Source: Ben Evans, Mobile is eating the world
 An economic principle that describes a
consumer's desire and willingness to pay a
price for a specific good or service.
 Think of demand as your willingness to go
out and buy a certain product. For example,
market demand is the total of what
everybody in the market wants.
 Market potential
 Sales forecast
 Competitors’ price
 New household formation
 Age structure
 Household income
 Credit facilities
 Price of substitute units
 Ownership cost
 Expectation
 Economic factors
 Market conditions
 More complex than estimating supply, why?
Nobody knows how much demand able to be
generated, buyer’s respond, competition.
 Common method of estimating property
demand is economic base analysis.
 This method is based on economic and
market characteristics that influence people
choice.
Estimating methods Use Variables involved
Inferential analysis To make a global Population, employment, income,
demand analysis, number of household, house price,
demand for the change in no. of household,
whole region demolition of housing, actual
vacancies, actual housing under
construction.
Market-survey based To estimate demand Size of local population, net
analysis for a particular migration, direct generation, spill-
place over, demand from alien buyers,
employment, age structure,
income level, property price

Model-based estimation Sales success of Physical, location, economy and


other competing market variables such as land size,
project is likely a floor size, type of property, age of
demand for the building, building condition,

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