Target markets Unit 1 Business skills for e-commerce HND in Computing and Systems Development

Timeline Week Activity 1 Introduction & Businesses 10 Assignment 2 LO2 LO1 Stakeholders 11 LO3 Key processes 3 LO1 Functions 12 LO3 e-commerce 4 13 LO3 Security - 1 5 LO2 Impacts 14 LO3 Security - 2 6 Assignment 1 LO1 15 LO3 Legislation 7 LO3Target markets 16 Assignment 3 LO3 issued 8 LO3 Objectives 17 Assignment work 9 LO3 Market research 18

LO3: Be able to design e-Commerce solutions Objectives: business idea eg unique selling proposition, business-to-business opportunities, business to consumer markets; domain name Market research: purpose of research eg identifying information sources, online and offline competition; types of research eg primary, secondary Target markets: market analysis eg size, characteristics, dynamics, competitors, historical background, emerging trends, market share, market segmentation Key processes: technology requirements eg hardware, software, security, maintenance, back end systems; supply sources; distribution channels e-Commerce: payment systems eg electronic cheque, PayPal, NoChex, credit or debit cards; start-up capital; working capital; funding sources Security: key areas eg prevention of hacking, viruses, identity theft, firewall, impact on site performance, Secure Sockets Layer (SSL), Secure HTTP (HTTPS), digital certificates, strong passwords, alternative authentication methods Legislation: relevant legislation eg Data Protection Act 1998, Computer Misuse Act 1990, Consumer Credit Act 1974, Trading Standards, Freedom of Information Act 2000, copyright legislation

Target markets Learning outcome market analysis eg size, characteristics, dynamics, competitors, historical background, emerging trends, market share, market segmentation

What is the market? The group of consumers or organisations that are: Interested in the product Have the resources to buy the product Permitted (by law or regulation) to buy the product A market starts with the total population and then narrows down http://www.netmba.com/marketing/market/definition/ Accessed 14/10/2014

Potential market Potential market Those interested in purchasing the product Available market Those who can afford the product Qualified available market Those who can legally buy the product Target market The portion of the qualified available market you are going to sell to Penetrated market Those who have bought the product http://www.netmba.com/marketing/market/definition/ Accessed 14/10/2014

Market size Qualified available market size is not fixed It can change due to: Legislation Regulation Price Competition http://www.netmba.com/marketing/market/definition/ Accessed 14/10/2014

Market segmentation Mass marketing treats all customers the same Target marketing identifies different customers and their needs Market segmentation identifies these needs http://www.netmba.com/marketing/market/definition/ Accessed 14/10/2014

Market segmentation A market segment must be: Identifiable – attributes must be measurable Accessible – must be able to reach it Substantial – sufficiently large to make it worthwhile Unique – to justify the offering Durable – not requiring frequent change http://www.netmba.com/marketing/market/definition/ Accessed 14/10/2014

Market segmentation How do we segment? Geographic Demographic Psychographic Behavioural http://www.netmba.com/marketing/market/definition/ Accessed 14/10/2014

Geographic segmentation Region Country County Town Size of area – city population Population density Urban Suburban Rural Climate http://www.netmba.com/marketing/market/definition/ Accessed 14/10/2014

Demographic segmentation Age Gender Family size Family lifecycle Single Full nest Empty nest Double income, no kids Solitary survivor Generation Baby boomer, Gen X, Millenials Income Education Occupation Ethnicity Nationality Religion Social class http://www.netmba.com/marketing/market/definition/ Accessed 14/10/2014

Psychographic segmentation Activities Interests Opinions Attitudes Values http://www.netmba.com/marketing/market/definition/ Accessed 14/10/2014

Behavioural segmentation Actual customer behaviour towards products Benefits sought Usage rate Brand loyalty User status First time Regular Readiness to buy Occasions – Christmas, weddings, holidays http://www.netmba.com/marketing/market/definition/ Accessed 14/10/2014

Example – smartphone market Geographic 238m smartphones sold in 2013 Total phones (smart and feature) were 432m 80% of overall phone sales in China are smartphones 200 million feature phones sold in India Where is the best opportunity?

Demographic Who would want a smartphone in India? Population 1.26 billion Is there any segmentation here? 30% below 15 years old

Psychographic Uses of a smartphone in India On an average, Indian consumers spend over 3 hours a day on their smartphones 25% consumers check their phones over 100 times a day Around one-third of the time spent on smartphones is for using apps Social and chat apps are the reason why most new users buy a smartphone. 40% mature smartphone users say their usage is no longer limited to social purposes Mobile video usage is evolving, with mobile broadband users spending 61% more time on video apps compared to non-users Cricket is the most popular sport in India http://yourstory.com/2014/07/indians-spend-3-hours-daily-on-smartphones/

Behavioural Usage rate – 3 hours per day Brand loyalty User status Samsung 35% market share, Micromax 15%, Karbonn 10%, LAVA 6% and Nokia %  User status First time – 200m potential Regular Readiness to buy Below $200 US accounts for 80% of total sales A $35 smartphone sold out in a day (Android Open Source Project AOSP ) Occasions – Dewali - Autumn

Conclusion Get a cheap AOSP from China Sell in India at $50 US Advertise at Dewali Bundle with free video streaming of India v West Indies cricket Aim for 10M sales

Exercise Develop a target market for Present your results Disposable gloves/aprons to care homes in Herefordshire Rural broadband in Herefordshire Pop up fast food in Hereford Mobile sharpening service for chain saws and gardening equipment in Herefordshire Present your results

Activity Determine the target market for wooden mobile phone cases in the UK