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

2. 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

3. 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

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

5. 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 Accessed 14/10/2014

6. 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
Accessed 14/10/2014

7. Market size Qualified available market size is not fixed
It can change due to:
Legislation
Regulation
Price
Competition Accessed 14/10/2014

8. Market segmentation Mass marketing treats all customers the same
Target marketing identifies different customers and their needs
Market segmentation identifies these needs Accessed 14/10/2014

9. 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 Accessed 14/10/2014

10. Market segmentation How do we segment? Geographic Demographic
Psychographic
Behavioural
Accessed 14/10/2014

11. Geographic segmentation
Region
Country
County
Town
Size of area – city population
Population density
Urban
Suburban
Rural
Climate
Accessed 14/10/2014

12. 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
Accessed 14/10/2014

13. Psychographic segmentation
Activities
Interests
Opinions
Attitudes
Values
Accessed 14/10/2014

14. 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
Accessed 14/10/2014

15. 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?

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

17. 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

18. 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

19. 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

20. 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

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