Target markets Unit 1 Business skills for ecommerce

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

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

LO 3: 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, Pay. Pal, No. Chex, 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 - 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 • 238 m smartphones sold in 2013 • Total phones (smart and feature) were 432 m • 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 • Samsung 35% market share, Micromax 15%, Karbonn 10%, LAVA 6% and Nokia % • User status • • First time – 200 m 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 10 M sales

Exercise • Develop a target market for • 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