Marketing & Finance

Year 2 – Unit I 2. Understanding Target Markets

As a Technical Collaborator of

for B. Sc. Degree in Catering Science & Hospitality Management

Session Objective
By the end of the session you will be able to:
• Understand the term target market and target customers • Describe the process for market designing • Discuss Porter’ Model • Know how to target the market • Describe the customer’s needs

As a Technical Collaborator of

for B. Sc. Degree in Catering Science & Hospitality Management

Topics Covered
Target market and target customers Design-for-Market Process Market Attractiveness
• Porter’s “Five Forces” Model

Selecting Target Customers Identifying Customer Needs

As a Technical Collaborator of

for B. Sc. Degree in Catering Science & Hospitality Management

Designing for the Market
Your target market Your target customers within that market How to create/present a better “Value minus price” proposition than competitors
• requires understanding/quantifying “value” in the target customers’ eye • requires understanding what competitors’ offerings will/may be

As a Technical Collaborator of

for B. Sc. Degree in Catering Science & Hospitality Management

Design for Market Process
Select target market (customer need, product category, industry)
• • • • Product concept Select target customers (C) Value assessment, versus competition Product-price definition (2 P’s)

As a Technical Collaborator of

for B. Sc. Degree in Catering Science & Hospitality Management

Porter’s Five Forces Model

As a Technical Collaborator of

for B. Sc. Degree in Catering Science & Hospitality Management

Market Attractiveness Porter’s “Five Forces” Model
Threat of substitutes Ease of entry Buyer power Supplier power Degree of rivalry

As a Technical Collaborator of

for B. Sc. Degree in Catering Science & Hospitality Management

What’s a Target Market

As a Technical Collaborator of

for B. Sc. Degree in Catering Science & Hospitality Management

Selecting Target Customers
Customers with (greatest) unmet needs Customers you have a relationship with Customers who want what you can deliver best (thru your competitive advantage) Customers who “Find” you

As a Technical Collaborator of

for B. Sc. Degree in Catering Science & Hospitality Management

Target Customers

As a Technical Collaborator of

for B. Sc. Degree in Catering Science & Hospitality Management

Target customers may be described by
Customer (individual or group names) Industry or occupation Demographics (revenues/income, size of firm/size of family, location, ) Psychographics (cost-conscious, prestige oriented) Needs throughout the buying/using experience (remember the whole product)

As a Technical Collaborator of

for B. Sc. Degree in Catering Science & Hospitality Management

Identifying Customer Needs
Primary customer research: doing surveys, interviews, focus groups on “needs” Secondary customer research: reading industry/market studies by analysts Benefit studies: cost savings, value-in-use, customers’ purchase/use/disposal process Revealed preference: what they pay for (partial) equivalents Extrapolation from technical possibilities
As a Technical Collaborator of for B. Sc. Degree in Catering Science & Hospitality Management

Recap Objectives
Now you are able to:
• Understand the term target market and target customers • Describe the process for market designing • Discuss Porter’ Model • Know how to target the market • Describe the customer’s needs

As a Technical Collaborator of

for B. Sc. Degree in Catering Science & Hospitality Management