(1) Select the market scope. Enterprises should clearly define their market scope in a certain industry and use it as the basis for formulating market development strategies. For industrial and trade-integrated enterprises, their advantageous products define this market scope. For trading enterprises, the market scope can be determined based on the company’s experience in a certain industry (category).
(2) Understand and analyze the needs of potential customers. You can list the variables that affect market demand and customer purchasing behavior from the aspects of geography, population, psychology, etc. Then conduct a sample survey of different potential customers and evaluate the listed demand variables to understand the common needs of customers.
(3) Divide the market segments and name the market segments. Divide the market segments based on the common needs of customers. The market segments must be defined to the point where they can be seen, touched, and felt, so as to form a clear customer portrait. Naming the market segments is to make the market segments more concrete for easy identification.
(4) Screening. Abandon those market segments that do not match the company’s positioning and preliminarily determine the market segment to enter, namely the target market.
(5) Analyze the target market. Analyze the scale, competition, consumer response, etc., and finally determine the target market. If the conclusion drawn in this step is not ideal, the above steps should be repeated until the three principles of target market selection are met.
For example, Chapter 1 mentioned: Company A uses the Alibaba International Station official flagship store to assist other online marketing models to provide high-end business people with golf training simulator kits that can be used in the office and are priced no more than the cost of using a golf course twice.
Among them, the market scope selected by Company A is: golf sports products, so the first-level category (first-level market segment) selects Sports & Entertainment, the second-level category selects Golf (second-level market segment), and the product is a golf training simulator, so the third-level category (third-level market segment) selects Golf Training Aids. In this level of market segmentation, it can also be divided into training simulator equipment for golf training grounds and portable training simulator equipment. Company A’s products are positioned as portable training simulators, which are different from large equipment for training grounds. Portable simulators can be divided into home and office use, and there will be significant differences in pricing. Equipment for office use will be much higher than equipment for home use. However, in the portable golf training simulator for office use, which is priced higher, Company A limits the product price to no more than twice the golf course usage fee, that is, the price is mid-to-high-end. Meeting the needs of high-end business people (note: not bosses) to practice golf in the office is a market segment of Company A. Obviously, Company A gave up the high-end positioning and the low-end positioning for home use, and chose to participate in the mid-to-high-end market competition with cost-effectiveness. In addition, the main marketing scenario is Alibaba International Station. If the region is further subdivided into central cities in Western Europe, then its target market positioning is already quite accurate. This lays a very good foundation for marketing.