Analyzing the market
Before you unleash your product into the outside world, it is best to first assess the characteristics of your potential market or markets. Here are some tips on what to look out for when it comes to your intended markets.
Social classes and life cycles
Between income and social class, social class is a better indicator of potential buying behavior. Just because a person earns a substantial income does not mean that he or she will automatically buy expensive items. This is because the person’s social class is a greater determinant of what he or she would actually buy.
By the same token, just because a person is not earning much does not mean that he or she will not buy an expensive item. If for some reason the person feels that he or she belongs to a higher social class (or, perhaps, if he or she used to belong here but simply fell into hard times), then this person would still have a greater chance of buying expensive items as compared to a high-earning individual who has no feelings of belonging to the upper classes.
In short, income is not as reliable an indicator of buying potential as is social class.
The pattern can also be seen with age. With people now marrying later in life and teenagers becoming increasingly sophisticated early on, chronological age is now becoming less reliable as a measure of what a person would buy as compared to simply identifying the person’s life cycle stage – namely whether the person is a child, a “’tween,” a teen, a professional, young and married, in mid-life, or a senior citizen.
The bottom line is that you will have to identify what kinds of information about your market would be most useful for making your market assessments.
You will have to know the possible buying behaviors of your intended market. Are they brand loyalists or are they impulse buyers? Are they regular buyers or occasional buyers? Are they volume purchasers or do they buy in small packs only? How frequently do they buy? And where do they normally buy?
Pepsi in the United States did a study and discovered that their consumers tended to buy as much soft drinks as they could carry when they are in the supermarket. In other words, the only limit to their purchase quantity was how well the amount of soft drinks could be carried conveniently. Therefore, Pepsi decided to come up with larger but easy-to-carry bottles, as well as ways to make it easier for consumers to carry large numbers of Pepsi products.
Level of involvement
Are the consumers interested in learning as much as they can about your product, or do they tend to avoid any complexities in their purchase process?
Some people, for instance, are passionate about personal computers and would eagerly learn as much as they can about the latest developments in the computer industry, taking time out to study specifications and other aspects of computers. But more people are averse to such detailed analyses, and would in fact prefer to just buy a computer based on how it looks.
For low-cost items, consumers can end up with an impulsive buying pattern, as is often seen in cheap consumer items such as candies, junk food and tabloid papers. This is because these items are relatively cheap anyway, so the consumers do not feel as if purchasing an unknown brand will be too big a risk.
Putting it together
Now that you have assessed the peculiarities of your potential markets, the challenge now is to take advantage of your observations in order to adjust your product’s marketing mix. Should you price high or low? Must you sell in volume or offer your items in small packages? What life cycle stage and what social class is more prone to be interested in your offerings?
Knowing the characteristics of the market goes a long way into fine tuning your product idea. And it helps you in finding the market segment that best fits the nature of your product or service.