Selecting a Target Market



Introduction

When a company introduce a product their 1st task is to select a target market. While selecting a target market various factors should consider as demographic factors, geographic factors, consumer behavior factors, technological factors and so on. A company should evaluate each of the factors and then find out problem with them. After finding possible solution for each problem then they should enter the market and set up their distribution tools. While selecting distribution tool they should consider that what type of country they are entering such as they may be enter in a developing or developed country. They should set up different strategy for different country as they should set bricks strategy for a developing country and clicks strategy for developed one.
Peppersmith a mint and gum producing company wants to enter the market of Germany with the product named Tingz a child food. So they should focus on their business plan on the age of the customer, which part of the Germany they wants to serve and what kind of distribution tool they should apply. They should also consider the income level of the target customer, their buying pattern, and their life style and so on before entering the market.

 

Task 1: A Market Selection:


Problems of data collection
While making a decision an author needs to collect several types of data. These data may be collected from a primary source or to a secondary one. When authors collect their data from primary sources they face the problem of accuracy of the collected data because most of the time the data are collected by a questionnaire method and the representatives are not always well known about the asked question. If authors collect their data from a secondary source then they are face the problem of availability of accurate information.


Discusses and justifies the choice of criteria
There are different types of market screening criteria used by the companies such as geographical criteria, psychological criteria, consumer behavioral criteria, product uses criteria, economic factors, technological factors, socio-cultural factors and so on. From these market screening criteria Peppersmith should use the geographic criteria, socio-cultural factors, economic factors, technological factors, and consumer behavioral criteria for the countries like Japan, Norway, Germany, and Denmark.

Geographical screening criteria
Geographical screening is segmentation of a countries market on the basis of its geographical division as like urban, sub urban, rural and so on. Geographical segmentation is occur when a company sets it marketing strategy on a selected part of a country such as if Peppersmith sets their marketing strategy in Burly then it will be geographic screening for them. Geographical screening is depends on the differentiation on the test of a several product on the several part of a country. Peppersmith produce Tingz which is a sugar free sweet for the children. If they wants to capture the market of Germany they should establish three different strategy for urban, sub urban and rural people. Rural people generally unconscious about the health of their children and Tingz might not be accepted to them as the urban and sub urban people. Because they are very much conscious about the health of their children. So Peppersmith can establish different promotional activities to capture both urban and rural people. They should set up their marketing strategy on the basis of consumption pattern of the behavior, ability to buy and consume, mass media exposure and awareness level.

Demographical screening criteria
Demographical screening is to segment a countries or a regions market on the basis of race, religion, age, income, gender and education. As it is more crucial to select a country on the basis of its demographical situation peppersmith should take several steps to make easy the procedure of selecting it’s demographically selection of criteria and make its customer more beneficial. Customer needs and wants are differ on the basis of their age such as people of teen age likes colorful products but mature people likes formal things. Children are always prefer foods like fast-food whereas the matured likes foods contains enough vitamins. Peppersmith produce Tingz for the children which is hygienic as well as preferred by the most of the children.  The children of all countries is not same so Peppersmith should set up different strategy to enter different country’s market as if they wants to the market of Germany they should know the food habit of the children of Germany. While entering a country’s market multinational companies should concentrate on the income level of the individual customer. If a company sets same price for Norway and Germany then it will not able to its desired profit from this country. As a multinational company Peppersmith also should concentrate on their customer’s income level and age of the customer as well as gender, race and religion.



Economic factors screening
Economic factors regarding a country’s economic facts which influence its trades and business. Economics factors can be taxation, fiscal and monetary policy, inflation rate, interest rate, and exchange rate. While entering a country a company must consider this factors because their success will depends upon proper utilization of this factors. As Peppersmith an international company and its wants to enter new countries like Japan, Denmark, Germany, and Norway it should enter into the product which is able to purchase of those country. Germany, and Germany is 1st world country so product cost is not the fact for them rather they will justify just the product quality. On the other hand Norway is comparatively lower income country than Germany and Germany so Peppersmith should produce low budget Tingz to capture the market of Norway.
Another factor which should consider before entering a new country’s market is how much tax the company should pay for running business on this country. If the tax is higher than the profit then a company never will run their business on this country.


Socio Cultural factors screening
Socio cultural factors are the facts and activities by which a countries social cultural build up. As a multinational company, while entering a new country Peppersmith should know that countries socio cultural situation as what kind of promotional tools should be avoid, what kind of product will receive by most of the people. If a company wants to enter the market of Iran with the product red wine then they will prohibit because Iran’s culture doesn’t support drinking red wine.  As Peppersmith wants to enter international market with product Tingz so it will face a little cultural problem because almost all of the country there have no obstacles in children food without quality of the product.



Consumer behavior screening:
 As Peppersmith wants to enter into the market of Germany with the children food Tingz at 1st they should know what kinds of food buy the parents of these countries for their children? Before buying any children food parents justify the quality of the product and then price. So Peppersmith should consider both of the price and quality.
Another factor for children food is how consciousness of the parents about their children. People of lower income are very much conscious about their children health at the comparison with people of 1st world countries.




Technological factors screening:
Before entering a market a company should know how technologically advanced the country is. Because proper use of technology refers how much develop a country is. A company establish several business plan for several countries. They may establish one plan for a developing country but their strategy for developed country can be changed. If a country is technologically advanced then the company can set clicks strategy and if not then they can apply bricks as a distribution tools. Peppersmith wants to enter into the market of Germany so they should know technical advancement of Germany to set up their several plans and strategy.


Target Market Selection
Once a company determine and produce its product then it should select its target market. A target market refers to select the actual customer group or audience, in which a company will try to sell its products and services. It is difficult to capture all of the customer in a target market so companies are try to maximum of them. Peppersmith wants to deal their business in different countries and their target product is Tingz a kind of children product so their target customer is children and they target Germany, Germany, Norway, and Denmark as their target market.
There are six steps before entering a target market:
Step 1
Determine the feature of the companies’ product is the 1st step to enter a target market. Before entering a new market peppersmith should know by what product and what feature they going to attract their target audience and what kind of benefit will get the customer from this product. Peppersmith entering with Tingz so they should know how it can help children health.

Step 2
Concentrate the types of the customer who will buy the product. Customer can be different types by their age, gender, income level, marital status and so on. It should identify which customer needs company’s product. Tingz is a children product customer of the Tingz can categorized through the age.

Step 3
The 3rd step is to finding personal characteristic of the potential customer, consumer buying behavior and life style of the customer. Illiterate people have no conscious about their child health so Tingz mostly targeted on literate people in targeted area.

Step 4
The next step is to find out the company’s competitor and what kinds of service are given by them. Analyzes the factors which can make a differentiation among the company and its competitors. McDonald may be a competitor of Peppersmith.

Step 5
If the company is operating then it’s time to take a look on their current customer base as what quantity they purchase, why they do not purchase other brands product, why they are interested to by Tingz and so on.

Step 6
Now it’s time to compile all of the Peppersmith research findings and by this find which types of customers have the most need for the Tingz. Now time to balance Peppersmiths target market so that it cannot be too large or too small



Task 2: Market entry and distribution strategy:
After entering a market, a company then should select by which method they will sell their product customer that means what distribution strategy they will follow to serve their customer. There are two popular strategy to serve the customer. They are bricks and clicks.
Bricks model means offline distribution strategy. Customers can directly purchase a product from any identified distributor of the company. They can touch, and see the product before they buy it. For bricks distribution strategy a company set up several outlets in its target area. It can be a super shop or distributor of only one company’s product. If Peppersmith select the market of Norway to sell their Tingz then they should establish outlets to serve their customer. They also can sell their product through different types of super shop, pharmacies, and their own established shop .As bricks is one kind of physical sells and it is more fruitful in developing or poor countries because most of the people of these countries have no enough knowledge to purchase a product from online market so Tingz market should be select the country like Norway. They can select some of the Norway’s super shop like 7-eleven, Bunnpris, Centra, coop market and so on.
Clicks model refers to online distribution strategy. Customer can purchase product through the ordering on the website of the company or through a phone call and the companies home deliver employees will reach the product to the door of the customer. In clicks distribution strategy a buyer never cannot touch the actual product. They just see the photos and feature of the product. So clicks market needs highly reliability and only educated or experienced persons can done this. It also needs highly technical and communication development to establish the relationships between the buyer and seller. So the develop countries are the major market of clicks distribution. Peppersmith should target the market of Germany to sell their child product Tignz. Because the people of Germany are highly educative and they are highly involvement with the advanced technology. They are hard worker and sometime they have not enough time to buy daily products so they are highly dependent on online marketing. Peppersmith can select some well-known departmental store of Germany like Mitsukoshi, ukiyo-e and so on to sell their product Tingz.


Selection of distribution strategy
In one word bricks strategy means offline based distribution of goods and services and clicks strategy means online based distribution system. A company can use both of two strategy or use one of them. It depend upon which country they selected as their target market. If they select a developing or under develop country then they must select bricks strategy. Because click strategy requires technological development of the country, education and income level of the country, people involvement with modern technology and so on but bricks is an easy way of distribution. Anyone can buy a product from a super shop. It is also lower cost in comparison with clicks strategy.
Peppersmith wants to enter the market of Germany with the product Tingz. Germany is a developed country so Peppersmith should select clicks as their distribution tool. There are several reason to select clicks as a distribution tools for the market of Germany. 1st of all Germany is a develop country and they are advanced with technology so it is to establish and handle clicks in Germany. 2nd one is, maximum people of Germany are educated and have enough knowledge about use of technology and clicks tool also requires people who are educated and experience with communication technology. 3rd one is, people of Germany are very much busy as like other develop country and they are not willing to buy their products in physical way so they are mostly dependents on online shopping. 4th cause is, as a developed country the security system of German is very much secure so there have no scope of fraud like developing country in online business. So Peppersmith should select clicks as their distribution tool in Germany.


Conclusion:
From above discussion it can say that Peppersmith has a perfect place to run their business in Germany because no other child food company have enough online shopping effort as Peppersmith have. To retain in the market of Germany Peppersmith should produce quality product and their home service provider should also need enough trained to handle their customer needs. They should also collect information about German market as more as possible to set their business for a long last.




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