Chapter 4

Identify and Meet a Market

Need
4.1 Identify Your Market
4.2 Research the Market
4.3 Know Your Competition

Entrepreneurship: Ideas in Action 6e

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Lesson 4.1
Identify Your Market
Learning Objectives
4.1-1 Identify a target market by analyzing the needs of
customers.
4.1-2 Explain how market segmentation can help an
entrepreneur analyze a target market.

Chapter 4 Entrepreneurship: Ideas in Action 6e

Slide 2 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Target Market

 Target market: Individuals or companies interested in a

product or service, and willing and able to pay for it
 For example, a car dealership sell old, beat up, Dodge
Rams – who is it targeting?

Chapter 4 Entrepreneurship: Ideas in Action 6e

Slide 3 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Target Market (continued)
 Identify Your Target Market
1. Who is my potential market? Are my
customers individuals or companies?
2. If my customers are individuals, how old are
they? How much money do they earn?
Where do they live? How do they spend
their time and money?
3. If my customers are companies, what
industries are they in? Where are those
industries located?
Chapter 4 Entrepreneurship: Ideas in Action 6e
Slide 4 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Target Market (continued)
 Identify Your Target Market (continued)
4. What needs or wants will my product or
service satisfy?
5. How many potential customers live in the
area in which I want to operate?
6. What is the demand for my products or
services?

Chapter 4 Entrepreneurship: Ideas in Action 6e

Slide 5 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Target Market (continued)
 Identify Your Target Market (continued)
7. Where do these potential customers
currently buy the products or services I
want to sell them?
8. What price are they willing to pay for my
products or services?
9. What can I do for my customers that other
companies are not already doing for
them?

Chapter 4 Entrepreneurship: Ideas in Action 6e

Slide 6 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Market Segments

 Market segments
 Groups of customers within a large market who share
common characteristics
 Market segmentation is important because most
products and services appeal to only a small portion of
the population.

Chapter 4 Entrepreneurship: Ideas in Action 6e

Slide 7 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Customer Profile

 Customer profile
 Description of the characteristics of the person or
company that is likely to purchase a product or service

Chapter 4 Entrepreneurship: Ideas in Action 6e

Slide 8 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Customer Profile (continued)

 Demographics
 Data that describe a group of people in terms of age,
marital status, family size, ethnicity, gender, profession,
education, and income

Chapter 4 Entrepreneurship: Ideas in Action 6e

Slide 9 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Customer Profile (continued)

 Psychographics
 Data that describe a group of people in terms of their
tastes, opinions, personality traits, and lifestyle habits
 Use-based data
 Data that help you determine how often potential
customers use a service

Chapter 4 Entrepreneurship: Ideas in Action 6e

Slide 10 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Customer Profile (continued)

 Geographic data
 Data that help you determine where your potential
customers live and how far they will travel to do business
with you

Chapter 4 Entrepreneurship: Ideas in Action 6e

Slide 11 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Sample Customer Profile

Chapter 4 Entrepreneurship: Ideas in Action 6e

Slide 12 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Summary of Review Questions 4.1

1. To guarantee success for your business, you must produce a good business idea. F/T
2. Entrepreneurs estimate demand for their product or service by identifying their target market. T/F
3. Marital status, income, and age are useful data for identifying your target market. T/F
4. A market segment is made up of people who share common characteristics. T/F
5. Segmenting your target market is usually not necessary because most markets are small. F/T
6. Data that helps you determine how often potential customers use a particular service is called a
customer profile. F/T
7. A customer profile should include demographic data but not psychographic data. F/T
8. A marketing strategy identifies customers that you can serve more effectively than your
competitors can, but it cannot help you determine the size of your market. F/T
9. Demographics describe a group of people in terms of their taste, opinions, personality traits, and
lifestyle habits. F/T
10. I want to go back to school May 3 to finish school. ??

Chapter 4 Entrepreneurship: Ideas in Action 6e

Slide 13 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.