This guide for writing a startup business plan helps you understand the need to determine the behavior of your target market. Behavioral analysis of markets typically integrate psychology and its insights with the neo-classical economic theory focus entirely on the actual market participants. Behavioral research particularly study the variables that influence the formation of habits, which includes the habitual patterns of decision making.
Habit formation has become a standard approach to market research. The use of its algorithm has turned data mining into a highly targeted money making research. Through behavioral research, you would know why a certain product is failing.
The research can also help you identify the reasons for the consumer disconnect. The strategy to meet the consumers’ needs can be based on the common customer behavior. Behavioral targeting is also known as behavior marketing, which studies the profiles of the online users for a deeper level of ad customization.
Getting an insight about the habits and desires of the consumers help publishers and online marketers display relevant content that makes it possible to reach a more receptive audience. Most online marketer uses analytics and other types of information to tailor the message to the user, such as web analytics, computer applications and cookies, browsing and search history, IP addresses, and subscriptions.
Creating user profiles of individuals or a specific target segment can be overwhelming, but it is what actually brings in the money. Always generate relevant and targeted content or advertisements that appeals to their interests. By analyzing user responses and demographics, the ads can be highly targeted to a person’s interest.
Self-starters with excellent communication, multitask, and problem solving skills will do well in this area. As technology continues to advance, you also need to keep with the fast paced and ever changing market environments. Market behavior forecasts are useful in planning long term business strategies.
Based on the mere fact that the shaping of the market depends on random factors, such as the diet fads other trends, applying the consumer behavior marketing puts you in a more distinct competitive advantage and position that distances you from the rivals. It is the core of any good marketing strategy that provides an actionable insight.
Of course, the person who possesses an ultimate understanding about the target audience gains a competitive advantage over those that do not. The ultimate knowledge about what drives the purchase behavior of your target market is golden. Do not assume the data. Always based it on market research and analytics.
When it comes to converting visitors or potential customers, the secret lies deeply in your understanding of the consumer behavior and learning what your buyer wants from your business. In a competitive marketplace, remember that the effectiveness of the marketing mix is determined not only by its absolute value, but also by its relative value with respect to the competition.
Determining market behavior. What are the factors affecting your target market’s behavior and buying preferences? How do these factors work on influencing the consumers’ behavior? There are four main factors that influence the behavior of a consumer, namely the cultural factors, social factors, personal factors, and the psychological factors.
These factors are crucial when it comes to understanding why an individual chooses one product over the other. It also tells you why a consumer selected a certain ad over the other ad. Individuals do not necessarily make economic choices. There are other factors affecting the way they choose your brand over your competitors.
The market structure analysis is a way of determining the quantitative frameworks that show the arrangements and the interrelationships of the various parts of a market in terms of consumers’ attitudes, needs, perceptions, product usage, behavioral patterns, and other aspects of consumer behavior. The goal is to obtain insights for market planning that go beyond the conventional marketing tools.
At this current point in time, there is no general recognized definition of the personality concept in psychology throughout situations, where a person’s behavior can be viewed, described, explained, or otherwise predicted. Diverse as they seem, they are mostly based on the basic human processes of perception, motivation, attitudes, and behavior, rather than on demographics and marketing mix variables. As they say, life is a psychology!
Product positioning can be based on the perceptions and preferences, while the market segmentation and other forms of market structure can be based on the perceptions, preferences, usage and shopping patterns, product benefits and attributes wanted, perceived problems and deficiencies in present products, situational factors surrounding product usage, and other aspects of consumer behavior.
The human behavior is most generally determined by its interactive interplay with the immediate environment. The human behavior is literally a function of the person as it interacts with its environment. The consumer behavior analysis practically brings both concepts of the behavioral economics and the behavioral psychology into the marketplace of human purchase and consumption activities.
To improve your understanding about the human buying behavior, you can use the market research to learn about the way they think and why they purchase a specific product. The market research can show the behavior and how they make their purchases. There is literally no reason why it should not apply to any economic system.
It is important to first identify the market segment and your competitors in that specific group. Doing this can help you understand why they purchase from your competitors. Your market research does not need to be elaborate and expensive. It can be simple, but yet filled with usable and valuable information.
You can make your way through the process by doing this
- Identify and define the problem
- Collect and analyze data
- Determine the sample plan and size for your research
The individuals you group in a specific market segment have purchasing behavior relative to their purchasing power. Those people who have unsatisfied needs, but lack the financial sources or credit do not constitute a viable market, plainly because they have nothing to offer in exchange for your product or service. Remember, without their purchasing power, no transactions can occur.
Consumer behavior is characterized and highly influenced by both the economic and technical properties of the goods on one hand and the social meaning of acquiring, owning, and using them on the other. To the extent that consumption is influenced by consequences such as these, it is thereby considered as operant.
When it reflects both the functional and the social, in many ways, you can say that it is under the influence of the complex utilitarian and informational reinforcers. The term contingencies of reinforcement refers to the particular situation in which the behavior occurs, the behavior itself, the rewarding and punishing consequences of the behavior, plus the relationships among them. It is easy to sell, but not easy to market your product to the right people, and convert whom you sell into paying customers.
Market segmentation and its characteristics
Your focus strategy largely depends on the responses and the characteristics shown by your market segment. In order to fully define the parameters that identify the particular dimensions that distinguish one form of behavior of your market segment, you need to highlight the unsatisfied needs of the customers.
Market segmentation and the classification of customers into groups may be one of the richest areas in marketing science. Goods can no longer be produced and sold without any insights and consideration of the needs and preferences of the customers. There are six criteria involved in the rethinking of the market segmentation concept, namely the identifiability, substantiality, accessibility, stability, responsiveness and actionability.
Determining your market potential involves the process of locating and investigating both the purchasing power and the needs that can be satisfied with the product. You need to understand the psychology behind how consumers think, feel, reason, and select between different alternatives.
If segments respond uniquely to marketing efforts targeted at them, they satisfy the responsiveness criterion. Responsiveness is critical for the effectiveness of any market segmentation strategy, because differentiated marketing mixes will be effective only if each segment is homogeneous and unique in its response to them. If the segments to which a certain marketing effort is targeted change their composition or behavior during its implementation, the effort is very likely not to succeed.
Any information limitation you may have would highly influence consumer decisions and your marketing outcomes. The behavior may occur either for an individual or as a context of a group. It involves mainly with the use and disposal of the product as well as how they were purchased.
The information can best influence your market positioning strategy and how you may be able to encourage the product consumption. Segments are actionable if their identification provides guidance for decisions on the effective specification of marketing instruments. Here the focus is on whether the customers in the segment and the marketing mix necessary to satisfy their needs are consistent with the goals and core competencies of the firm.
In other words, the context of market segmentation can be most described as the selection of artificial groupings of consumers that were designed based on certain variables and criteria to help managers design and target their strategies. The segmentation basis could be a set of characteristics used to assign potential customers to homogeneous groups. The basis can be as follows
- Cultural variables
- Geographic variables
- Geographic mobility
- Demographic and socioeconomic variables
- Postal code classifications
- Household life cycle
- Household and firm size
- Standard industrial classifications
- Socioeconomic variables
- Media usage
You should understand that a successful segmentation is the product of a detailed understanding of your market to ensure your activity is cost effective, and will therefore take time. Market segmentation is the bedrock of a successful marketing strategy and implementation.
It is the failure to get the grips with market segmentation that lies at the heart of marketing that usually fails a company. Before starting any project, let alone one as strategically critical as market segmentation, it is important to know where you are heading and what the route map looks like. Perception is everything.
Responses of target market
By understanding which ones are receptive to the features of what your product can offer, you can understand how the consumer initially accepts and adopts your brand. Determining the market behavior helps reduce the risks associated with introducing a new product.
It is critical to know how your target market will respond to your product so you would be able to identify opportunities that are not currently met. Shortages in leads generated within the primary market indicates a flaw in your penetration rate analysis.
For online marketing, it is essential that you design your site in a way that meets their needs. You should not let your visitors arrive on your page without really knowing where they are and without seeing any context. Marketing’s indispensable activity is the creation and offering of value to produce desired responses.
You are able to produce a desired, voluntary response by creating and offering desired products and content with value to your target market. Effective marketing consists of actions that are calculated to produce the desired response from the market. Most marketers employ an A/B testing to see which landing page techniques generate the best responses from the target market.
The goal of a marketing campaign is always to trigger a specific response. To be effective, all the elements of the marketing mix must drive targeted consumers to perform the key response action. The first step is to decide what you want the target consumer to do and you must be able to measure the response action in some way. The immediate goal could be to create buzz, but the eventual goal should be to stimulate sales.
Slice that market pie
The key to survival, profitability, and growth in a highly competitive market environment is identifying and really learning about the buying behavior and preferences of your potential market. Consumer behavior can drive profitability when you are able to predict what is trending in your industry or market.
A person who shops does not necessarily buy the product. There are several factors he needs to consider before the final purchase. This means having to identify the relevant factors affecting the decision, such as the lifestyle, income, spending capability, and the need for the product.
You need to know how people would react when you launch an advertising campaign so you can determine future sales. Information about their responses can help you develop a good advertising strategy. How do you get the message across? But not only that, how do you get them to act on your message?
Market sensing helps uncover why and how things happen. You gain a deeper insight about the motivations and drivers of your target segment.
Attracting and keeping customers can be done through market sensing and market relating. Just look at the right direction in knowing your market behavior and engage them by fixating on the existing needs of the market and not listening to the voices of your rivals that may lead to blindness towards the market.
You need to know how to use your information and makes sense out of it. Improving your market sensing ability can alter your market relationships and profitability levels.
It asks you to engage with the information, which is beyond simply listing the environmental threats, opportunities, and trends. How well do you understand your market? How well can you engage your market?
Market sensing is a research technique that involves collecting qualitative data through a series of interviews, focus groups, and in depth questionnaires designed to help management teams understand the external market in a more effective, efficient and emotive style.
Understanding what the customer wants and creating content based on a buyer persona, is the first stage in attracting your potential clients. Market sensing is the best approach to gain a better understanding of the market since its ultimate goal is to study the customers from the customer’s point of view rather than doing it from the company’s point of view.
You can go beyond the market research and learn how to do social listening, so you can act on opportunities to delight and service your customers better or identify a competitive niche. Social listening isn’t only about getting closer to your customers, but to get better at sensing what the market wants or might do. It is identifying how behavior trends change.
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