All about markets and how to map them.
What are markets based on?
Markets are based on a multitude of factors including but not limited to supply and demand, mutual trust, value, variety, and access.
- Supply & Demand – For a market to exist there has to be some balance between supply and demand. A market cannot exist if there is nothing to sell or if there is nobody to buy.
- Mutual Trust – In a market, there is mutual trust between the stakeholders that enables them to go through with their economic transactions. Sometimes, trust is enforced by regulatory bodies.
- Perceived Value – Markets cannot function until the exchange of goods or services holds value for both parties. The value can stem from the utility for the buyers while the financial benefit is the primary driver for sellers.
- Variety of Commodities – Markets often rely on a variety of products and services offered to create a sense of convenience and provide free choice. The bigger the market, the greater the variety.
- Consumer Access – Another key aspect on which markets are based on is easy, quick, and affordable access for the target audience. It is one of the major reasons for the recent popularity of digital markets.
What is a market-based marketing approach?
A market-based marketing strategy is one, which a wide range of market factors into account prior to devising a marketing plan. Informed decision-making enables businesses to enhance their return on investment and cut down their marketing spend. Market-based approach involves evaluation of the following factors:
- Extent of Competition - The first and foremost consideration is to assess the existence, reputation, and market reach of brands selling an identical or similar product. It allows businesses to identify the challenges and pain points that their target customer base has to confront enabling them to create a targeted marketing strategy.
- Product Demand & Lifecycle - Market evaluation also includes reviewing product demand and its lifecycle by studying the competition, consumers, regulations, and other factors. The product lifecycle highlights how a certain product will gain and lose popularity over a certain period. Market research can help businesses identify that.
- Price Sensitivity & Demographics - Market research also reveals how price sensitive your potential target customers are. By identifying the socioeconomic status and price sensitivity of their customers, brands can market and position their product or service accordingly to maximize their sales revenue.
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