A Market is the demographic and/or geographic group or groups of buyers for products and services on offer. It may be limited to a small area or may be worldwide but that is dependant on the type of product or service on offer.
But a market can be defined only through the Marketing effort that is put in to exploit this market. The potential market may be larger but the market for a product or service is the targeted market for which it makes this effort. Using different methods, Marketing determines the size of the market that is being approached but this has to be a controlled exercise otherwise the effort will be aimless.
Usually this data is drawn from valued sources such as the U.S. Postal Service Deliverable address counts, Equifax TotalSource™ consumer database household counts, as well as state and local agencies. Some important databases are:
National Change of Address (NCOA) is a database owned and updated by the United States Postal Service (USPS) It containing approximately 160 Million permanent address records filed with the USPS over the last 48 months. (NCOA)
Mail Preference Service (MPS) - This list is managed by the Direct Marketing Association and lists people who have opted not to receive advertisements through mails. Deceased Master File Suppression – This list flags addresses whose primary residents have died.
With this data it is possible to segment the market and subsequently to determine the target customers for the organization’s products. Once this data is available, the serious exercise of Segmentation begins.
Markets are heterogeneous and are created by reasons of different values, needs wants, constraints, beliefs and incentives. Customers differ in their values and perceptions and want to purchase things that have value for them. Value is not just the monetary part, but also the usefulness and emotions that with go with it. The need and want play a great role in