Page 110 - Export and Trade

time and resource intensive second phase –speaking
directly to the market.

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because it is the cheapest and fastest way to
understand a market. It should occupy 20 percent of
the validation project time. Critical questions that you
will answer are:
•Howbigisthemarket?
•Howisthemarketsegmented?
• How competitive is the market and who are my
competitors?
•HowwouldIgetmy producttotheendcustomer?
•Whatarethekeytrends/expectedchanges in the
market?
•Whatarethebarrierstoentry?
•Whatisthemarketgrowthrate?
• What sorts of organisations would I need to partner
with?
•Where shouldIpositionmyoffer?
• Which segments are likely to value my product/
service most highly?
Answering these questions will give you a strong
indication of the market segments and channels that
you will target with direct research.
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Market segmentation is dividing a large homogenous
market into distinct segments with similar needs the various uses for boats. Although they had many
and wants. Different market segments have varying people willing to purchase their product, they couldn’t
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direct your focus to these areas. Segments may be They broke down the homogenous boat-user market
served by different distribution, sales and marketing into sub-categories by factors such as location, size, boat
channels, and some segments may be larger, less value, climate and boat per capita. This helped them
competitive, faster growing, or have more frequent to focus directly on a valuable niche and promote their
customers than others. product effectively.
This process can be completed by identifying
differences between customers in the large overall 3KDVH 7ZR
market. These differences can be used to group similar Primary research, or validation interviewing, involves
customers into subgroups – thus creating segments. VSHDNLQJ GLUHFWO\ ZLWK WKH PDUNHW WR JDWKHU ¿UVW KDQG
Understanding how the market is segmented insight and test your value proposition. This is an
and the characteristics of each also enables you to intensive phase which should include more than 50 calls
customise your marketing communications for your to interview members of the supply chain, from end
target audience. Segmenting the market allows you to users back to importers. Typically this is a two to three
adopt a concentrated strategy (exclusive focus on one month process that comprises 80 percent of your market
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DSSURDFK DFFRUGLQJ WR WKH QHHGV RI HDFK VHJPHQW A successful primary research phase will validate that
For example, a company selling boat maintenance there is a valuable pool of end users interested in utilising
product had a broad range of customers, considering your product or service; that there is a clear channel to

108 NZ Export & Trade Handbook 2018