Market Space – Dutch Uncles https://dutchuncles.in Market Intelligence & Mentoring Resources for Startups and Small businesses | Dutch Uncles Fri, 06 Aug 2021 16:21:27 +0000 en-US hourly 1 https://dutchuncles.in/wp-content/uploads/2020/12/favicon.png Market Space – Dutch Uncles https://dutchuncles.in 32 32 If You Are An E-commerce Start-Up This Is How You Can Enter New Markets https://dutchuncles.in/build/if-you-are-an-e-commerce-start-up-this-is-how-you-can-enter-new-markets/ https://dutchuncles.in/build/if-you-are-an-e-commerce-start-up-this-is-how-you-can-enter-new-markets/#respond Sat, 27 Mar 2021 10:35:05 +0000 https://dutchuncles.in/?p=20785&preview=true&preview_id=20785 Entering new markets in e-commerce means to get multiple revenue sources and to list your products/services on different avenues allowing you to expand across geographical regions. The number of online shoppers is multiplying rapidly and since people are physically moving less frequently, their attention is turned to the internet for all kinds of purchases. As […]

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Entering new markets in e-commerce means to get multiple revenue sources and to list your products/services on different avenues allowing you to expand across geographical regions. The number of online shoppers is multiplying rapidly and since people are physically moving less frequently, their attention is turned to the internet for all kinds of purchases.

As an e-commerce start-up, whenever you see it fit to explore new markets, the key is to take baby steps forward. It is always wise to start off small, try and test out how your products are received. Once you’ve toed the line, it may be safe to pump in more investments.

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Going beyond the local market is always daunting for an e-commerce start-up. Mainly because while the potential of taking your online store beyond your comfort zone is high, the impending risks can threaten to disrupt what you have already established.

How Indian beauty start-up ‘Purplle’ is going global:

Let’s take the example of ‘Purplle’, an Indian beauty e-commerce start-up who planned on expanding their presence online. Purplle verily understood the massive demand for beauty products online. In its latest Series D funding round, Purplle managed to raise $45 M backed by Sequoia Capital, Verlinvest, Blume, and JSW Venture. This latest funding round has taken the valuation of Purplle to a new high of $300 M. 

Purplle’s business model for start-ups:

Purplle’s Customer Acquisition Cost (CAC) is relatively low which allows them more room to strategize on retaining their existing customers. Start-ups have an excellent lesson here about focusing on trust building and retention strategies. 

The next aspect of Purplle’s business model for expansion is their product portfolio which is a mix of both in-house label products as well as the top brands popular with the consumers.

Minimizing risk for e-commerce start-ups in new markets:

Going beyond the local market is always daunting for an e-commerce start-up. Mainly because while the potential of taking your online store beyond your comfort zone is high, the impending risks can threaten to disrupt what you have already established.

While you may not know how to enter new markets, what you really need to know is ensuring that your entry is efficient, successful, and at low risk. 

Start-ups in e-commerce need to thoroughly research the ins and outs of new markets before leaping right into them. Whether you want to expand on a global scale or venture into different categories of selling online, perform business research to predict in advance whether your e-commerce start-up can succeed in new territory.

While taking your business to another country, there are several ground rules you need to be aware of. Although the growth trajectory can be tempting for a local e-commerce start-up, careful research and analysis on the new, unfamiliar market is essential if you don’t want your existing business to run the risk of disruption.

What’s in it for me?

For Indian e-commerce start-ups trying to enter new markets, here is a set of preventative measures for you to reduce the risk.

Kick-start your market research from the perspective of whether it is financially viable for your start-up in the new setting.

You also need specific answers to several questions before venturing into a new market. Things like, identifying who your new competitors will be, whether your existing products need tweaks before getting launched in a new market, whether your pricing needs tweaking to be more appropriate for a new market, the changes required in business processes or additional duties and costs you will incur in a new market. 

With all these preventative measures in place, your start-up will be able to minimize risk and successfully explore new markets in e-commerce.

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]]> https://dutchuncles.in/build/if-you-are-an-e-commerce-start-up-this-is-how-you-can-enter-new-markets/feed/ 0 Market Segmentation 101: Back to the Basics https://dutchuncles.in/aspire/market-segmentation-101-back-to-the-basics/ https://dutchuncles.in/aspire/market-segmentation-101-back-to-the-basics/#respond Mon, 08 Feb 2021 04:35:02 +0000 http://dutchuncles.in/demo/?p=7775 Through market segmentation, you get to know exactly who you are targeting. Keep the segmentation as measurable and precise as possible. Have you ever seen fur jackets being sold to people residing in Madhya Pradesh? Or school bags being sold to people in their 20s? Or meat to vegan? No right! This is because they […]

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Through market segmentation, you get to know exactly who you are targeting. Keep the segmentation as measurable and precise as possible.

Have you ever seen fur jackets being sold to people residing in Madhya Pradesh? Or school bags being sold to people in their 20s? Or meat to vegan? No right! This is because they are simply not the target audience for those products. Market segmentation is a practical way of bifurcating groups based on their attributes and prospects. Whatever product or service you sell can be valuable for one set of audience whereas noise for the other. Segmenting your market will help to focus your sales on the people who are going to buy your product or service. Here is everything you need to know about market segmentation.

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Demographic segmentation will help you to narrow down your target audience by highlighting “who are likely to purchase your product/service?”

What is market segmentation?

Market segmentation can be defined as the process of dividing people into groups based on their response to similar marketing strategies. Segmenting is a crucial initial step towards creating your marketing and sales strategies. As knowing for whom the strategies are in the first place will be the foundation and primary

When you are segmenting your market, there are a few key factors you need to consider. Below is what a perfect market segmentation looks like –

A secure segment

The market segment that you are targeting needs to be stable. A secure market is one where you know it’s not seasonal or a fad that will just vanish in a short span of time.

Keep a count

Ensure that your segmentation is measurable and quantifiable. Not having like a literal count but having an approximate number of customers will help you know exactly who your target audience is.

Precise bifurcation

When you are segmenting the overall market, know exactly who you are targeting. Keep the segmentation as measurable and precise as possible. It will help you a lot when you are planning sales and marketing strategies.

Easily accessible

Ensure your market segmentation can be easily accessed by your marketing and sales strategies. An ideal segment is the one that can be reached easily.

Types of market segmentation

Market segmentation is a game-changer that can make all the difference for companies. It is an opportunity to decide what exactly will drive your customers to buy. The four key types of market segmentation are –

Demographic segmentation

This is the most obvious and powerful type of market segmentation. Demographics are the information of the consumers that are easily identifiable. The usual components of demographics are –

Age
Ethnicity
Gender
Religion
Professional status
Income
Qualification

These demographics above will help you to narrow down your target audience so you know you are not wasting your time on those who are likely to not buy it. The market and sales strategies will be formed based on the targeted demographic. The advertisement of brands like H&M is more youthful and upbeat keeping most of the millennial audience in mind who often shop online.

Demographic segmentation will help you to narrow down your target audience by highlighting “who are likely to purchase your product/service?”

Psychographic segmentation

Psychographically bifurcating your audience is all about dividing them based on what their interests and personalities are like. It is a complex way of segmenting the market as it involves the mind. Demographic segmentation is quite direct and precise compared to psychographic segmentation.

The different ways of segmenting a market psychologically are dividing them based on –

Lifestyle
Hobbies
Personality
Goals
Values
Belief systems
Mental health

If you successfully match the psychographic demographic to its target audience, you will be able to speak to them on a personal level. Branding your product and standing out of the competition will be a piece of cake. That is why we often find advertisements of painkillers like crocin showcasing a stressful office environment that causes a headache. This is because most working professionals lead a stressful lifestyle and hence, the advertisement directly speaks to them.

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When several segments of the market are being observed and studied, many underlying and even unexpected opportunities are likely to unveil. These new marketing opportunities can prove to be a great way of figuring out the sales techniques for the future.

Geographic segmentation

Geographic segmentation is all about dividing people into groups simply based on their location. It is one of the easiest and simplest ways of segmenting the market. Geographic segmentation majorly includes –

Country
City
Postal code
Specific region

When your target audience belongs majorly to metropolitan areas, the form of advertisement you opt for will vary as compared to if your target audience was the rural population. For rural populations, usually, mass communication channels like the TV and radio are the go-to platforms. Whereas, for metropolitan audiences, several applications and websites on the Internet are a primary way to advertise. Geographic and demographic are distinct segments in nature and usually easy to figure out as compared to the behavioural and psychological ones.

Behavioural segmentation

Behavioural segmentation is all about dividing the audience based on their actions. Here you will get everything you need directly from your website itself. As your website will reflect what is the behaviour of your consumers by simply deriving the data available on it. This form of segmenting will give you –

Purchasing pattern of the consumers
Purchasing history of the consumers
The different types of content consumed on your website
Prospects who visited your website
Trending/most bought products

This segmentation will provide crucial information as it will reflect what has been working for your business. It will also help you greatly in forming upselling and cross-selling strategies to make more sales to your existing customers. One of the most common ways is offering add-on products to a customer’s current purchase. When you are buying something online and the, ‘you may also like’ tab that shows up is a result of behavioural segmentation.

Perks of market segmentation

Since market segmentation directly impacts the sales of a company and in turn profits, if done correctly, the benefits are enormous. Some of the obvious ones being –

Helps in developing marketing programmes

Knowing how market segments are responding to specific marketing programmes will give you clarity on what is working and what is not. They will help you to utilise your marketing budget effectively on fruitful projects.

Identifying market opportunities

When several segments of the market are being observed and studied, many underlying and even unexpected opportunities are likely to unveil. These new marketing opportunities can prove to be a great way of figuring out the sales techniques for the future.

Retaining customers

Segmenting and bifurcating the market will help in retaining your customers. As narrowing down will help you to create marketing and sales techniques that will establish a personal touch and direct connect with your consumers.  

Optimum utilisation of resources

When you narrow down your audience, you can focus on them better. You can tailor the marketing and sales strategies based on your targeted segment. This will lead to a more efficient and optimal way of utilising the resources and hence, will produce a better output.

Boosts campaign performance

Market segmentation will aid in boosting your campaigns by targeting the right audience, at the right time, with the right message. The tailored messaging will impact your audience directly by highlighting their preferences and needs. When you have segmented your market, you will get the much-needed bird’s eye view.

Provides a competitive edge

Segmenting your audience will help you in finding whom you should focus on for selling your product/service. This in turn will boost the competitiveness of your business. When the marketing team is innovating strategy for a specific group of people, they will be able to touch the audience in an even better manner. This will help them to stand out from the competition and attract more consumers.

Increase in sales and profits

Market segmentation is an effective process that will help to target particular segments and find better opportunities. When a strategic advertising and marketing approach is being followed, you are bound to attract more customers and make more sales. The detailed focus will help you to increase profit.

Reveals possibilities of expansion

Market segmentation will unleash potential targets that you may not have been aware of! When you are researching different markets, you might find an untapped group of potential customers. If you run a bakery and are already aware of your local targeted market, taking the same bakery online, may unleash an unexpected set of consumers. It will help you to expand your primary market and also add new products and services based on your new clientele.

Offers several other insights

When you are conducting market research to figure out the segmentation, you will also find several other pieces of information that will be useful for your business. Segmentation may give you an insight regarding how consumers are reacting towards key elements like current pricing strategy, customer service and logistics.

Market segmentation is a great tool for figuring out overall what is working for your business and what isn’t. It aids in maximising sales by revealing new untapped markets or discovering strategies to make more sales to the existing consumers. The various sets of demographics mentioned above will help you to get to the bottom of whom do you want to target for your business. Once you find whom you want to sell, one of the key areas of focus becomes branding your products and business. Branding your products to your desired audience is another challenge in itself. Read our article on ‘branding’ to know more about it.

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