9.2 Market Sectors
Essential idea:
Designers must research and consider the target market sectors and segments in the design of their products.
Nature and Aims of Design
Nature of Design
Designers must consider the market when targeting their product, service or system. The smaller the sector, the more the target audience will have in common. Companies may decide to compete in the whole market or only in segments that are attractive and/or familiar. A designer’s understanding of the identified market is essential. (2.6)
Aims
Aim 6: By identifying the market sectors and segments a product will be designed for, a designer can gain data directly from the perspective of the potential consumer.
Guidance
As DP Design Technology student you should:
Recognize the categories of market sectors
Understand the influence of market sectors
Understand that consumer market segments are organized into: income, profession, age, family, values, behaviour
Understand the development of a product family
Concepts and Principles
Designers must take into consideration the characteristics of the market they are designing for. This will help designers identify the characteristics of the product that will best appeal to their target users, and to best meet their needs.
By understanding the market sector and segments, designers can design for very specific sets of users, or develop a product family that meets the needs of a broad ranges of users.
Categories of Market Sectors
Client based Sectors
Client-based sectors refer to specific types of clients. These are divided into four main sectors:
Consumers: Individuals purchasing products and services to meet their needs.
Industrial: Large-scale manufacturers
Public Sector: Government funded or operated goods and services
Commercial: Companies selling to other companies or individuals
Each client-based sector has specific characteristics and needs that would be addressed by a product or service.
For example, an office chair sold to public sector clients may be sold in bulk (more than one item at a time), be manufactured of interchangeable parts that can be repaired by a service provider, and use materials that can be easily cleaned. Depending on the client, low price may also play an important role.
An office chair sold to consumers, however, might use different materials and colors, and be more expensive and more comfortable. The needs and expectations of someone setting up a home office may differ than those of commercial office.
Geographic Sectors
Geographic sectors refer to groups of users defined by a region, value, culture, and its characteristics. Along with the distinct characteristics of a region, the purchasing power of consumers will also differ.
In Korea, special kimchee fridges are designed to keep this fermented food at the optimum temperature. Because of the cultural importance of this food, there is a strong domestic market for these types of fridge, but a very limited international market (which is largely the Korean diaspora).
Influence of market sectors
As technology advances and develops, the goods and services in a given sector will also change. In addition, the market sector will also grow and shrink in size due to external factors such as the health of the economy.
Knowing the state of the market sector, and whether it is changing can help designers and manufactures determine the characteristics of the product that should be developed. Likewise, knowing the relative health of the market is important for understanding if entering the market is financially rewarding.
Market Sector and Market Segment
Market Sector is a broad categorization of a market. Market segmentation is the further division of the market into smaller, distinct segments. The related segments share some common characteristics, but are also distinguished by some key characteristics.
Classifications of consumer market segments
Classifying the market into segments allows a company to more closely target a specific type of user by designing for their needs, and to market directly to them. For example, professional mountain bikers will have very different needs from a novice cyclist. Accordingly, marketing aimed at this professional segment would highlight the performance, durability, adjustability, etc., of the bicycle and its components. On the other hand, marketing aimed at the novice rider might emphasize comfort, safety, and ease of use.
Market segments are typically divided into four categories:
Demographic: Age, sex, income, education, family/couple/single. For example, a family of five purchasing a car would prioritize safety, number of seats, and interior space, while a single person might prioritize cost or style and be less concerned about how many child safety seats the car can hold.
Geographic: Country or region. For example, users of an app in Canada may require English and French and use metric units, while US users would only expect to see English and imperial units of measure,
Psychographic: Social status, personality, values, lifestyle. For example, users of a reusable water bottle would want to highlight their eco-conscious choice. The color scheme, graphic design, or even shape of the bottle would communicate this.
Behaviour: User needs, attitude, buying behaviour, loyalty to the brand. For example, users of Apple products may be loyal to the brand, and prefer an Apple product over a similar product by a different manufacturer.
Understanding the Market Segment.
Through research into the market segment, the designer can identify characteristics of the design that will meet the user’s needs. In addition, knowing the market segment can also help inform aspects of manufacturing and distribution, as the size and characteristics of the segment way determine the scale of manufacture and the associated costs of production.
Market Segment and Scale of production
For example, a bicycle brake lever for a high performance mountain bike might be considered a niche product; it has a relatively small market segment compared to bicycle riders in general. Small scale batch production would be a better option for this product than large-scale mass production. The corresponding higher unit cost would reflect the scale of production; But this cost would be tolerated by the market segment because of the perceived value and performance gain.
When selecting a topic for investigation for your IA, understanding which market sector and segment your product is positioned can help you better identify and justify the scale of production in Criterion F.
Product Family
A product family is a collection of products that have a common classification. Companies develop product families in order to appeal to a broad range of target users. Typically, if a product proves to be successful in a market, the manufacturer may extend the range of products available to capture a large portion of the market. Well developed product families can build a strong brand image.
Key features of a product family include:
Shared aesthetics: The form and appearance share common characteristics that unite the products.
Shared parts: The products might share a some common parts or assemblies. This will allow them to preform similar functions, have a unified appearance. Additionally, the shared parts reduce the manufacturing and service costs.
Apple's range of hardware and software options are highly integrated, but also specialized to different users. The integrated and carefully constructed user experience of the products results in a seamless experience for users if and when they move from one product to another. This user experience is one of the key factors that builds strong brand loyalty.
The range of cars offered by BMX share similar stylistic features and components. However each model and series is designed with a specific user in mind: family car, luxury car, sport driver, eco-fan, etc.
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Source: Fitbit.com
Fitbit first entered the market with fitness trackers targeted to active individuals. Over time, the success of the initial tracker built brand awareness. Now the company offers a range of trackers target to children (the Zip), everyday users (Flex, Alta) to athletes (Charge HR and Surge) to users who also want features of a smart watch (Blaze and Surge). Each of these models uses similar technologies, materials, and manufacturing techniques, but is differentiated for different market segments. Together, though, these products from a Product Family.