CustoMER MARKET

A market is a medium that allows buyers and sellers of a specific good or service to interact in order to facilitate an exchange. This type of market may either be a physical marketplace where people come together to exchange goods and services in person, as in a bazaar or shopping center, or a virtual market wherein buyers and sellers do not interact, as in an online market.

In the context of the business system, we refer sellers to the business ecosystem, and we identify customer markets as a separate entity that is a set of buyers and customers (including prospects) of the products (goods and services) in the business system, as well as the relationship between buyers/customers and sellers, and other participants of the business ecosystem.

The customer market can provide an answer to the question: WHY is the product created in the business system? In other words, the reason why the business system exists.

The customer market could be divided into four parts, as presented in the figure:

The green segment represents customers that purchase the product of a company.

The pink segment represents customers that purchase the same or similar products from competitors. Traditionally, companies compete with each other for customers and try to woo customers away from competitors. Accordingly, the business system constantly looks for different ways to retain its customers (so that they do not go away to the competitors) and to woo the competitors' customers. There is even a special term for this problem - the "strategy of the red (or crimson) ocean".

The blue segment represents potential customers (or non-customers), i.e., people that are neither customers of the company's product nor customers of the competitors' products. These people have needs that some product could satisfy, but for some reason they do not acquire this product. The task of turning potential customers into customers is also sometimes called the "blue ocean strategy".

The light gray segment represents the so-called never-customers, i.e., those that do not need a specific product at all. For example, people living in southern countries do not need winter clothing or arctic gear. Another example: implants for the deaf people has no value to the people with normal hearing. To turn never-customers into customers, it is necessary to rethink the product and understand how this new product could benefit these people.

The attraction and retention of customers is a critical activity for the business system. A large number of different problems arise and need to be addressed in this sphere.

We identified 2 groups of tasks that are addressed in business models: attracting customers and integration of customer markets.