Target Market Analysis, Essay Example

Target Market Size

The market that we intend to target mostly is the Millenial Generation, which encompasses ages about 19-34.  Both sexes in this age group are very familiar with technology and use their SmartPhones or tablets for most of their every day needs.

A characteristic of this group is that they are more “tech savvy” and “more international in outlook than past generations.”[1]The Millenial Generation is also a very large demographic that totals about 77 million people, which is about equal in size to the Baby Boomers.  Three-quarters of this generation have created a profile on a social-networking site and the Millenials also seem to be brand loyal.  About 77 percent of this group surveyed by Edelman Digital said that they repeatedly buy products that they are accustomed to.  Although this is true of the Millenial Generation, 37 percent of those who were surveyed stated that they distrust big business and 40 percent said that they preferred buying local, even if the goods or services are marked higher in price compared to “mass-market alternatives.”[2]

Target Market Growth Rate

The market for a collective social media app is growing tremendously. According to one article Flipboard, the leader in the field of news apps, has brought in 160 million dollars in net income. Many individuals in the age group of about 20-30 years old want an app that has all the current social media and news in one place with easy access. The market seems to be expanding at a prodigious rate with no end to the growth in sight with 25% part-time pay including fringe benefits¹.The reasons that the market for a collective social media app that has gotten so big are simple because of the go-to-supplier channels have cutted out from the fixed costs (i.e., machineand labor); so, the chances for an opportunity for market growth would expect a net to zero marginal cost for the new app to be sold as a finished product.

First, it is very accessible. It is easier to open an app on your phone and read about the latest news on the internet than it is to carry a bulky newspaper. The second reason that this market has grown and is still continuing to grow isthe fact that companies are taking advantage of the marketing opportunities, such as consumers’ preferences for modernized, graphics, imaginary print font styles and trendy². Companies like Target are buying ads from products like Flipboard to put their product on the app. The final reason that the market is expanding is the product lures people in. The most popular magazines and newspapers like Sports Illustrated and the Wall Street Journal are found on these apps. Credible sources like these make people want to get the app which then in turns draws in more people and companies and the cycle never ends.[3]

Customer Motivation to Buy Product

According to the Millennials survey said that 40% preferred to buy goods and service locally than imported IT products².Our customers will get true and first-hand information immediately. The news which we use to show our customers is to collect all the newspapers, television stations and broadcast stations from around the world. The RL News shows our readers the source of every piece of news shown, and you can click the source of origin to check the news that you are looking at.

Customization is a highlight of this product. In order to satisfy our customers, we will design this application customizable. If an athlete were to use the app, he or she could customize the interface and news priority with more sports-related topics. If a businessman were to use RL News, he or she could customize their news to better understand competitive companies and or the stock market. Each customer will have a variety of choices of news, or they can choose to look at every area of news.

Because this product is an app, our customers are able to read their favorite news as long as their phones have the signal. The convenience of this product fits the modern and busy life today while still being involved with what is happening in the nation and throughout the world.

Competitor Analysis

Zite is a potential competitor of RL News. Zite has already been established on the top two mobile device operating systems: iOS and Android. Flipboard, who already has their own following and established applications, has recently bought them out.[4] According to Flipboard’s website, the application grows with the user, therefore catering the users’ interests and it is able to show magazine articles and news articles according to the users liking. It also connects easily with your Facebook and Twitter accounts. Zite has over 1,000 positive reviews on the App store, which showcases that the app is doing well on the market.[5] The current price for Zite on the Android and Apple App store is free. One area of weakness of this application is that it is free and requires users to pay for advertisements while in the application. It also only allows you to choose three top categories of interests for articles without creating an account.

Flipboard Social News is the precursor to Zite; and, Flipboard Social Newswas established around early 2013. It does the same things to any other news app tries to do. This app is unique because it caters to your own interests and hobbies. They advertise it as your own personal magazine. The price for Flipboard Inc.’s “Flipboard Social News App” is free. It also has its own advertisements at the bottomdue to the price of the app being free. The app is exclusively social media news and is not worldwide or national news.

CNN News and Fox News can both be considered potential competitors. CNN and Fox News are two of the most well-known resources for national and world news. CNN was founded in 1980 and Fox News was founded in 1996. They are two of the most sought out and trusted news resources, in particular, with the programming services, content acquisition, and distribution platform for approximately 98.9 million U.S.televisionshousehold⁶. Each network now has their own mobile app include to news articlesand updates with their partnership with Time, Inc. Both applications’ features includethe electronic sell-through services and internet streamingwhich they can be purchased on the Apple App Store.A con about the use of these sources is that both of these apps can have a biased opinion about the information they are projecting to the user. Their apps don’t allow you to customize to your interests, but simply just give you headlines and recent national and world news. The owner of Fox News, Rupert Murdoch, is currently trying to buy out CNN.Time Warner Cable currently owns CNN and executives are willing to fight for their news networkfor intelligence property of information technological products and programming services among their competitors.[6]

Indirect and Possible Future Competitor Analysis

Three of the biggest projected future competitors in the news application industry will most likely be Facebook Paper, Flipboard, and Google Propeller. One aspect none of these apps have is the price for user to use the app. All are free to download in either Apple’s app store or the Android Market, making them that much more competitive among advertisers since that is how a profit would be generated unless they know they would have a nearly zero marginal cost.

Facebook’s Paper app [7] launched in February of this year and geared itself toward being a new layout of Facebook, but aimed mainly at news rather than status updates by the user’s friends. The biggest strength Facebook’s Paper app has is an established name. Everyone knows what the original Facebook is and Paper is just an additional way to view news articles posted on Facebook. Another advantage is its ease of use. One review said it only took about five minutes to figure out how to use all of the options. One more advantage is the app allows easier reading of news articles by offering a full screen display rather than advertisements throughout. The biggest disadvantage is there is already an app in the Apple store called, “Paper”that is a drawing app, causing a lot of confusion.[8] One other main disadvantage they have is that this app has been released for the Apple App store only, and without an iPad or iPhone the user cannot access it. This app will be free, like it is the predecessor Facebook, when it finally does hit all the app markets.

Flipboard has a huge advantage in this competition because they have been paired with The New York Times exclusively.[9] Another advantage is that the creators have upgraded the app, allowing a user to search and customize news they receive. Lastly, Flipboard uses links to your social media profiles to customize the news you see based on your likes and interests.[10] Flipboard’s biggest disadvantage is the lack of consumer knowledge. Social media dominates today’s world; and, although Flipboard is catching on, many have not heard of it because of Twitter or Facebook.[11] Another disadvantage is Flipboard featuring The New York Times directly. By doing this a user can only read three full stories per day before being prompted to sign up for a Times subscription. This could scare users away and cause them to invest in The New York Times directly rather than the all-encompassing Flipboard app. Flipboard is offered free among all app markets.

Google Propeller has recently been put on the scene and is in its development. One advantage in the Google scheme is definitely the name.[12] There will be an amount of consumers who will not use the Facebook or Flipboard app solely because they are so mainstreamed. Another presumed advantage will be the Google+ account holders. Like Facebook, Propeller will be accompanied by a globally well-known name with a social media backing which will improve their chances of getting their product to their target market. Lastly, it has a sort of advantage by still being in development. Developers are currently working on the app and using the other news apps to better their own before the release.  The biggest disadvantage of Propeller currently is that it has not hit the market yet. That spawns the other disadvantage that upon the app’s release, which has not been announced yet while other competitors will have a chance to be that much ahead of the game. A price has not been set on this app and neither has a release date.

Product Involvement

The product is a low involvement purchase for customers.  It is not a large purchase that a customer will have to take time to think over, but rather it is a practical purchase for an individual who wishes to obtain news on a regular basis.

Repeat Customers

The customers will be both repeat customers and new customers. The market is not designed specifically for one or the other. New users can operate the product just as well as veteran users. The collective social media app is one that repeat customers can multiple times or just once.

Sources Used

Our group used SurveyMonkey to collect data on specific areas of our product.  The survey was sent out to both men and women between the ages of 19-27 and there were 50 respondents. The survey contain three questions: what area of news do you typically like to read, where do you usually obtain your news, and if news was easily available to you and was unbiased would you be more inclined to read the news more than you do now?  The results from the survey clearly show in Figure 1 that the market that our product is directed toward currently reads their news from social media sites such as Facebook or Twitter.  This presents a problem for the biased and reliability of these news sources.

Also, when respondents were asked if they would read the news more if it was easily accessible to them and was unbiased?  Would they be more inclined to read the news more? 81% answered yes, as shown by Figure 2.  These staggering numbers prove that there is a market for our product and that pursuing this target market would prove beneficial because of the numbers of customers that our app would generate.

[1]Tobenkin, David. “Millenials: Youthful And Full Of Expectations.” Alaska Business Monthly 24.3 (2008): 20-23. Business Source Complete. Web. 30 Sept. 2014.

[2]Krassner, Kathy. “Make Way For Millennials.” Gifts & Decorative Accessories 113.4 (2012): 70-76. Business Source Complete. Web. 30 Sept. 2014.

[3]Primack, Dan. “Exclusive: Flipboard Raising Another $50 Million.” Fortune.Com (2013): 1. Business Source Complete. Web. 29 Sept. 2014.

[4]Mangalindan, JP. “Flipboard Buys Zite News App From CNN.” Fortune.com (2014): 1. Business Source Complete. Web. 29 Sept. 2014.

[5] Zite.com Web. 29 Sept. 2014.

[6]”Fox Owner Murdoch Wants to Buy CNN Parent Company Too.” – RT USA. N.p., n.d. Web. 30 Sept. 2014.

[7]Miller, Ron. “Facebook Paper app repackages Facebook with news slant.” Fiercecontentmanagement.com 2014: Business Insights: Essentials. Web. 28 Sept. 2014

[8]”Facebook criticised for ‘confusion’ over Paper brand name; The developers behind popular sketching app Paper have criticised Facebook for launching an app of the same name instead of ‘building a brand name of their own’ and demanded that it be changed.” The Telegraph Online 2014: Business Insights: Essentials. Web. 29 Sept. 2014.

[9]”The New York Times and Flipboard announce launch of New York Times on Flipboard for iPad and iPhone.” M2 EquityBites (EQB) 2012: Business Insights: Essentials. Web. 29 Sept. 2014.

[10]Graham, Jefferson. “Flipboard gets personal with its upgraded app.” USA Today 2013: Opposing Viewpoints in Context. Web. 29 Sept. 2014.

[11]Tornoe, Rob. “Flipping for Flipboard: app becomes a big-time player in news aggregating through social media.” Editor & Publisher 2013: 24. Business Insights: Essentials. Web. 29 Sept. 2014.

[12]International Business, Times. “Google Develops Social News App ‘Propeller’ to Rival Flipboard, Zite.” International Business Times 9: Regional Business News. Web. 29 Sept. 2014.