14 Customer Consumer and market types

Summary

This video explores the distinction between customers and consumers, emphasizing how they may differ in specific scenarios. It discusses examples such as baby food and gift-giving to clarify the roles of customer (who purchases) and consumer (who uses the product). The video also highlights the importance of considering both perspectives when designing products or services. Additionally, it reveals a crucial secret for entrepreneurs: understanding the four types of startup markets—existing, re-segmented, new, and clone markets—and how these impact various aspects of business, from pricing to sales strategies and customer needs.

Takeaways

• 😀 The terms 'customer' and 'consumer' are not always the same; the customer buys the product, while the consumer uses it.
• 😀 In the case of baby food, parents are the customers because they purchase the products, but infants and toddlers are the consumers as they use them.
• 😀 When buying gifts, the buyer is the customer, and the person receiving the gift is the consumer.
• 😀 Businesses must consider both customers (who make the purchase) and consumers (who use the product) when designing products or services.
• 😀 A consumer-friendly and pocket-friendly product is essential for both attracting customers and satisfying consumers.
• 😀 There are four types of markets for startups: existing, segmented/re-segmented, new, and clone markets.
• 😀 In an existing market, the competition is already established, and entering it requires strategic planning and significant resources.
• 😀 A segmented or re-segmented market focuses on a specific part of an existing market or addresses it in a new way, creating niche opportunities.
• 😀 A new market is one where the startup introduces a product or service that didn’t exist before, targeting untapped consumers.
• 😀 A clone market involves replicating a successful business model in a new location or market, capitalizing on proven ideas.
• 😀 The type of market a startup enters influences several key business factors, such as market size, costs, sales models, profitability, and customer adoption speed.

Q & A

What is the key distinction between a customer and a consumer?

In most cases, there is no distinction between a customer and a consumer. However, in certain situations, such as with baby products, the customer (the parent who buys the product) is different from the consumer (the infant or toddler who uses it).

Can you provide an example where the customer and the consumer are different?

Yes, an example is baby food products. The parents are the customers who purchase baby food, while the infants or toddlers are the consumers who use the product.

In the case of buying gifts, who is the customer and who is the consumer?

The customer is the person who buys the gift, while the consumer is the person who receives and uses the gift.

Who should entrepreneurs focus on when designing a product or service, the customer or the consumer?

Entrepreneurs should focus on both the customer and the consumer. The consumer's satisfaction with the product is important for the customer to make a purchase, while the customer needs to find the product affordable and suitable.

What impact does a product's design have on both customers and consumers?

The design of a product needs to be consumer-friendly (appealing to those who use it) and pocket-friendly (affordable for customers who buy it). Both factors are crucial for the success of the product.

What are the four types of markets for startups, according to the script?

The four types of markets for startups are: existing markets, re-segmented existing markets, new markets, and clone markets.

Why is understanding the type of market important for startups?

Understanding the type of market is important because it impacts key factors like market size, entry costs, competition, product positioning, sales strategy, required funding, and how long it takes to become profitable.

What does 'chasm width' refer to in the context of startups?

'Chasm width' refers to the gap between early adopters of a product and the majority of the market. It affects the time and effort required to transition from initial adoption to broader market acceptance.

How does the market type influence a startup’s sales cycle?

The market type influences the sales cycle by determining the speed at which a startup can achieve sales, the cost of sales, and how long it takes for the product to be accepted by the target market.

What factors are affected by the type of market in a startup’s business strategy?

The type of market affects the startup’s market size, entry strategy, competition, product positioning, sales model, profit margins, funding requirements, and time to profitability.