How do you work out your target market?
There are a number of marketing definitions but one of the most succinct is “getting the right message to the right market via the right media and methods”
In my experience too few new business owners think about the market – or target market - part –of that statement which is very strange. Forgive me for stating the obvious but if you don’t know that there’s a market for what you’re doing, how do you know anyone is going to buy from you? Failing to think about this means you’re effectively going
When I ask "Who are your customers? Who will buy your product?" I’m often surprised that otherwise savvy business people either have no idea who will buy from them or think that 'everyone' will.
Assumptions like that can lead to wrong decisions, wrong pricing, wrong marketing strategy – and ultimately, business failure. Basically then, trying to start a small business without researching your potential market is as sensible as setting out for the North Pole with a surfboard!
So what should you do?
There are two research methods of getting really honed information about your existing customers and your potential ones.
Secondary research which is...
information that's already been collected by someone else. For example surveys, articles, directories, government websites, sector websites.
Primary Research which is...
information that you have gathered directly from the source. While this kind of market research data can be the most costly and time-consuming to gather, it can also be the most valuable, because it's the most current and the most specific. Primary research can be gathered via:
- mystery shopping
- focus groups
- product tests
- visiting website/store/trade shows
- Reading and printed and online consumer articles
- Don’t forget to look at forums to get an idea of what people's concerns are regarding certain products or services.
- Take a look at trending topics on Twitter.
This type of research an give valuable, very honest insight as to what it is people dislike or what they are looking for.
During such research you need to thinking about things like:
- What proportion of your target market has used a product similar to yours before?
- How much of your product or service might your target market buy? (Estimate this in gross sales and/or in units of product/service sold.)
- What proportion of your target market might be repeat customers?
- How might your target market be affected by government policies (e.g. new bylaws or changes in taxes)?
- Is this a fast moving environment where you constantly have to innovate and do you have the resources to do this?
If the sector looks like a goer, you then need to ask yourself some further questions:
- Are there enough people in that segment to support a business ?
- Will my target really benefit from my product/service? Will they see a need for it?
- Do I understand what drives my target to make decisions?
- Can they afford my product/service?
- Can I reach them with my message? Are they easily accessible?
- Does my business have the skills and expertise to deal with the chosen segment?
- Is there growth in the segment?
I hope you’ve found this helpful. If you need any more assistance in identifying your target market please get in touch