Identifying Your Target Market
In Part 3 of this Business Start-Up Series, we will be taking a look at the Target Market and correctly identifying your target market for success. Find a PDF version of this presentation Here
In part one and two we took a look at what type of entrepreneur you are, and you came up with a great idea for your business so now you are ready to rumble. However not quite, now that you have your business idea, you need to now try to figure out your market. Generally you can sell to consumers and also to businesses, and in some cases to both businesses and consumers.
One of the mistakes businesses make, especially small businesses is that they try to be everything to everyone. The best thing to do here is to segment your market, the narrower you can make your market the better. Many business experts recommends this approach, it is a process known as creating a niche. Many businesses try to do everything and are surprise when things don’t work out , not realizing they may be confusing themselves and their potential customers.
There are demographic and psychographics one can use to segment their target market some demographic factors include:
- · Age
- · Location
- · Gender
- · Income
- · Education
- · Occupation
- · Ethnicity
- · Marital Status
- · # of Children
Some Psychographic factors include:
- · Personality
- · Attitudes
- · Values
- · Interests/hobbies
- · Lifestyle
- · Behaviour
According to Lynda Falkenstein, the author of “Nichecraft: Using Your Specialness to Focus Your Business, Corner Your Market and Make Customers Seek you out”. Creating a good niche is a seven step process.
1- Make a Wishlist- This involve taking a look at with whom you want to do business and try being as specific as possible.
2- Focus- You need to clarify exactly what you will like to sell, you should already have identified this from part 2 of this series.
3- Describe your customer worldview- Look at the world from your customers view point and try to determine their needs and wants
4- Synthesize- Your niche should start taking shape by now
a. It takes you where you want to go
b. Somebody else want it
c. Its carefully planned
d. Its unique
e. It allows you to develop different profit centres and maintain the core business
5- Evaluate- evaluate your product or service against the qualities in 4 above
6- Test- This happens once you have found a match between a niche and a product, test market it
7- Go for it- Now it’s time to go hard or go home, it’s time to implement your idea
Identifying your target market is of utmost importance because it allows you to build a solid foundation for your business. And as a small business, it becomes easier to compete with the larger companies if you go after a niche market. All this does not mean however that if someone who isn’t part of your target market comes to buy, you will not sell. You will, however, you will direct all your marketing and promotional effort to a particular type of people.
Having a target market is crucial, ensure that you identify clearly who your target market is, and follow the steps above and comment below if you believe anything is missing or you wish to add to this post.