One of the most important tasks when setting up your business is identifying your target market. If you’re just beginning to form ideas and you’re not sure what route you’re going to take, having a target market can give you some direction. On the other hand, if you already have a product or service in mind, you need to know who will want to buy it so that you can market to those people effectively.
What if my product appeals to everybody?
Your products will not appeal to everybody all the time, and if you’re trying to target the entire population with your product, you won’t have much direction and could find yourself floundering. For example, let’s say you want to start a business selling beds. Everyone needs a bed, but not everyone is going to want the same one. Will you be selling children’s beds, bunk beds, water beds, adjustable electric beds, cheap beds, expensive beds, beds with a flat screen TV that rises out of the foot-end? Once you start to get specific, you can target people with children, people with mobility problems, people who want to splash a lot of cash on a bed that lasts them many years, or people looking for a bargain. Specific targeting such as this makes marketing more straightforward and can give you a bigger return.
This isn’t to say that you should only sell one type of bed. Once you have defined your target market you can start to understand what they look for in a product and what problems they need solving and create a mission statement, goals, and a clear strategy based around this. You can then think about products that will solve problems for your target market, and consider which fit best. If you thought about your target market first you may already have a lot of this figured out already, but if you had the idea for the product and are now thinking about who may like it, you may find yourself working backwards slightly as you make sure your product, market, and goals are all in alignment.
Gathering data and creating personas
You may find it useful to write up some personas. Whether you’ve decided on a market segment or you still think your product could appeal to everyone, ask yourself who your ideal customer is. Consider what their demographics are, what they want from your product, what their priorities are, and so on. Existing businesses will be able to do this by gathering data on current customers, while new businesses will have less to work with and may need to do a lot of research. Either way, it can be a time-consuming process, but one that could be valuable and help you to market your company to your target audience.
If you already have some existing customers, you can consider who has bought from you before, who is a returning customer, and who has been most profitable or referred other customers to you. Find out who these people are and if they are male, female, married, single, educated, where they live, what their profession is, and so on. This data can help you to target other similar people who could be potential new customers.
What is everyone else doing?
Who are your competitors targeting – or a better question may be, who are they not targeting? Is there a niche market you could tap into that’s currently being overlooked?
What is your expertise?
Any expertise within your company can help you decide who to target. For example, do you have a lot of experience working in a specific location, with a specific demographic, or with people in a certain profession? Going back to our bed example, if you are well-acquainted with the needs of the elderly thanks to many years of working with this age group, you may decide to use your experience to sell electric adjustable beds that are easier to get into or more comfortable for those with mobility problems.
As well as your expertise, you may be able to offer other benefits that would appeal to a particular market, such as long opening hours or free delivery.
By targeting a specific market segment you are setting yourself up to become an expert in that particular field, and you could become a well-known, established business specialising in your chosen product. When people within your market need to buy something new, where better to go than to the business that specialises in solving their problem? Once your branding, marketing campaigns, and business strategy are aligned with your target market, you will benefit from this new-found synergy and direction, and everything can start falling into place.
If you’re a little iffy on the details of your new business and its target market, writing a business plan can help you to gain a clear vision of your product, who is going to buy it, and the direction you want your business to take. That’s where cbm comes in – we can help you write a great business plan that outlines all the details of your target market, your product, goals, finances, and more to make sure you get in front of the right people and fulfill all your business goals. Contact us to find out how we can help.