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How to find your target market

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One of the first questions that new business owners must ask themselves is "Who are your customers? Who will buy your product?" It can be a crucial mistake when otherwise savvy small business people either have no idea who will buy from them, or they assume that "everyone" will. Making these types of assumptions can lead to wrong decisions, wrong pricing, wrong marketing strategy and ultimately, business failure. The most successful small business owners understand that only a limited number of people will buy their product or service. The task for them becomes determining, as closely as possible, exactly who their target market is and then "targeting" the business's marketing efforts and dollars toward them. If you are a new business owner you can build a better, stronger business, by identifying and serving a particular customer group who is your target market. Here is what you need to know about how to find your target market:

  • Refine your product or service.Business owners with a new product or service need to streamline and not try to be everything to everyone.Every product or service has a defined target market that is specific to it.Once you find it then you can be much more successful than trying to be everything to everyone with no one really interested in what you are doing.
  • Know why people purchase.There are basically three reasons why people purchase products or services:
    1. To satisfy one of their basic needs.
    2. To solve a problem they have.
    3. To make themselves feel good in some way.
  • In order to be successful with your product or service you will need to determine which of those categories your product or service is the solution to, and be prepared to market it accordingly. Be aware that your product or service may fit more than one category, too.
  • Refine who your target market really is.With the information of what your product or service really is and why potential customers will want it you can then zero in on who your target market really is. One of the best ways to determine this target market is to use the Market Segmentation analysis. This involves asking a number of directed questions that will lead you to your target market.Some of these questions are-
    1. Is your product international or national in scope? Or is it more likely that you will sell your product or service primarily in your own region or community?
    2. What are the demographics of your target market?You must consider: age, gender, education, income and even marital status to give you a complete picture of your target market. Further considerations of your target market's demographics can include ethnic or religious background and family life cycle. Information like this can be available through market research and public records.Keep in mind that the more details you get right the better.
    3. You can then segment the market as much as possible using "psychographics" as your guide.Identify your potential target markets lifestyle, social class, opinion, activities and interests, attitudes and beliefs.All of these factors can influence who your target market is and how they will buy from you.
    4. To finalize who your target market will be you may want to find out how they purchase: seasonally, locally, only in volume and who makes the decisions?

Once you have determined who your target market is then you can move on to create a marketing plan that caters strictly to your target market.It is at this point that if you find less than profitable revenues available from your intended target market you can then go back and re-examine your data for a better defined target market.

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