More often than not, otherwise savvy small business owners either have no idea who will buy from them, or they simply assume that ‘everyone’ will. Assumptions like this can lead to the wrong decisions, wrong pricing, wrong marketing strategy – and potential business failure. In order to build a stronger and more profitable business you need to be able to identify your target market by determining exactly who the people buying from you will be.
People purchase products or services for three basic reasons:
To satisfy basic needs
To solve problems
To make themselves feel good
You’ll need to determine which of those categories (there may be more than one) your product or service is the solution to, and be prepared to market it accordingly. Remember, you can’t be everything to everyone, so refine your products or services and become a specialist in your niche area!
The best way to market to your target market is through Market Segmentation. This includes determining geographically who you will be selling to – will you sell Internationally, Nationally or Locally? Once you have determined this you will then need to research the ‘demographics’ of the population in the region you are targeting, such as:
- Age: children, teens, young, middle, elderly
- Gender: male, female
- Education: high school, college, university
- Income: low, medium, high
- Marital status: single, married, divorced
- Ethnic and/or religious background
- Family life cycle: newly married, married for 10 – 20 years, with or without children.
This information should be available to you through your local town hall, library or Chamber of Commerce – and the more detail you can get, the better.
Next, you need to segment the market further using ‘psychographics’ as your guide:
- Lifestyle: conservative, exciting, trendy, economical
- Social class: lower, middle, upper
- Opinion: easily led or opinionated
- Activities and interests: sports, physical fitness, shopping, books
- Attitudes and beliefs: environmentalist, security conscious
If you are targeting businesses you’ll also need to consider the types of industries available to you and details such as number of employees, annual sales volume, and company stability. In addition, you might want to find out how they purchase: seasonally, locally, only in volume and who makes the decisions? It is important to note that businesses, unlike individuals, buy products or services for three reasons only:
To increase revenue
To maintain the status quo or
To decrease expenses
If you fill one or more of these corporate needs, you may have found a target market. Often prospective customers don’t know about your company, or can’t tell the difference between your company and others. It is your job, once you know who your best customers are, to ‘target’ the group that you’ve identified – even if you have competition.
If you’d like to identify your target market or for any other marketing advice and services contact Deborah from Clarity Marketing on 0411 139 881 or email [email protected]