I welcome all small business owners (and would-be entrepreneurs) to my new series of posts under the category SMALL BUSINESS BOARD. I am publishing here interesting business tips, contents, materials, and links you may find useful in planning, managing, and expanding your business.
What is a target market?
A target market is a specific group of end-users or consumers, whom you believe will need your product/service, and to whom you will direct all your marketing activities.
How do you define your target market?
1) Analyze your product/service. What are its features? What benefits are derived from its features or from using your product/service? Identify the people who will likely need those benefits.
2) Group together these people according to the following criteria:
- Gender, age, household size, location, occupation, income, education
- Personality, attitudes, values, lifestyle, interests, hobbies
- Or some other criteria like behavior or common needs
Now you have a target market. But look again.
What is the estimated number of potential buyers in your target market? Is it big enough to make your business viable?
Will your prospective buyers really need your product/service? What will motivate them to use your product/service?
How much are they willing to pay for your product/service?
How do you reach your target market?
You can only answer the above questions if you do a market research. Make a survey of your potential users/consumers. Try doing some face-to-face interviews.
If the responses you get are favorable and point toward a viable business, then you have clearly defined a solid target market.
How important is it to have a clearly defined target market?
A clear target market will enable you to focus.
You can concentrate your limited resources and marketing efforts at a well-defined target market. This makes your small business more cost-effective as you avoid wasting time, money, and effort.
You can then create and develop your own niche market which is not served or underserved by your competitors. Eventually, you can adapt your product features to more specific needs and wants of your target market. You can successfully compete with bigger businesses by targeting a niche market.
You may contact me for any problem or concern about starting or improving your business. I will respond to you (free-of-charge, of course) the best way I can as a management consultant dedicated to helping small businesses.