7 Steps to Defining Your Target Market
by Summer Alexander on May 16,2012
While working with new business owners I have noticed a common theme. Many owners are launching businesses based on what they feel are good ideas and then sitting back waiting for the customers to come pouring in.
It’s definitely not an ideal business model and although it may work in rare instances, there is a better way of getting your products or services in front of potential buyers. Identify your target market so that you can create a custom marketing message.
This will allow you to spend your advertising dollars wisely by only marketing where your potential customers are looking. Defining your target market (your ideal customers) should be one of the first steps taken by every new business owner.
I recommend narrowing down your market as much as possible without making it so small that you have no chance at being profitable.
So let’s say for example you are a clothing designer and you want to introduce a new pair of denim jeans into the market.
- Identify all of the potential customers for your jeans – Men, Women, Teens, Children, Infants
- Narrow it down to 1-2 groups. - Women
- Think about the jeans you most enjoying designing, identify a subgroup and note problems with jeans currently being designed for that group. I enjoy designing fashionable jeans for women. One problem is that jeans designed for women who are pregnant are often unfashionable and those that are fashionable are usually unaffordable for many women.
- Gather your demographics – identify the age group, location, education, income and marital status. Single first time mothers between 20 – 25 years old, have attended some college, are renters, earning $25,000/yr. and live in Chicago.
- Quantify your demographic – access U.S. Census Bureau data to determine an approximate number of these potential customers.
- Identify the psychographics of your market. Psychographics are the lifestyle traits, personality, attitudes, behaviors and values of your target demographic. Heavy Internet users who are comfortable shopping online and are impulse buyers. Value quality goods at affordable prices.
- Assess your final customer profile. Make sure the number is large enough to sustain your business but no so large that it would cost a small fortune to reach them. Also remember you can have more than one target market just make sure not to spread your marketing message too thin.
Once you have determined your ideal customer the fun really begins. Next you must research the market to find out where your ideal clients are currently purchasing similar products/services. Read the Top 3 Reasons You Must Research Your Competition.
Feeling overwhelmed? No worries, check out the New Business Jump Start Solution.