Get your message to the people who need and want what you have to offer! This guide takes you through a step-by-step process that helps you identify specific target markets within your industry and provides you with the know-how to create customer profiles to better channel your marketing effortsL Show WHAT TO EXPECT This Business Builder will take you through a step-by-step process that will help you identify specific target markets within your industry and provide you with the know-how to create a customer profile. WHAT YOU SHOULD KNOW BEFORE GETTING STARTED [top] In order to market your product or service, it is imperative that you tailor your marketing and sales efforts to specifically reach the segment of population that will most likely buy your product or service. It is critical that you first determine or clearly identify your primary market. Your energies and funds then can be spent more efficiently. If you don’t know who your customers are, how will you be able to assess whether you are meeting their needs? Since success depends on your being able to meet customers’ needs and desires, you must know who your customers are, what they want, where they live and what they can afford. We’ve all heard a business owner say, "My product is terrific! It appeals to everyone." Many of us have also seen small businesses that try to be all things to all people. This is a difficult, if not impossible, bridge to cross. Targeting your market is simply defining who your primary customer will be. The market should be measurable, sufficiently large and reachable.
Once your target market is defined through your knowledge of product appeals and market analysis, and can be measured, you should determine whether that target market is large enough to sustain your business on an ongoing basis. In addition, your target market needs to be reachable. There must be ways of talking to your target audience. Types of Markets A market is simply any group of actual or potential buyers of a product. There are three major types of markets.
IDENTIFYING YOUR MARKET [top] Here are three steps to follow when identifying your market:
Step One — Identify Why A Customer Would Want To Buy Your Product/Service The first step in identifying your target market is understanding what your products/services have to offer to a group of people or businesses. To do this, identify your product or service’s features and benefits. A feature is a characteristic of a product/service that automatically comes with it.
While features are valuable and can certainly enhance your product, benefits motivate people to buy.
By knowing what your product/service has to offer and what will make customers buy, you can begin to identify common characteristics of your potential market.
In one column, list the features of your product/service. In the other, list the benefits each feature yields to the buyer.
Step Two: Segment Your Overall Market It is a natural instinct to want to target as many people and groups as possible. However, by doing this your promotional strategy will never talk specifically to any one group, and you will most likely turn many potential customers off. Your promotional budget will be much more cost effective if you promote to one type of customer and speak directly to them. This allows you to create a highly focused campaign that will directly meet the needs and desires of a specific group. Again, this is called market segmentation.
Market segmentation is the process of breaking down a larger target market into smaller segments with specific characteristics. Each group requires different promotional strategies and marketing mixes because each group has different wants and needs. Segmentation will help you customize a product/service or other parts of a marketing mix, such as advertising, to reach and meet the specific needs of a narrowly defined customer group.
Another example of market segmentation is the athletic shoe industry. Major manufactures of athletic shoes have several segmented markets. One segment is based on gender and the other segment is based on the type of sport or activity. They have different promotional campaigns for each market segment. Larger markets are most typically divided into smaller target market segments on the basis of geographic, demographic, psychographic and behavioristic characteristics:
Most businesses use a combination of the above to segment their markets. Demographic and geographic criteria will usually qualify your target markets so you can establish if segment members have enough money to purchase your offering or if they’re in a location that’s accessible to the product. Most businesses then use the psychographic and behavioristic factors to construct a promotional campaign that will appeal to the target market.
Take a moment to decide which segmentation criteria will be most helpful to you in segmenting your target market:
Next, identify what is important to your customers and rank these on a scale of high, medium, low or not at all. Are they price sensitive? Are they looking for the highest quality? Is great customer service important? Or, is location a deciding factor?
Step Three: Research Your Market Some or all these reference tools can be found in the reference collection of any public library or college library that supports local business or a business school: Federal Government Data: A great deal of demographic data is either free or inexpensive because it is collected and published by the federal government. The following publications are from the Commerce Department and Census Bureau.
Commercial Sources of Demographic Statistics: Online databases and CD-ROM products have made it much easier than it used to be to sift through the mountains of information created by the Census Bureau and other gatherers of statistics. For a complete listing of demographic and other databases, consult the Gale Directory of Databases (available at most large libraries). The following sample of databases is available through database vendors such as Dialog. You can also use online search engines such as Yahoo! and Google to find database compilers and other vendors.
Demographic Publications:
Demographic, Psychographic and Behavioristic: The primary vehicles to obtain this information are surveys and focus groups. Surveys are typically anonymous and try to reach as many members of a target market as possible. Focus groups, on the other hand, attempt to get an understanding of a specific market segment by questioning eight to 12 members of that group to discover what psychographic and behavioristic factors might motivate the entire group. You should consider hiring a marketing research firm, since executing both questionnaires and focus groups can be complex undertakings. If hiring a marketing research firm is out of the question for your business at this time, here are some suggestions for conducting your own survey research:
For Example: Career Options might go to the state unemployment office and conduct a survey, or visit a local college and conduct a survey among college seniors. SAMPLE OF A CUSTOMER PROFILE AND ANALYSIS [top] Career Option’s Sample Customer Profile:Professionals in Transition Segment
Having completed the customer profile, Career Options will have a good idea of how to attract and serve customers in this target market. Their advertising will emphasize that Career Options specializes in helping professionals find good paying jobs quickly. They will also discover that most of their potential customers in this segment are seeking employment in technical industries. Advertising in various local industry publications would therefore be a good way to reach this market segment. They can also develop an expertise for counseling and placing hi-tech career professionals. Constructing a similar profile will assist you in developing the proper marketing strategies to be successful in your target market. Remember, no two customer profiles will be the same. You’ll have to decide how much emphasis to place on a potential user’s lifestyle, loyalty, and spending habits. If you’re going to advertise heavily, you’ll want to know the media habits of potential customers as well. Whatever information will help you better promote and sell your product should be included in your customer profile. CHOOSE THE SEGMENTED TARGET MARKET(S) YOU WILL SELL TO [top] After identifying and defining the possible segments within your target market, you must face the critical question of whether it would be profitable and feasible for you to pursue each identified segment, or choose one or two. To make this decision, you must answer the following questions:
Important Considerations:
The marketing mixes for multi-segment strategy may vary by product feature, price, promotional material and distribution methods. If product variations requires additional work, you may incur higher production costs. Additionally, different promotional plans and distribution efforts will result in higher marketing costs. Plan carefully, to make sure the costs don’t outweigh the benefits. Now think about all the characteristics you have identified and start formulating the promotional campaign that will best address this specific target market. Start to formulate a picture or description of your ideal customer. Make sure everything you do, from design, price to marketing, addresses your market. CHECKLIST [top] Identifying Your Market ___ Determine why a customer would want to buy your product/service. ___ Identify your products’/services’ benefits and features. ___ Decide which segmentation criteria will best segment your target market: geographic, demographic, psychographic or behavioral. ___ Segment your market. ___ Divide larger target market segments into smaller segments. ___ Decide if it would be profitable and feasible for you to pursue each segment. RESOURCES [top] Books The Successful Business Plan: Secrets & Strategies by Rhonda Abrams and Eugene Kleiner. (Running R Media, 2000). The Marketing Plan: How to Prepare and Implement It, 3rd ed. by William M. Luther. (AMACOM, 2001). Developing a Creative and Innovative Integrated Marketing Communications Plan: A Working Model by James R. Ogden. (Prentice Hall College Div., 1998). Web Sites "Sales and Marketing: Researching Your Market," by Laura Tiffany. Entrepreneur.com, 2001. "Getting the Dirt on Your Market," by Rhonda Abrams. RhondaOnline.com, February 2002. "Hitting Them Where They Live," by Kate Maddox. BtoB (September 15, 2003). "How to Identify, Target Your Best Customers," by Rebecca Bell Ellis. BtoB (May 5, 2003). "Slices of Lives," by Meredith Levinson. CIO 13:21 (August 15, 2000), 126 (4). “Mapping the Growth of Older America: Seniors and Boomers in the Early 21st Century” by William H. Frey. The Brookings Institution, Living Cities Census Series. May 2007. About the writer — Susan MaGee, formerly Publicity and Book Club Sales Director for Running Press Book Publishers, now operates her own Philadelphia-based business specializing in public relations and business writing. All rights reserved. The text of this publication, or any part thereof, may not be reproduced in any manner whatsoever without written permission from the publisher. How can it be described to satisfy all the customers demands by a product which is determined as per the customer need?The Answer is Demand Planning.
How can you satisfy your customers needs?10 Ways to Meet and Satisfy Your Customer's Needs. Understand Your Customer's Needs.. Listen to their Feedbacks.. Set Realistic Expectations.. Pay Attention to Your Competitors.. Be Consistent in Communicating with Your Customers.. Take User Experience as a Priority . Foster Loyalty through Proactive Customer Relations.. What ability of the product is needed to satisfy a customer?the ability of a product to satisfy human wants and needs.
How do you determine what customers want and need?The best way to identify their needs is to take an organized approach. Some refer to this as a customer needs analysis, which provides you with valuable insights about your target audience. Common methods for discovering what customers want include focus groups, social listening, and keyword research.
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