One of the most powerful tools of small business marketing strategy is defining and addressing your target market—the audience that you think is most likely to buy your product or service. The key to identifying this customer base is market segmentation, or figuring out the demographics of your specific market.
Common sense makes it seem obvious from afar. You can’t (and shouldn’t) try to sell your product to everyone in the world. You’d waste a lot of money and resources very quickly.
But how do you figure out who your target audience is? Who or what should it be? How would you know? Here are five tips to help you figure it out.
1. Don’t try to please everybody
The strategy is focus. Say you’re planning to start a restaurant; which of these three options is easier?
Pleasing customers 40 to 75 years old, wealthy, much more concerned with healthy eating than cheap eating, appreciating seafood and poultry, liking a quiet atmosphere.
Pleasing customers 15 to 30 years old, with limited budgets, who like a loud place with low prices and fast food.
This is the essence of target marketing—divide and conquer. Different groups of people have different pain points and different desires. Most of the time, efforts to please everyone end up pleasing no one.
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It’s about segments, like pie segments or orange segments—except that in this case, it’s segments of a total market or TAM.
In the “divide and conquer” example above in the first point, the specific age ranges, wealth, and atmosphere preferences describe particular market segments.
In the illustration here below, U.S. census data divides the population into demographic segments. Demographics are the old standards like age, gender, and so on.
You’ve seen market segmentations referred to frequently in business articles, interviews, and discussions. People will appeal to certain age groups, genders, income levels, and so forth. Divide and conquer is a simple concept; market segmentation is how you make it practical for your business.
Let’s say you think your target market is age 40 to 75 years old, wealthy, and interested in healthy eating. How do you validate your assumption that that demographic will be your ideal target customers? That’s where market research comes it. Talking to customers and potential customers is one of the best ways to do this kind of research, but there are many approaches.
3. Use segmentation creatively
Don’t limit your target market strategy for market segmentation by age, gender, and economic level.
For example, when I was consulting for Apple Computer, we divided the market into user groups:
I also liked a shopping center segmentation that divided its market into so-called psychographic market segmentation:
Kids and cul-de-sacs were affluent upscale suburban families, “a noisy medley of bikes, dogs, carpools, rock music, and sports.”
Winner’s circle were wealthy suburban executives, “well-educated, mobile executives and professionals with teen-aged families. Big producers, prolific spenders, and global travelers.”
Gen X and babies were upper-middle income, young, white-collar suburbanites.
Country squires were wealthy elite ex-urbanites, “where the wealthy have escaped urban stress to live in rustic luxury. Affluence, big bucks in the boondocks.”
I knew a business that segmented its business customers into decision-process types as well:
Decision by committee
Decision by functional manager
Decision by owner
And I call this final example, for lack of a formal definition, strategic intersection.
In the diagram here, the social media services that Have Presence offers are targeted to small business owners who:
Want outside help with their social media; and
Value business social media; and
Have a budget to pay for the service.
Any of these creative segmentations can help you set a target market, and can also be a jumping off point for putting together a user or buyer persona—another useful tool for understanding your target audience and developing better marketing messaging. buy a business in delhi buy a business in gujarat buy a business in kolkata buy a business in bangalore buy a business in ahmedabad buy a business in pune sell my business in mumbai sell my business in delhi sell my business in gujarat sell my business in kolkata sell my business in bangalore sell my business in ahmedabad sell my business in pune businesses to buy in mumbai