You may think that your product or service could solve a problem everyone encounters, but in reality, it will probably only suit a small proportion of the market. Trying to appeal to everyone is impossible. Instead, try identifying a niche market for your products. You will find much easier focusing your efforts on a small distinct part of the market. Becoming the leader of a niche market can not only be very rewarding, it can also help your business get established and recognised. Once this has been achieved, you could much more easily try to expand your business and gain wider market shares. Understanding your target market is a simple two steps process.
Segmenting your market will help understand who your customers are and what their buying habits are. The following categories will help you characterise your segments:
Location - Where the product will be used or purchased
Demographics - Age, gender, education level
Psychographics - Personality types (i.e. risk taker, show off…)
Hobbies, activities, lifestyle in general
Life stage - At what moment in their life (i.e. Mum to be, teenager…)
Segment size – Is it large enough to sustain the business? Is there room for expansion?
Reachability - Easy to reach? Easy to communicate to?
Competition - Is there much competition? Could competition quickly target this segment?
Once you’ve gathered all this information along with your own potential sales data, you should have a much clearer picture of your target market. This should enable you to work out whether your product or business idea is a viable one or not. If your analysis makes your business idea a good one, we wish you the very best of luck in your new venture!