Who could or should buy this? That’s one of the biggest decisions a
business makes when contemplating something new — a new product, a new branch,
a new business. In other words, for
which what target market is this designed?
Approach it by asking these
questions:
* How do I describe those who are most likely
to need/want what I have?
* Who needs or wants what I have?
* Who can pay for it?
* Are there enough of them to make it worth my time?
Target market is a term that
describes a group of suspects and prospects who meet the criteria contained in
the questions above, and have something in common. When referring to individual consumers, that thing in common
could be demographics, like “men between the ages of 30 – 50.” Or, it could be psychographics, like “enjoy
spending time with others;” or socio-economic level, like “earns between
$70,000 and $90,000 annually;” or geography, as in “Iives in telephone area
code 940”
The process works for B2B marketing
as well. A target markets can be defined
as “Manufactures with 300 -500 employees, who are eager for growth, and have
headquarters in the state of Florida,” for example.
Regardless of the general class of
prospects – consumers or B2B — there are two principles that impact the
quality of these decisions:
1. The more precisely you define your
target market, the easier it is to market to it.
2.
There are layers of suitability for your definition of target markets.
Let’s look at each.
1. The more precisely you define your target
market, the easier it is to market to it.
Let’s say that you are a mechanic
with an auto repair shop. You could say your market is “Anyone who owns a car
that needs repair or maintenance.”
You could break that down into more
precise, narrower market segments. For example, you could define your market as
“owners of Ford products,” That describes
a market which is smaller and more precise than the first description.
Even better would be to narrow that
down even more, say something like “Anyone owning a Ford pick-up truck needing
repair or maintenance.” And, to narrow
it even further, you could narrow it down to “anyone owning a Ford pick-up
truck which was manufactured in the last 10 years, needing repair or
maintenance.”
Let’s keep going: You could then use the type of repairs as one
of the criteria to narrow your market.
For example, you could say “Anyone owning a Ford pickup truck which was manufactured
in the last 10 years, needing mechanical (as opposed to body) repairs or
maintenance.” Or, to narrow it even further, you could say, “Anyone owning a
Ford pickup truck which was manufacturer in the last 10 years, needing
transmission repairs or maintenance.”
Each time you narrow the definition
of your market segment, you sharpen your market focus and make it much easier
and more effective to reach them. Here’s why:
1.Narrowly defining your target
market allows you to distinguish yourself from your competitors.
For example, if you fix just any car
or truck, you have put yourself in the same class as your competitors. You are
just one of many. But, by specializing in a narrow segment, you stand out to
the folks in that segment. Since you are seen as a specialist, you appear to
offer more value to the market. Why take
your Ford pickup into just anyone, for example, when you can take it to a
specialist?
2. Narrowly defining your target
market allows you to leverage your marketing efforts and thereby be more
effective and efficient.
For example, there are probably websites
devoted to Ford pickup owners. Since you are a specialist in something that
interests them, you have synergy. You can
leverage your investment to a greater return.
A few dollars spent in advertising on those websites will get a greater
return. You could probably buy a list of
Ford pickup owners in your area. There may be companies who use nothing but
Ford pick-ups. There may be a magazine for them. There could be a Ford Pickup
owners club. Money spent in advertising
to a broad market is often diluted and ineffective. Money spent advertising to
a narrow market is more effective.
3. Narrowly defining your target market
allows you to become more important to your market by expanding your product or
service offerings.
Once you have a customer, you simply
ask “What else would this person want or need?” Let the answer to that question
lead you to complimentary products or services. You could, for example, offer a
line of decals and add-ons to customize the looks of a pickup truck.
The limitation is the size of the
market. There must be enough of them to
make it worthwhile,. So, every time you
narrow the definition of your market, you ask the question, “Is there enough of
them to make this market viable?”
So, for example, if there are 20
owners of 10-year old Ford pickups with transmission problems, you probably are
not going to be able to make a living.
If there are 2,000 you will.
But wait. It is a little more nuanced
than that. Let’s revisit our second point:
2. There are layers of suitability for your
definition of target markets.
For this, let’s use an illustration
of a dart board. You know that the
bullseye at the center of the dart board is the ideal landing area for your
darts. You score more points when you
hit the bullseye.
But, if you are one or two layers out
from the bullseye, you still score some points. Think of the dart target as
representing your efforts to define your target markets. You have created a narrow definition of the target
market. That’s like defining the bullseye. As long as every marketing effort
lands in the bullseye, you’ll be fine. But not all will. So let’s create a
couple of rings out from the bullseye.
We do that by loosening up our definition.
So, for the ring closet to the
bullseye, let’s say, “Owners of any Ford Pickup truck with transmission
problems.” You’ve loosened up the
“10-yers old” criteria and opened up the ring a bit.
Let’s do one more layer. “Owners of Ford Pickups or Large SUVs….” That’s a larger ring and contains more
people.
So now, we have three rings in our
target.
The bullseye = “Anyone owning a Ford
pickup truck which was manufactured in the last 10 years, needing transmission
repairs or maintenance.”
The first ring = “Anyone owning a
Ford pickup truck needing transmission repairs or maintenance.”
The second ring = “Anyone owning a
Ford pickup truck or large SUV, needing transmission repairs or maintenance.”
Now, you have developed a workable,
practical definition of your target market.
This will guide your marketing decisions and enable you to be more
effective.
One more step.
You’ll find it useful to describe the space
outside the dartboard, where your darts score no points. In other words, how
would you describe those who you will not serve? Taking a few minutes to think
about it and put it into words will save you lots of time in the future.
This work of thinking deeply about
your target markets and reducing those thoughts on paper will be one of the
most powerful and fundamental thinking projects, preparing the infrastructure
for building an effective sales system.
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