The Importance of Target Market Selection For Your Small-Business.
Posted on September 28, 2010 by Nathan R Mitchell, One of Thousands of Business Coaches on Noomii.
Clutch Consulting LLC, Tulsa, OK: Small-Business Consulting: The Importance of Target-Market Selection and Positioning For Your Small-Business
Although you would think it would be the first thing considered when starting a new business, it usually is not. I am talking about new business owners and entrepreneurs deciding who their customers are and how they will reach and appeal to them. In order for a new business to succeed, this important question must be addressed carefully. Unfortunately, too many small-business owners don’t think about this at all, or they think too big in scope when it comes to identifying their potential customer-base. Think too big? I know what you are thinking. This is contrary to everything you have ever read about being successful in business and life. We are taught to be big thinkers, set crazy goals that would literally blow our minds if we achieved them. And please, don’t give up on these things, but for the purpose of this article, I want you to narrow your vision just a little bit. It will all make sense. I promise.
A well-managed startup should utilize a three-step approach to address this issue of 1) Who are our customers(?), and 2) How are we going to reach and appeal to them(?) The three steps are:
Selection Of A Niche Within A Target-Market
The first step in selecting a target market is to conduct an industry analysis of the industry in which your business operates, and determine the potential customers in that industry. This is important, especially if you are a relatively new company, since you may have limited resources, allowing you to effectively target only one market initially.
Selecting A Market Niche:
Once the primary market segment has been identified, it is now necessary to identify the smaller markets within the primary market segment. This is the process of identifying a “niche-market.” A niche market is a narrower group of customers within the primary market segment with similar interests. Typically, customers within the niche market have needs that smaller firms can meet and serve better and more efficiently than if they were to attempt to target a whole market segment in its entirety. Small-businesses do not target an entire market segment for a few reasons:
It’s hard for small-businesses to compete with the “Big Dogs” in the game.
If the market segment is too large, small-businesses cannot target it effectively or successfully.
When a small business focuses on a niche market, the business can establish itself as an expert, and therefore be able to provide its customers with high levels of value and service.
Once a niche market is clearly identified, the next step is “Positioning” the business in such a way that it is differentiated from its competitors. There is a lot that goes into positioning, including marketing and branding. We will not discuss these topics here, but it is very important for the small-business to have a concrete idea of how they want the company to be perceived by its customers. One way a small-business can do this is to develop a company slogan. Here are some popular examples:
Nike: Just Do It
Nokia: Connecting People
Subway: Eat Fresh
McDonalds: I’m Lovin’ It
In conclusion, there is a wealth of information available on effectively identifying a niche market, as well as the art of positioning a small business within an industry. It is highly recommended that Entrepreneurs and Small-Business owners seek out additional information on these concepts.
For more information on services offered by Clutch Consulting, LLC Tulsa, Oklahoma email Nathan Mitchell at firstname.lastname@example.org