Finding Your Target Market

Finding Your Target Market

Some might believe developing a product or service is the hardest step in the startup process.  However, introducing said product or service into the market requires even more work. It is quite simple to develop a general marketing strategy, but much more time and resources must be devoted to finding targeted markets which could maximize a company’s return on investment.  There are a few steps that must be taken to achieve this goal:

  • Sharpen Your Focus

This step revolves primarily around what efforts startup members should prioritize. The first way to accomplish this goal is to determine what needs the product or service fulfills.  Who is most likely to use your product?  In the answer to this question, factors like age, buying power, geographical location, and marital status should be considered.

Secondly, new businesses should employ a funnel approach.  In most cases it is easier to analyze a marketing approach as a multiple staged funnel.  For example, the first bucket could be gender. If the product is gender-specific, the potential client base is immediately narrowed.  The second stage might be age range. If the startup produces surfboards for example, a younger consumer base should be targeted. The third filter could be income level.  For example, a family that purchases a Seat, most likely occupies a different income bracket than a family that purchases a Mercedes Benz.

The third step in order to prioritize the correct efforts is to emphasize primary value propositions.  It is important to discover which consumer will best align with the values of the good or service.  For example, if the business produces a baby stroller that is easy to fold into a portable shape, parents who travel frequently would most likely be the individuals who value that specific stroller the most.  For any product or service a business creates, it is important to outline its core values and then trace those values to key demographic groups which would prioritize them.

  • Obtain Data

Targeting the correct market also involves conducting efficient research in order to make decisive conclusions.  There are three steps to ensure the collection of resourceful data. First, survey data should be collected to identify potential markets. Collecting metrics is a great way to locate specific demographic groups.  These surveys can be conducted in multiple ways, whether it be in person, via email, or postings in a newsletter. Either way, it is imperative that demographic data is collected to give companies the ability to correlate positive responses with their product or service.

Second, startups should draw on existing dataaggressively.  If the enterprise offers a product or service similar to one already provided, the team should conduct extensive research on the performance of those alternatives.  What demographic groups are buying these products? When do they buy them? Which specific products in the entire lineup are most popular? There is a great magnitude of information that can be found online regarding the information of customers who are purchasing similar products. Market researchis critical to understand a potential customer base and determine whether or not the business will be successful.

Third, the members of the startup team must look at theirown network for data.  It is important to tap into local network sources such as business colleagues, funders, and mentors.  They should be asked to carefully examine the product or service provided by the company. These new sources of information could actually find surprise target markets that the members of the company did not think were possible.

The end goal of these two steps is to draw connections between the needs of certain demographic groups and the product or service provided by the company.  Once these connections have been established the marketing strategy will be much more defined and a greater return on investment can be achieved.

Source

Cohn, C. (2015, February 06). Steps To Identify Your Target Market. Retrieved June 17, 2019,

From https://www.forbes.com/sites/chuckcohn/2015/02/06/steps-to-identify-your-target-market/#52078463229d

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