When it comes to defining your target market, the world is not your oyster. As a business owner it’s tempting to define your target market in general terms. You want everyone to partake of your goods and services. But, unfortunately, from a marketing perspective, no business has the money or other resources to reach the entire marketplace effectively.
Your task is to decide and prioritize that segment of the market you want to target so that you can maximize the effectiveness of your marketing dollars. Your target market can be determined by the following two general criteria:
Demographics. This is data that refers to selected population characteristics such as age, gender, race, education and income level. It can also include their marital & employment status, whether they have children, as well as specific information, such as whether they own a computer or how often they travel on business, etc.
Psychographics. This is data classifying population groups according to psychological variables, or IAO variables (Interests, Attitudes and Opinions)– emotional and ideological beliefs. These are attributes relating to their personality, values, fears and lifestyle. Examples of words used to describe a market psychographically include feminist, macho, risk taker, value-for-money oriented, saver, etc.
Having a defined target market doesn’t mean that your product or services won’t have cross-over appeal to people outside of your target market. This will always be the case. For example, there are wealthy people who shop at Wal-Mart, but the company’s marketing dollars are not targeted toward this group because it doesn’t represent its core segment of bargain shoppers. Of course, the Wal-Mart brand (which is another subject) has long been established as a community fixture.
Get rid of the notion that you are somehow ‘missing out’ on sales opportunities by not pitching a big tent. Assuming that ‘everyone’ will purchase your goods and services will lead you to make wrong decisions about pricing and marketing strategy, which can ultimately cause your business to fail. Do your market research. You will find that there is more than enough business within your niche market. Using the criteria above determine, as closely as possible, exactly who those people are and target your resources toward them.
Based on your results, you might decide to expand your target market to include another age group, etc. But make sure your logic is based upon the set criteria and not simply your bottom line. Let your determinations be based on facts, not fear. Remember, there was a market for mood rings and pet rocks, so surely there’s a market for your products and services. Your job is to identify it and build a strong business around it.
Rebecca McClain is a certified life and business coach. She is the founder and CEO of Life Treasures, LLC. As an entrepreneur, author, speaker and coach she is recognized as an expert in personal and professional success and fulfillment. Visit her website to receive a free .pdf of “Ten secrets you must adopt if you expect to see your dream fulfilled.”