Defining a market
Growing a business can be a challenging task whether the company is a small company or a well established company. One way to grow a company is to focus the company’s efforts towards a specific group of people. This group of people are called a target market. A target market may be based off of age, sex, ethnicity, religion, budget, experience, or geography. In order to successfully grow a company, that company must select a target market and try to focus specifically on it. For example, tobacco companies are focusing on younger audiences now to get them started early. By doing this, they are setting themselves up to have that person using their product for life.
There are several examples of companies and websites focusing on certain markets. For example, NamePros has taken a small section of the web hosting industry (domain names) and have built a community around it. Their website only covers domain names; however, they have broken domain names down into different sections. When they chose this niche, they knew who would be coming to their website and they also know that they have and will continue to attract all different types of people looking to learn and get into “domaining” as well as those who are “domain” on a daily basis. With their audience in mind, they can separate their site further into different areas. By separating NamePros into different areas, the owner can cater to all the different parts of domaining such as selling, buying, appraisals, and discussion thereof.
When choosing a market, a company has to decide very carefully what type of clientele they want.
A few good questions to ask when considering a target market are:
- What type of clients do we want? Experienced or inexperienced
- Do we want small clients (retail stores, etc.) or large clients (such as corporate clients)?
- Do we want to work with people who have specific budgets or flexible budgets?
When a company is deciding on the audience they want to target, they need to also take into account the quality and level of service they provide. If the company is a smaller company still trying to get their feet wet in their target market, going for the big time right from the get go is a recipe for disaster. Companies should pick their markets based on the experience of the people working there as well as what will sell best for them.
For example, Timex and Rolex manufacture and market watches. Rolex makes high quality watches. They cater to corporate clients and people in the upper economic class. Timex makes lower cost and quality watches geared for every day people such as students, moms, and dads. On the other hand, Rolex chose their target market to be those people who have money and enjoy luxury, such as businessmen. All their advertisements and marketing efforts are aimed at people of the upper classes. Both companies chose their markets based on their product and service. ?Rolex and Timex selected their markets correctly. They are both very successful companies that are making lots of money.
Stay tuned for the next installment of our series: Return of Investment.
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