This is an important part of your marketing plan which needs to demonstrate both your expertise in your particular market and the attractiveness of the market financially. You need to know your target market, its needs, where it is and how you will reach it.
The first step is to define your target market. You need to know what the people and/or businesses who would be interested in buying your products or services are like. And how many of them there are.
You need to demonstrate the market needs. Or in simple terms, you need to know why they buy!
Then you can make projections about your target market size and how much of your products or services they might buy. Also what is the likelihood of your market being affected by future demographic shifts, economic events, government policies or regulatory changes?
You should strive to be better than your competitors and that means you need know what they offer and how they work? Get obsessed with your competition and anticipate what they will do almost before they know themselves. Look at your customer groups, identify competitors in each, and work out which areas you should be measuring against yourself. This will give you the knowledge as to how to improve your services.
You should build a competitive strength grid. Define the key assets and skills necessary to succeed in your business. Then list your major competitors, their assets and skills and how your own company fits on this scale. This will help you to determine where you stand in relation to the other businesses competing in your industry.
A market segment is a subgroup of people or organisations, sharing one or more characteristics. Generally they will have similar product and/or service needs. The purpose of creating segmenting your customers is to ensure you gain a better understanding of who they are and what motivates them to purchase your products or services.
You should identify groups of current and potential customers to:
- Prioritise the groups to address
- Understand their behaviour
- Identify the appropriate marketing strategy