Know your startup’s target market

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Know your startup’s target market

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In today’s market, building a great product is not enough. The key to success is in knowing how to present it to your customers. Given the limited resources, it becomes essential for startups to break their market into addressable segments, and focus the efforts on audience with the highest probability of purchase in order to maximize returns. 

As an entrepreneur, you need to know who your customers exactly are. This is a part of the research you need to do before selling your product. Sit down and look at your market offering, and browse through which demographic would be perfect for your product. The three main ways to find your target market are geographic, demographic and psychographic. 

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Breaking it down

The target market of your startup is the limited portion of the industry that your startup goes after or to which you want to appeal. Startups should not try to service the entire industry. Instead, they should carve out a specific target market and try to service that particular market well. Swiffles, for instance, is not trying to target the entire chocolate industry. Its target market is the growing and branded restaurants and hotels that are trying hard to create memorable customer service experience. 

You may be tempted to market your products to everyone, but this will only waste your limited and valuable resources. You’ll end up marketing to no one, because you’ll be marketing to consumers who are either not interested in what you have to offer, or would not benefit from what you’re trying to sell them.

You may be tempted to market your products to everyone, but this will only waste your limited and valuable resources. You’ll end up marketing to no one, because you’ll be marketing to consumers who are either not interested in what you have to offer, or would not benefit from what you’re trying to sell them. You may lose audience if your marketing strategy does not apply to them. 

 

No Market, No Product

The last thing you’d want is to go straight into production, only to realize that it was for nothing because the consumers you thought would be attracted are not at all intrigued. It is all about establishing that there is an audience for your market offering before you have any regrets. Know who you are after, and you will know how to reach them.

Once you know your target market, you can plan around and design your marketing strategies so that your target audience identifies you, likes you, and buys from you. It may not go well unless you know who you are going to sell your product to. 

 Know who you are after, and you will know how to reach them.

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In the shoes of your customers

When you market directly to your target market only, you can determine the amount your customers are willing to spend on your offerings, how often they will make purchases, and what you need to do to keep up with their expectations. You will be more focused, your marketing strategies effective, and your returns greater.

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Finding it right

According to business authors Barringer and Ireland, “The challenge in identifying an attractive target market is to find a market that’s large enough for the proposed business but is yet small enough to avoid attracting larger competitors, at least until the entrepreneurial venture can get off to a successful start.”

The challenge in identifying an attractive target market is to find a market that’s large enough for the proposed business but is yet small enough to avoid attracting larger competitors, at least until the entrepreneurial venture can get off to a successful start,” writes Barringer and Ireland.

At their initial phase, most startups simply don’t have the resources essential to operate in a broad market. When startups focus on serving a smaller target market, they can usually avoid head-to-head competition with industry leaders and serve their market well. 

Target market analysis is essential for your business to succeed, and to avoid wasting your valuable and limited resources. It will ensure that you have the required information on your target demographics and determine how to market your offering. You can also tweak your product according to consumer needs and expectations before launching it. When you have your target market in place, you can be assured that consumers will be receptive of what you have to offer. Every rupee and every minute of your investment will be worthwhile. 

 

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Guest Tuesday, 25 September 2018