In our last post, we talked about how to segment your market. Why will you want to do this, though? It is only human to ask the question- how will this benefit ME? To put it simply, knowing your market will allow you to determine your target customer.

Target Customers

Now that you’ve segmented the market and determined the who, the what, the where and the why, you’ll find it helpful to focus on a few key groups such as “families” or “young couples.” Base this information on your research (you didn’t just do it for fun) and determine the groups who are most likely to be drawn to your product or service. You’ve determined these segments already, now you need to answer the question WHY will these people spend their money with you?

Be sure to credit your sources with any information cited, including yourself. If you conducted extensive market surveys and/or analyses, you may want to attach more information on the methodology and any other pertinent discoveries you made along the way in the supplementary documents section of your plan.

Define both your primary and secondary target consumers. The primary target is simple enough- who will be the main customer that your business will pursue? Secondary targets will include the business that you receive as a consequence of doing business with your primary target. For example, if your primary target is children ages 5-15, you may receive additional business from their parents and/or grandparents, which would make up a portion your secondary market.

S.W.O.T. AnalysisFile:SWOT en.svg

So, you’ve done the research on the market demographics and its size and condition and it’s time to bring it all together with what we like to call the SWOT (a.k.a. SLOT) Analysis. This is an acronym that stands for Strengths, Weaknesses (or limitations), Opportunities and Threats. Unlike many things in life, this really is as simple as it sounds. Think of strengths and weaknesses as the internal factors that will influence your success while opportunities and threats are the external factors that will influence success.

  • Strengths: What attributes does your product or service have that will give it a strategic advantage over others?
  • Weaknesses: What attributes does your product or service lack that will put it at a disadvantage compared to other products in the market?
  • Opportunities: What is available to you in your environment that will increase the chance of your success?
  • Threats: What is out there that could be bad for business?

Address these questions for each of your products you will offer. How does your product differ from that of your competitors? In delivery? Performance? Pricing? I know I’ve said it before- but how do you stand out from the rest? What makes you special? Describe how current products and technologies can be leveraged. Describe the cost of entry, time-frame and risk in the market.

What does your SWOT Analysis tell you?

Image courtesy of Xhienne (SWOT pt.svg) [CC-BY-SA-2.5 (http://creativecommons.org/licenses/by-sa/2.5)], via Wikimedia Commons

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Segmenting Your Market

by asherman on July 10, 2012 · 1 comment

In our last post, we talked about two important factors for your market analysis, the market size and the market conditions. Today we’re going to talk about demographics which will allow you to segment your market. After you segment your market, you will be better able to understand who your target customer will be and you will know more about the stability of your market.

Geographic Segmentation

Identify your region and the characteristics of the region to enhance your knowledge of the market. Narrow the area of your customers by identifying what country, state and city your target customer most likely resides in. If you are offering services to customers in a specific region, determine the size in population of the area. Need help? Use the census website to determine population of certain US regions. Be sure to break your findings down by county.

Demographic Segmentation

Using demographics such as age and gender will help you to understand WHO you are targeting and how. This section of your plan should contain answers to questions such as: What is the age range of your target customer? Under what income bracket does your target customer fall? What is the typical level of education of your target customer?

Psychographic and Behavioral Segmentation

Now you need to determine the beliefs and habits of your target customer. Describe their lifestyle. What are their interests and activities? What opinions and attitudes do they hold? Research done in this section will allow you to better understand your target market. This section should answer questions such as: Based on the age group of your target customer, what activities are they most likely to participate in? Based on their attitudes and opinions, what values do your target customers generally hold? How brand loyal are your target customers? How ready is your target customer to buy your product or service?

Answers to these questions will allow you better understand your customers (which is important) and will help you to determine who constitutes your target market. This will allow you to easily reach those customers.

Do the demographics of your target market support your plan?

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Creating a Winning Marketing Strategy

by asherman 07.06.2012

Tweet I know, I know- everyone wants to read about the Executive Summary- but let’s show the marketing plan a little love… So you’ve started your plan and you’ve reached the marketing strategy. Of course, you’ve already read our previous post, Components of a Business Plan part 2, but you want something a little more [...]

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Components of a Business Plan (Part 3)

by asherman 06.29.2012

Tweet Written by Burke Franklin, founder and CEO, JIAN This is part 3 of 3.  If you missed parts 1 and 2, pick your poison- Part 1, where we talked about the executive summary or Part 2, where we talked about the market analysis and strategy. Let’s drive this puppy home. 11. Management Team- What’s [...]

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Components of a Business Plan (Part 2)

by asherman 06.26.2012

Tweet Written by Burke Franklin, Founder and CEO, JIAN We talked last week about the beginning sections of your business plan. If you haven’t read it yet, click here to play catch up. This is part 2 of 3, so make sure to check back with us soon. 7. Company Overview- Give readers the basic [...]

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Components of a Business Plan (Part 1)

by asherman 06.21.2012

Tweet Written by Burke Franklin, CEO and founder, JIAN “The plan is nothing. The planning is everything.”      – Dwight D. Eisenhower There may have been a day when people read business plans cover to cover. Not anymore.  When they get close to giving you money, they might, but first you have to grab their interest [...]

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What Investors Want to Know… (Cont’d)

by asherman 06.20.2012

Tweet When you’re writing your business plan, you want to make sure to highlight what sets you apart from other businesses.  A good way to do this was put forward by Scott Miller, co-founder of Core Strategy Group, small business coach for OneMoreCustomer.com and co-author of the books ‘The Underdog Advantage’ and ‘Building Brandwidth.’  When [...]

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What Investors Want to Know…

by asherman 06.19.2012

Tweet Written by Burke Franklin, Founder and CEO, JIAN For a moment, put yourself in an investor’s position (actually, do this throughout the plan writing process). What would YOU want to know about a business before you invested in it? Think about investing money in a friend’s business to get the mental, physical, emotional and [...]

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What is a Business Plan?

by asherman 06.15.2012

Tweet Written by Burke Franklin, founder and CEO, JIAN A business plan is a written document used to describe your business.  The sections of a business plan are fairly standard, so you can find lots of help from those that have gone before you. Each section in a business plan has a specific purpose.  Certain [...]

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Why Write a Business Plan?

by asherman 06.14.2012

Tweet Written by: Burke Franklin, CEO and founder, JIAN “A sensible man never embarks on an enterprise until he can see his way to the end of it.”    – Aesop A business plan is a road map to the future of your business (both for yourself and your investors).  Writing it, though, can be an [...]

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What is an Executive Summary?

by asherman 05.23.2012

Tweet The Executive Summary is the most important part of your business plan. It’s the first part that potential investors will read, and if written poorly, it could be the last! It is wise to complete your plan first, and always come back and do your Executive Summary last.  Some people use the Executive Summary to get [...]

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