By Rohini Gonsalves
We often hear people use the term ‘market’ loosely, to mean several things – the economy, the capital market, and sometimes ‘potential buyers.’ Let’s explore what the market stands for in a business.
Firstly, the correct term to use is ‘Target Market’, and not just ‘market’.
What Is The Target Market For Any Prospective Or Existing Business?
As I see it, the target market is a group of persons or parties who are likely to use the product/service being sold by you for a certain price.
Now, one must accept the fact that there is always a buyer available somewhere. People buy a dozen pens for 20 Rupees on one hand and pay several tens of thousands for one pen on the other extreme, with innumerable options at various prices in between. So there is no dearth of buyers. So, you need to identify the target market you aim to serve to get it right.
The key to the success of a business is to find an adequate number of buyers to make the business profitable.
The defining and identification of the Target Market needs to be done before the launch of that business, product, or service. Defining the ‘who will buy’ the product/service is like a sieve. Your business exists in an open society; therefore anyone may inquire about it. Segmentation is a strategy of elimination rather than attraction. You may want to pick the correct demographic, socio-economic strata, tastes and preferences, buying behaviour etc.
Once it is clear to the minutest detail of who your buyer is, the next step is to structure the business processes so meticulously, that it eliminates the ones that are not your target market.
Factors like design and pricing are the most prominent factors that influence the target market. The people who appreciate a bright colour package are distinct from some others who are repulsed by gaudy colours. They may prefer the pastels more. Design is a powerful tool of distinction.
The price is the most efficient way of choosing the target market. The same product may be made available to different economic bands by pricing the product differently. A business can use pricing to attract either the masses or any subset of it.
We see several businesses serving distinct segments at the same time, but fail to observe it as an act of segmentation. A restaurant has an AC section and a non-AC section serving the same food to two distinct buyer segments. Car manufacturers use the same engine in a sedan and a hatchback. Consumables like toothpaste, shampoo, etc. are sold in bottles and in sachets to cater to separate economic subsets. The ketchup manufacturers sell their products to domestic consumers in bottles and to restaurants in sachets. In the service industry, a laundry may offer door pick-up for hotels or bigger customers. Jewellery stores have a more sophisticated lounge for diamond buyers. Banks have a relationship manager assigned to premium customers.
Once a business has clearly defined its segment, then the next step is to ensure that what they offer meets the needs of the buyers and they are left with a delightful experience. The product or service, the buying experience, the after-sales service and the customer relationship management should be befitting that segment.
The final step is to communicate with that segment in such a way that they keep on buying more and more. The mode, tone, content and channel of the communication largely depend on who one wishes to connect with.
Some businesses use personalized communication when they are serving a niche market. But the same is not doable in the case of a mass market product which may need advertising on mass media platforms to communicate a similar message.
Thus, a business which has a clearly defined Target Market Segment is certainly able to conquer the Product, Price, Place and Promotion, which are generally considered the four cornerstones of a good marketing plan. A solid marketing strategy will undoubtedly direct the efforts of a business to more profits and sustained growth.
“My counsel to entrepreneurs is to ‘own’ a region, ‘own’ a market, ‘own’ a segment. Create something you can defend. Don’t get hung up on the idea that you have to go national.”— Gary Hirshberg
About the Author:
The author, Rohini Gonsalves, is a gold medallist in marketing, sales management, and sales promotion from Bhartiya Vidya Bhavan. She holds more than 15 years of experience in the field of marketing and sales, is a marketing consultant, and also the founder of Sevarat, a Panjim-based start-up which provides geriatric care services to elderly patients.
Anyone wishing to avail of her services may contact her on:
Mobile: +91 8329 857965
Email: [email protected]