By Sam Makad
Target market analysis is an integral part that comes prior to starting a business or any business extension. Before you do anything, it is imperative that you know the ins and outs. Your idea and your entire product are very likely to go downhill if you do not ascertain who your target users are, and who your competition is. Here, we are going to talk about some common ways on how to analyze your market. You have to know where you stand in terms of starting the business or expanding your domain.
Devise Your Own Strategy
Well, the first approach is to do it on your own, but you can’t do it without an adequate strategy. If you just intend to market something to mid-sized businesses or to smaller grocery stores, you really don’t have anything tangible in your strategy.
What you need to do is determine your target audience, and then, let’s say, inspect how many midsized business or small grocery stores can be found in a 20 mile or 10 mile radius, with annual revenue that would allow the purchase of your product… Well, that’s something else.
When you are devising a strategy, you need to have results that will give you something concrete. The more accurate the numbers you have, the better.
Also, you will need an insight regarding your competition. You need to know if anyone else is doing the same thing on your “designated” territory. If this is true, then find out if users are satisfied. If all your potential users are already getting their merchandise at a lower price from a mass producer, then your idea is going to be really hard to realize.
Another way of testing your market is trying to get crowdfunded. If you start a crowdfunding project, you get to calculate how much resources it will take to realize your idea, and you can try to sell it in advance, or during the production period. The downside is that you do not know if enough people will notice you, so chances are that you would have to market a campaign the primary role of which is to market your product. On the plus side, you are running with a safer investment, and you get to see if enough people are interested in the first place.
Learn From Others
Another way is to learn from those who already managed to succeed, someone who went with a similar idea and pulled through. See what their business model was like, and see if it was viable for your location. Of course, you will also need to do some in-depth research here.
You need to find out about their product, why people liked it, how they managed to sell it at a certain price. Also, an important thing is the production cost. If the company had a factory and was in charge of the manufacturing, then they did not have to outsource the process. Thereby, they were able to sell their end product at a lower price.
Speaking of production, you need to find people who can manufacture what you want to sell, calculate the expenses and determine the price of your product. A simple imitation will not suffice. Gather as much information about other ventures as you can and compare it to your situation. You need to examine not only their business now, but also how it started off.
The last and the easiest solution to this issue is, of course, outsourcing. You might have arguments that this is not going to work out. After all, how can someone be as thorough and as determined as you, considering that this is your business in question? You could not be more wrong. Outsourcing is in fact the best way to tackle such issues if you do not have an analyst on your team.
Outsourcing companies are basically specialists nowadays. The market is truly competitive and customer satisfaction is what these people are after. By outsourcing to another company, you are giving the task to someone more qualified, and eager to provide their honest input.
These are teams with experience and equipment to meet your demands. Many small businesses actually rely on this method. Moreover, someone who is neutral will have a far better hindsight then someone who is emotionally invested in the whole procedure.
When you are doing target market analysis, the most important thing to remember is to leave no stone left unturned. Take data based on social media and the internet of things into consideration; these things can help you uncover the degree of demand for something. Also, it is important to ask yourself, what is the best use of your resources for uncovering this data? These are the things you need to take into consideration before you can reach the optimal solution.
Sam Makad is a business consultant. He helps small & medium enterprises to grow their businesses and Overall ROI. He is associated with Research Optimus.