Market Analysis 8: Segment Into Target Markets or Market Niches

This continues our series on preparing  the market analysis section of your business plan

The Small Business Administration writes “A market in its entirety is too broad in scope for any but the largest companies to tackle successfully. The best strategy for a smaller business is to divide demand into manageable market niches. Small operations can then offer specialized goods and services attractive to a specific group of prospective buyers.”

Ideas to Define Your Target or Market Niche

Ehow describes:

Target Markets: “Your target market represents the core group of consumers for whom your business works to create products and services. Your marketing and promotional efforts should be tailored to reach these individuals in media that they frequent, whether it's via television, the web, print, radio or mobile advertising.”

Market Niche: “A niche market goes beyond simply targeting someone by age or income; it breaks its market into smaller segments, identifying a group of people by very specific identifying characteristics. And as a business owner, you take this small segment and market to it.”

The Niche Marketing Blog teaches

• “Niche groups include hobbyists, political groups, gender groups, career groups, artists, writers, and others.
• Niche groups are usually attracted to similar web sites, blogs, and open forums.
• For example, soccer enthusiasts usually shop on similar sports web sites and sports news sites.
• When looking for niche groups, visit forums that cater to these groups and ask questions.
• You will be surprised by all the responses.
• People enjoy talking about their hobbies, careers, and lives.
• Visit web sites that are offer products that are similar to yours and see if other businesses have posted ads.
• Chances are, these businesses are frequented by the same niche groups.”

Where to Get the Information

Business Owner’s Toolkit helps you identify

• Where you can get customer and product data collection
• Factor and cluster analysis
• Cluster identification and importance ranking
• What smaller companies can do to segment their markets

Follow the link to find specific sources for each category.

Join me Saturday when we close our discussion about preparing your market analysis