Segment Your Market
Identify different parts of your market to use as building blocks for researching your market, forecasting your sales, and developing your Marketing Action Plan.
Too often I encounter inexperienced entrepreneurs who say they plan to sell their product or service to a generic group called “all people.” Aside from my gut instinct that this statement may never be completely accurate, it’s not very useful for researching, planning, forecasting, or marketing purposes. It will be more effective to describe your market in more detail in order to arrive at a business and marketing plan that you can take to the bank. Dig deeper, narrow your focus, and strive to define your market and your customers as accurately as possible.
Here are five main categories of variables, different ways to segment or break your market into manageable groups:
- Geographic–where they live or work
- Demographic–age group
- Psychographic–needs or wants
- Behavioral–for example, “early adopters”
- Business–type of business, earnings, number of employees
View the Example: Segmenting Your Market
View the Example: Statements Describing Customers
Action
This information will form part of the narrative of your business plan. In the working copy of your business plan using the Shell™, enter this information under heading 3 “Marketing” under the section 3.3 “Profile of the Customers.” You will be revisting, revising and fine tuning your draft customer description in steps 20, 28, 29 and 38.
- From your market research, write a number of statements describing your customers.