Many small business owners forget to identify and define who their target market is, which hinders them from completely capitalizing on consumer buying. In order for them to be successful they must have a clear understanding of who the consumer is, what their needs are and their purchase behavior. If small business owners have a complete understanding of whom their consumers’ are, it will encourage customer retention, help define their business niche, and allow them to market their products in a profitable way.
Small business owners must identify their consumer by demographics and not by a broad spectrum. The more they know about their consumers the more they increase their chances of success. If they can’t identify their target market, they increase their risk of failure and prohibit the business from being consumer focused. Companies that don’t understand the importance of being consumer focused suffers from limited growth potential and they risk wasting money and valuable resources on marketing to the wrong consumer. It’s not a smart business practice to assume that all consumers are alike. This assumption prohibits the business from finding its place in the market.
When researching their target markets, small businesses must be specific when defining their consumer and avoid general classifications. The biggest issue business owners have when finding information about their target market is information overload. There is a wealth of information on the internet but knowing what information is needed can be a hang up for most new businesses. In order to minimize getting drowned with useless information it is best for new businesses to come up with research questions that can guide them through their research. They should compile a list of questions specifically related to their business and consumer.
Small business owners should be well informed about their consumers’ demographics such as age, gender, income, education level, occupation, family/household size and region/geography. If a small business objective is to offer affordable daycare service to single mothers who can’t afford it at the full price then the companies target market should reflect that. If the small business defines its target market as women with kids, it would mean that their service is open to all women with children of all ages. With this broad defining, the company wouldn’t be fulfilling its objective of offering affordable daycare service to single mothers in need. However if the small business redefined its target market as single mother households with incomes of $15,000- $35,000 who have children between the ages of 6 mos.- 11 years of age, it will allow them to really impact the market and target a specific group. This not only helps small business owners define their target market but develop their business niche.
It would be wonderful if all small business owners could do everything for everyone but the truth is a small business can only do so much. If small business owners settle on servicing a specific part of the market they can increase their chances of success. All major companies have a specific target market, for example Wal-Mart brags about offering low prices that help their customers live better lives, which are directed toward bargain shoppers in a target market of low to middle class families. They market and offer products to a specific group and because of this it have been a big key to their success.