SUNDAY, MAY 26, 2019
TrainingMarketing Fundamentals How to pick a market

How to Pick a Market

Introduction

If you don’t have a market of people who are willing to buy what you have to offer, it won’t matter how great you may think your product or idea is you will hit major resistance when you try to sell your product or service.

Therefore, picking the right market to serve can be the difference between success and failure.

What do I look for when assessing a market?

There are three factors that will greatly increase your chances of success, they are:

  • You must be able to reach the people in your target market easily
  • They must want what you have to sell
  • They must have shown that they are willing to spend money on products or services like yours

It is possible to start without these three factors in a market, but it will be harder and you will meet more resistance.  Unless you are a large corporation with deep pockets it is very hard to create a desire for a product or service that doesn’t already exist.

It is far easier to pick a problem in an existing market and satisfy that need, rather than trying to launch something completely new.

Market Size

When assessing a market it is essential that you think about the size of the market.

You will want to target a market that is large enough to enable you to grow to the size you want, but not too big that you struggle to gain critical mass with the resources you have.

Picking a Market that is too Small

Many small businesses pick markets that are far too small.  Often they will pick a market by default, with no market research they start offering their product or service to their local area only to find after 1-2 years that there just isn’t the scope for them to grow, or worse they open a shop in an area where there isn’t enough demand from the market to even survive!

Targeting a niche market can make a lot of sense, you can have very focused marketing and the competition will be less, but pick a niche that is too small and you will struggle to grow your business to large enough turnover.

It is therefore critical to understand which market or market segment you are going to target, then find out the potential size of that market, before setting up in business. If you are already in business and are finding your market too restrictive, it isn’t too late to refocus on another market and develop  your product or service to meet the wants and desires of that market.

Picking a Market that is too Large

Most of us have grown up in a world of mass marketing and mass communication.  Before the advent of mass media channels such as newspapers, magazines and television, we were only exposed to products and services that were available locally, within our limited reach.

Mass communication changed all this, it allowed companies to grow very large selling to a mass market, products as diverse as cars and corn flakes.

Within these markets, companies have always segmented, but we are still talking about large numbers of people which require mega budgets to reach.

The majority of companies simply don’t have the reach or the budget to market effectively to a large number of people.

The problem with trying to market to too many people is that you find it hard to reach a critical mass, over which adoption of your products and services starts to take-off.

It is therefore advisable for most small and medium sized businesses to choose a clearly defined niche market where they stand a chance of reaching a good level of market penetration with the resources they have available.

Whilst the Internet has made it easier to get a niche message in front of more people, more quickly, there is also far more noise and competition in every market.

We will look at how to measure the size of a market and the competitive nature of a market in later modules.

Next:  Needs Vs Wants