Examine in detail the company’s current target market(s). Obviously to do this section correctly takes a great deal of customer-focused research. (Length: 2-3 pages).
1. Describe the target market approach:
- What general strategy is used to reach targeted customers? Generally approaches include:
- mass market – aim to sell to a large broad market
- segmentation approach – aim to selectively target one (niche) or more markets
2. Describe demographic/psychographic profile of the market:
- Profile criteria may include:
- gender, income, age, occupation, education, family life cycle, geographic region, lifestyle, attitudes, purchasing characteristics, etc.
3. Describe the following characteristics of targeted customers:
- Needs/benefits sought by market
- Product usage
- Consider answers to these questions related to customers using the product such as:
- who is using the product?
- why do they use the product?
- when do they use the product?
- how is the product used?
- Consider answers to these questions related to customers using the product such as:
- Product positioning
- Evaluate how customers perceive the product in relation to competitor’s products or to other solutions they use to solve their problems
- Attitudes
- What is the target market’s attitude regarding the company’s product?
- What is the target market’s attitude regarding the general product category?
- i.e., exam the general attitude regarding how products from all companies serve the target market’s needs
4. Describe the purchasing process:
- How does the target market make their purchase?
- What does the decision-making process involve?
- What sources of information are sought?
- What is a timeline for a purchase (e.g., impulse vs. extended decision-making)?
- Who makes the purchase?
- Does user purchase or is other party responsible (e.g., parent purchasing for children)?
- Who or what may influence the purchase?
5. Provide market size estimates (keep in mind these are estimates for the market not for a specific product)
- Provide size estimates for the potential market
- What is the largest possible market if all buy?
- Provide estimates of size for the current target market
- What percent of the potential market actually purchased?
- Provide estimates of future growth rates
- At least through the time frame for the plan (e.g., 1 year) but most likely longer (e.g., 3-5 year projections)
