Legendary business guru Peter Drucker is famous for asserting that one should find a market first and design a product for them instead of the other way around. This holds true, even today. With the internet and level of competition out there, you need to be smart about how you choose your market. If you go too small, you won’t have a big enough customer base to support your operations. If you go too broad, you could risk competing with Fortune 500 companies that already have a vice grip on that industry. To avoid these mistakes and enjoy more success in your business, use the strategies below:
You used to have to purchase scores of market research reports in order to understand what was trending. However, with the advent of free and cheap online tools, you can discover markets poised for explosive growth like never before. Google’s Keyword Planner is an excellent resource for this. You can type in keywords and phrases and it will show you how often those terms are searched for on a monthly basis, variations of those keywords, and even what geolocations they are being searched from. This is particularly helpful if you want to focus on a particular region, such as the U.S., Australia, or Europe.
Treat Different Market Segments Differently
Basic market segmentation is the concept that within a given industry there are different kinds of customers. Part of your segment might prefer upscale products and services while others might prefer functional and affordable solutions. Have a clear idea in mind of which segment you are targeting. This will help you avoid wasting effort on the wrong segment and instead connect with your ideal market.
You can use Amazon.com for a lot of market research. One creative technique is to look for similar products and services to that which you’re planning on launching. Then, you can search the reviews (two or three stars) to see what common complaints are. If you can develop a better product and remove the problems that your competitors’ version has, you can gain market share quickly.
Looking at organic search results such as Keyword Planner is great. However, SEO is not the only solution that provides data on how much certain terms are being used online. PPC, which stands for Pay-per-click, refers to the paid ads that you see on the side of search results in Google, Bing, and other search engines. You can use these tools to engage a certain market segment. Because you’re paying for the ads, you’ll be able to see more data about who searched for your terms and who clicked through. It’s a step above the organic traffic route thanks to this additional specificity.
Word of Mouth
The oldest form of marketing is word of mouth. If you have a new product idea, you can test it (validate it) by asking your friends what they think of it. You might just find a few initial customers to test your idea for you. This way you can engage higher level marketing channels and amplify the early success you have. After all, the internet is like a microphone. If you have nothing to say or offer in the first place, no one will listen.
In the world of business, knowing your market is paramount. Of course, before you can truly understand it you have to have the right tools and methods to identify it. To save yourself time, money, and hassle, use the advice above. That way, you can move quickly into the execution phase of your business idea.
by: Mark Palmer