In our previous post we discussed the importance of finding a large starving crowd. The second important element goes hand in hand with the first.
Warren Buffet actually uses this theory as an investment strategy. Mr. Buffet has been quoted as saying that the reason that he invests in consumer goods producers like Gillette razors is that in good and bad times people will still shave. Thus the razor business in his estimation is a stable business producing returns in regardless of economic conditions. If by chance the target market you are interested in is already buying in the category that you are proposing to sell in, you have a very good start. Then the work of crafting a marketing message and finding customers just became that much easier.
This brings us to some of the false assumptions would be business owners make. At times entrepreneurs fall into a false sense of security by thinking the absence of competitors in their category is a good thing. The opposite can also be a false assumption thinking that the existence of competitors negates the market viability of their product or service. Like everything extreme views on each of this perspectives can lead one down the wrong path. Taking the time to fully analyze the research h is key to finding a good target market.
Lastly, it is very important to fully understand the buying power of your target market.
At times there are large markets that may be suited for your product or service ,but simply lack the ability to pay for the product or service. Dan Kennedy, once addressed this issue by explaining that the best marketing could not overcome the worst economics. In this remark, Mr. Kennedy was not specifically addressing the macroeconomic environment, but rather talking about the economic ability of the target audience to be able to pay the price demanded for the product or service.
Even in these economic times there are organizations that have a full understanding of what has been discussed in this article. A prime example is Apple. Recently the various newswires reported that Apple’s retail located on 5th Ave is currently experiencing record
breaking sales while many other stores in the same area are struggling. This is occurring even after Microsoft went on an advertising offensive claiming that Apple sold their products to expensively.
It is easy to discard the Apple success story by simply thinking that they are a big corporation with unlimited budgets and certainly they would be successful. If that were true then we would be seeing all large corporations succeeding the same way. Instead as the article pointed out other stores in the same geographic vicinity are struggling. The fact is these types of successes are not accidental and are a result of good market research.
The take away here is that today more than ever, market research is key to success.
The good news is just about anyone with a computer or access to a library can access market research and find the information to make good decisions. The efforts put into researching and understanding the market are the foundation to a building a business.
There are many strategies and techniques that go into market research and at Bay Area Mastermind you can find out all about them. So if you have not checked out our meetings, why not take a test drive and see how you can take your business to a whole new level.