Marketing is such a crucial aspect for any business and often it is one of the easiest to overlook. Mostly our marketing efforts boil down to being able to control our customers’ expectations. For example, if we promise the greatest product to ever come to the market but fail to deliver then we have raised our customers’ expectations without even meeting them; forget about going beyond!
This means the customers are dissatisfied; and when they are dissatisfied, they will look elsewhere to meet their expectations.
There are many aspects to look into when it comes to managing expectations and in this article, we will discuss a few of the aspects in doing so.
However, before you can go and make a marketing strategy to satisfy your customers’ expectations you must determine who your customers are, or in other words who is your target market!
What you can do, what you should do, and what you must do!
To do this you have to take a step back and look at the industry through a wide lens and evaluate 3 areas: all the potential customers within the industry, your companies objectives and abilities, and all potential competitors.
Evaluating these 3 areas will give you a top-level analysis of what you want to do, what you can do, and what you should do.
What you want to do focuses on your customers since they are your reason for existence; so, what you want to do is please them.
What you can do takes a look at your company and objectively determines your company’s abilities.
Lastly what you should do focuses on what your competitors are doing and what you think they are getting ready to do. So, what you should do is develop plans to compete against them for creating a better product or service for your customers.
Once you have completed this top-level analysis you can get into a more detailed analysis that will move you closer to discovering your target market.
At this stage there are 4 actions you must take:
These steps must all be completed in this order because each subsequent step is built upon the previous one.
To begin with, segmentation involves looking at the entire market and dividing it up into smaller segments that can be more easily understood. The ultimate goal here is to create groups that will react similarly to a marketing strategy.
Dividing the market can be done in a couple of different ways, including demographic, geographic and psychographic segmentation.
Demographic and geographic segmentation is easily understood but psychographics may not be too familiar to you.
Psychographics is simply an individual’s behaviour. Therefore, we could create segments of the market that include introverted or extroverted, adventurous or calm, and etc.
When you decide to divide up the market, you will know you have segmented far enough when your segments are homogeneous within, heterogeneous between and are substantial. This means that within your segment all members will react the same way to a marketing strategy while those in different segments will not react the same to that marketing strategy.
The first two (homogenous within and heterogeneous between) are very important because if there is some overlap you need to ask yourself why did you break them up in the first place! You could end up wasting a lot of money by creating a different marketing strategy to attract someone who is interested in your other strategy.
Substantial segments simply mean having a segment that is large enough for you to make a profit. This does not mean you must have millions of people in your segment. It just means that if you can make a profit with 10 individuals and you have a segment that big, then you have a substantial segment.
Risk and reward, finding the balance
Next is targeting, and this is done to decide which segments you want to pursue. So, as you can see segmenting really just involves defining which segments are available while targeting is choosing which ones you can pursue effectively.
Ideally, you want to pick segments that agree with your company’s acceptance to risk. If your company is particularly averse to risk, then you will want to focus on targeting fewer segments which you can dominate.
If, however, your company is okay with accepting greater risk, then you can take on more segments. You can even target multiple segments with a single marketing strategy. This comes with the benefit of using resources to make only one plan and reaping in the benefits of many.
There’s also a downside to it. If a competitor comes in with a marketing strategy designed specifically for one of those multiple segments you are targeting then they are quite likely to steal your market share.
There is no right or wrong way to do this, it just depends on your company’s appetite for risks.
What sets you apart?
Moving forward we must discuss differentiation and positioning.
Simply put, differentiation is how you compete!
At this point, it is extremely important that you develop something called the Unique Selling Proposition or the USP. You will know if you have got this one by asking: Why do people buy from you? and, How are you different?
The answer to these questions would be – your USP!
There are two main approaches you can take for developing this: becoming a cost leader or differentiation.
Take the example of Ivory Soap. When they started, they were focused on differentiation because their product was 99.9% pure which at the time was quite impressive. Their strategy was then, to make this product a little more exclusive with a higher price tag and lesser availability. After a few years though, their competitors caught up to them, which is when they decided to switch gears by focusing on becoming a cost leader.
To enforce this notion that they were the cost leader they stopped selling their bars of soap as individual bars and instead sold them in packs of 4 or more. They also switched their advertising strategy by showing ads of the whole family using these bars of soap. This is a great example to demonstrate that you can choose to differentiate your company, but your actions must line up with how you are trying to position your brand to the customers.
Putting it all together
As you can see there is a lot to think about when you are trying to determine your target market, but once you go through this process, all that is left is developing the marketing mix: the product, price, place, and promotion. Luckily for you, after going through this process you will know exactly what product to sell, where to sell it, how much to charge for it, and how to promote it. The process is designed to refine your marketing strategy down to meet the expectations of a very specific target market and that is what you should aim to do at the moment.
Finding the right target market for your small business is only the first step to get started on your entrepreneurial journey. One important aspect of getting your business on the path of success is building a mobile app with Appy Pie because no matter what your target market is, they are definitely using mobile apps!