Building A Thriving Business (What's at the VERY CORE) Pt 14

The question every business leader needs to ask is, what business am I really in? And you need to keep asking that question periodically, because the answer always changes. The question is dynamic, because, it helps determine where your business is along the value chain, your competitive advantage, your niche and who your target market is.

Market Segmentation

In this post, I will be discussing market segmentation, which is, who in the market is willing to pay the most for your specialised product/service; that is your target market. If, someone were to answer the first question I posed at the beginning of this post, in light of the discussion, one could say, I'm in the business of putting a smile on people's faces. But, which people are you referring to? Young or old, female or male, black, white, asian or hispanic, high income earner or low income earner, single or married; you need to be specific in your segmentation of the market. Who is your product/service most appealing to? If you can identify that segment of the market, the majority of your sales will be taken care of. Any other outside interest, will be an added bonus. The next factor to consider is, why would your product/service put a smile on their faces? Are you helping them to alleviate a pain, dissolve a doubt, resolve a challenge, meet a need or solve a problem? All I have exposed, are what you call the demographics and psychograhics of your target market.

Your Ideal Customer

My analysis thus far, has been to describe to you your ideal customer, without even mentioning the product/service a business could potentially sell. Because, if you know your ideal customer, you'll know how to sell to them. Concentrate your effort and resources on your ideal customer, especially if you're a startup, then begin to diversify as you begin to scale.

Case Study

IBM at one point, had nearly 80% of the world's computing market, until the late 80's, early 90's, when they made a huge mistake, by failing to anticipate their customer's needs. Now, they have much less. However, they were able to maintain dominance for nearly 20 years, because they identified their ideal customer.

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