Defining Your Market Segment: Targeting the Customer

A target market is a group of prospective customers with a set of common characteristics that are distinguishable from other types of customers. Your job is to understand and describe these common characteristics in your plan and tell how you will make those potential customers your own. You might have more than one target customer. For instance, maybe you are an accountant who has both business and individual clients. Or perhaps you manufacture computers for the home, business, and educational markets. You need to explain these customers in their own unique way.

Keep this in mind: Don't explain why your target market needs you. Explain how you plan to meet their needs.

Customer Types

The type of customer you sell to, especially if you plan to sell online, is one way to categorize your target market.

Some customers are looking for convenience, want to save time, and are primarily impulse shoppers. For these customer types, convenience is prized over price. That's the target market of convenience stores, such as 7/11 and Circle K. Then, there are the window-shoppers. They're willing to take their time when making a purchase. They like to have as much information as possible before making a purchase.

Other types of customers are those who are drawn only to brand names and who are very brand conscious. Selling off-brand products will not fly with this group of customers. Finally, there are bargain shoppers who are interested only in a good deal. They are looking to buy products and services at a discount or they are keen comparison-shoppers looking for the lowest price.

Customer Motivations

Describing the buying motivations of your customer is another way to define your target market.

First, of course, is the product or service motivatorthe need to satisfy with merchandise and services. Your unique selling position is designed to meet a specific product or service motivational need. Second is the information motivationthe need to know. Your target market might be customers who are information addicts and who need to know the latest financial, celebrity, or sports news. Third is the entertainment motivatorthe need to be entertained.

For an online business, there is one other motivation: the need to connect with others. The Internet is well suited to meeting this motivational need of community, and many businesses have developed along those lines. One example is iVillage, at www.ivillage.com, a website for women. Another is ePinions, at www.epions.com, a consumer opinion site on products and services from A to Z.