- April 2, 2016
- Posted by: Paul Foster
- Category: Customer segmentation, Entrepreneurial advice
When you start a new business, it is suggested sometimes to determine your ‘market’.
There is often confusion on the definition of a ‘market’. I think the wrong area to focus on is the macro – economic approach where you determine, for example, that China is the biggest and best ‘market’ for your new business.
The better question is:
“Which people in this large marketplace will be your actual customers?”
The more you can drill down in the marketplace to determine the specific groups of customers that have similar needs and frustrations, the better.
The best method to develop your ‘market’ or ‘customers’, is to explore the needs and wants of particular customer segments and then match your business offering to their needs. In business lingo this is what we call matching your ‘value proposition‘ to your ‘target customer segment‘.
Rather than stating:
“I have a great business idea, let’s find a market for it.”
The best starting point:
“I have discovered a real need in a specific customer segment, let’s develop a good value proposition to fill that need.”
In summary, this approach focuses on what the potential customer wants or needs instead of taking your great idea on a plane to China expecting the whole country to be there at the airport waiting to buy your product!