Starting A Business 5: Target Market
Can your product solve problems, or meet needs, that people are willing to pay for?
The primary purpose of any business is to meet the needs of customers and provide solutions to their problems and challenges. No matter how good your product is, if it is not a solution to the needs and challenges of a large number of potential customers, then the product is not viable as there may be no adequate market for it. You need to determine that there is a market and a need for your product irrespective of the type of product.
It is easy to assume that your product or service will be popular among a large number of people. You have to be careful not to be carried away by your experience and what you think you know about the market, so that you do not overestimate the market size.
You should carry out a preliminary survey and study to get relevant information that will enable you respond adequately to the following questions about your target market:
1. Who are the potential beneficiaries and users of the product in the market?Where are they located? What is their income level? Will anybody be willing to pay for the product or service even if the person is not the direct beneficiary?
2. How do you want to reach out to the market? What digital marketing platforms will be appropriate? How will you identify and monitor the evolving needs of the market to provide the basis for continuous improvement in product design?
3. How are competitors organised in the market in terms of existing distribution channels and agents, pricing and discount, promotion materials and free offers? Are there substitutes for the product, or does the product complement other products in the market?
4. What is the growth potential of the target market? Will product segmentation be effective in the target market? How is the market influenced by government policies and actions? Who are the market leaders and what market share are you aiming at?