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Understanding Your Market

Over the next couple of weeks, I will discuss the importance of identifying your market. The importance of learning and discovering your customer. Pitfalls startups often make and how to avoid them. How a business can stay customer focused instead of the bottom line driven. Lastly, strategies on how to rethink your business idea.

A fundamental principle of business is identifying which market your product or service will be segmented. Investopedia defines the market as, “goods and other services, which sellers determine by creating supply and which buyers determine by creating demand.”

It is essential to identify your market as earliest as possible when creating a product or service to ensure that you are meeting a demand. It also helps determine your position amongst competition or creating a niche within a market.

In the article “Defining Your Market in 7 Steps” Lynda Falkenstein, author of Nichecraft: Using Your Specialness to Focus Your Business, Corner Your Market & Make Customers Seek You Out states, that there are some basic principles an entrepreneur/startup must follow:

  1. Make a wish list – Be specific with whom you want your customer to be, e., consumers or businesses. Try to narrow down your ideal customer as possible.
  2. Focus – What you sell needs to be clearly What makes your product or service stand out? For instance, if you have a coffee shop, does your coffee shop specialize if domestic or international blends?
  3. Describe the customer’s worldview – How does your product or service identify with your consumer’s needs or wants? This is an excellent time to engage prospective customers.
  4. Synthesize – At this stage, your product or service should be aligning with what the consumer needs. You’ve reworked your initial idea to cater specifically to what will sell. You carefully plan at this stage and try to measure your longevity.
  5. Evaluate – Assess your competition and rate of growth. How many customers will you need to be profitable? How much will it cost? Be realistic in your evaluation.
  6. Test – “Give consumers an opportunity to sample your product or service.” Take note of their feedback. You may need to go back to the “drawing board.”
  7. Go for it – It is time to work on becoming a market leader.

Sources:

Market – Investopedia (2018, January 29) Markets in Context Investopedia.com Retrieved via Market https://www.investopedia.com/terms/m/market.asp

Entrepreneur Press (2013, February 13) Defining Your Market in 7 Steps Retrieved via https://www.entrepreneur.com/article/225656

One thought on “Understanding Your Market

  1. Hi Tosh,
    You made some great points on how to know your market and test your product. We all have different businesses and the products and services we provide can become unique if we can test them and critique them as we go to better fit our customers needs and wants.
    Thank you for sharing

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