Marketing for Small Businesses 

Part 2

Niche & Segmented Marketing 

In the last article we began to learn a little about marketing for small businesses. We defined the term “marketing” and we asked ourselves questions about our business.

Now we’ll continue our investigation into the question of who are our customers and how do we market our product to them.

 What is Niche Marketing?

Did you know 80% of our products are consumed by 20% of the buyers? What if you could identify this 20%? Selling to a niche market could create more sales with much less effort.

To target this market means we need to communicate with, sell to, and receive feedback from these customers about our products and services. We need to identify the heavy users purchasing our products so we can customize our marketing to fit these buyers.

 Sounds good, right? But how do we figure out what the right market is?

 First it must be measurable - we need to quantify our expected results. Secondly, this quantity must be large enough to create our expected sales volume. Thirdly, everyone in this niche has to be easily accessible so they can receive our product. Lastly, our customers must receptive to our marketing events.

 What else can affect our niche sales? Many things which we need to analyze thoroughly prior to beginning any marketing campaign.

 For example, who are our competitors and are they able to take our customers away from us by offering lower prices, better services, or more affordable ad-ons?

 Do our competitors have similar products or services and how do we differentiate ourselves from them to make us more unique in our customers’ minds?

 How easy is it for our competitors to offer new product lines and how often do they do this?

 Will this cause us to become more reactive versus proactive thus taking us away from moving toward what we want?

 How easy will it be for us to enter into our selected market niche?

 One thing to remember is that our customers are becoming more and more sophisticated and our business must stay ahead of them to better anticipate their demands.

 Now, let’s tackle Segmented Marketing.

Small businesses can segment their customers by geography, price, sizes, or other physical factors. Let’s think about an orange being the universe of all our potential customers. Hang in with me for a moment, OK? An orange is comprised of many segments we can separate from the whole. Perhaps one segment contains all our customers between the ages of 50-80 (the baby boomer generation) or maybe another segment contains everyone within a certain geographic location. If we sold trophies, we might want to segment our customers by youth sports activities, such as little league baseball parents and coaches.

 How do we find out all this personal information to help us create our marketing segments? By hiring a market research company.

 Market Research by a primary research company isn’t cheap. But in today’s world many of our customers surf the Internet. We need to gather as much information as our budgets allow, helping us succeed. Since we may not be able to afford to hire a marketing research firm, we need to more creative and proactive with our marketing.

Maybe we can ask our customers to complete a questionnaire designed gather information to help us with our marketing plans? We can analyze our company sales data to determine what sold the most within a specified product line. We could ask questions about demographics or opinions about similar products or services. This type of information gathering is called Secondary Research.

Secondary research means going to the library and researching your competition and your targeted market audience. It is the least expensive and easiest way for a small business to conduct research. Just remember that information printed in books and periodicals are not the most current figures that can be obtained by a primary research company.

Other ways we can obtain critical information is by keeping an eye on our competitor’s marketing efforts and possibly duplicating them. We can read trade and basic research publications.

Sources: CCH Business Owners Toolkit
              Entrepreneur.com