Through last week’s blog post, I introduced the basic concept of target market and explained why a correct target market can be fundamental for businesses, especially startups. We examined how a target market should be specific and pinpointed, as it is the basis of a business and a guidance for its development. This week I will explore more about the topic of target market – how should we choose our target market, as we may have distinguished business ideas in various industries? We will look at several successful companies and discuss how they choose their target markets, then I will talk more about my own business and how I can apply what I have learnt to make it more efficient.
As we mentioned last week, your target market has to be SPECIFIC. Some businesses say that they “target anyone interested in my service,” others claim to target, for example, small business owners, or stay-at-home moms. All of these target markets are way too general, and they may hurt your business, as they decrease your efficiency both financially and physically. Therefore, how should we select the target market for our business? A close look at Inc.com, a website I love to research on the topic of business, will give us lots of useful answers. The first step is straightforward – you have to understand what product or service you are providing for the public. A toy company cannot target old people as its major customers, while a wheelchair company tends not to target teenagers as their major clients. Then, you can make a list of the benefits of your products, and analyze how each of these benefits can fulfill the needs of a certain group of people. For example, a graphic designer offers high quality image design services, and such a benefit can attract many startup entrepreneurs, as they can take advantage from the well-designed logo to market for themselves and attract customers. After you know which direction you should go towards, you should look at the common characteristics of those who are willing to buy your product while considering competition as a way to refine your target market. Don’t go after a target market that your competitors are already pursuing. Instead, find a niche market they are overlooking and take off. Uber did a great job several years ago to distinguish themselves. After making the decision to work on the transportation industry, Uber took a smart move – as many other competitors such as Citymapper were targeting public transportation systems, Uber specifically targeted the private transportation market. It refined its target market to those white collars or managerial officers of a company who prefer private transportation rather than public transportation, and advertised directly towards this specific market. Uber’s success proved the intelligence of the identification of its target market. Last but not least, as we briefly mentioned last week, there are lots of different ways to choose a specific demographic to target. We can refine our target market through physical differences such as age, location, gender, income, etc., and we can also use psychological characteristics such as personality, attitude, values, etc., to differentiate our target group. Of course, don’t forget to evaluate your decision after you make the choice: are there enough people fulfilling my criteria? Are they accessible? Can they afford our products and services? After taking all these factors into consideration, remember to adjust your target market once a while as your company progresses. You are looking for the development in the long run. So don’t be afraid to make changes!
Now let’s take a look at Patagonia and how Yvon Chouinard identified his target market. In his own book, Let My People Go Surfing, Chouinard talks about the starting phase of patagonia and how instead of merely making clothing products, he wanted to introduce an environmentally friendly idea to the public. According to Investopedia, Patagonia targets those who are “environmentally conscious and upscale,” as they try to promote their idea of environmentally friendly clothing to the competitive clothing industry. Such a marketing strategy is unique and brave, as it uses value, a psychological criteria as the main method to identify the target market. Patagonia intelligently avoids going after the same target market major clothing brands such as Nike and North Face are working for. Instead, it endears itself with those who are willing to use clothing as a way to solve environmental problems. Besides being environmentally friendly, Patagonia also works to solve other problems in our current society such as consumerism, as it advocates people to “only buy what you need.” Patagonia’s identification of its target market through psychological criterions has become a model for many startups, as it has turned out to be very successful, at least for Patagonia itself.
So after all, how should I define a target market for my own sneaker re-sell business? Hmm… It is a hard question, as “sneakers” is already something so specific, or is it actually? In fact, I believe it is easier for me to identify the target market for Sole Garage since we are already working on a product that is specific and refined. Currently our target market can be divided into two major parts. First, we target people with an age ranging from middle school students to working white collars who love collecting sneakers and follow street cultures, as we provide a trusted platform for them to purchase 100% authentic sneakers from Nike, Air Jordan, Adidas and other brands that are already sold out officially. We don’t want to target those who are already well experienced in the sneaker society because according to observation, we have discovered that those more professional sneaker collectors tend to ask for more exclusive sneakers, which we do not always have access to. Therefore we are working primarily to serve those mavericks in the sneaker-collecting word as we provide them with most updated kicks. Secondly but also importantly, we also target sneaker traders just like us, as we provide a platform for people to trade with each other. We will help sneaker traders connect with each other and we only take a small percentage for profits while letting the traders discuss the trade by themselves. Instead of going after a huge market like established sneaker brands such as Nike and Adidas, we target only a small of individuals who are fond of collecting sneakers instead of actually wearing them, and we believe that such a specific target market has helped us work more efficiently with a clearer purpose.
That wraps up this week’s blog post as well as our exploration on the topic of target markets. Next week we will dive into a new but related topic – marketing. Actually I believe that the study of target market is like a prerequisite of the study of marketing, and I can’t wait to explore more in the world of entrepreneurship with y’all next week. Peace out!