Identifying Your Target Market for Your Niche Business

Does your business satisfy a need, solve a problem, or make your customer feel good?

In the case of The Active Dog, our products did all three.

Our customers had a need for tough toys and protective products for their active dogs.

Many had dogs that were like ours, and destroyed toys within minutes. Living in a cold weather state, they needed boots and clothing to protect them from the cold in winter. They were uncontrollable during walking. Training collars helped with that problem. Some of them liked to take their dogs boating. We offered lifejackets to keep them safe. For dogs that weren't getting enough exercise we offered some alternatives, such as backyard obstacle courses, backpacks for hiking, giggle balls for indoor exercise during inclement weather. (We encourage wide open spaces like an open basement for this.)

Both dogs and customers felt better from the bonding and the exercise.

Determining which of these categories your business fits into and how your products or service applies, will help you identify your audience.

Next ask yourself a few questions. What age, gender, income, education, ethnicity, religion, and marital status will your product or service appeal to? Is the product or service a necessity or a luxury? How will it be used? What are the benefits of your products or service? These are your demographic statistics.

Those demographics should help you determine your primary market. You may also have a secondary market. For instance, if you had a romantic Bed and Breakfast, your primary market might be newly weds and your secondary market might be couples that are looking for a romantic and relaxing getaway from a hectic schedule. You might want to offer different additional services depending on which group you happen to be catering to.

Perhaps, in your area, you would find you have the most wedding business during the summer and the most couple business during the winter.

You might even have a third, local market. Residents looking for a place for overflow guests during a special event or organizations looking for a place to met or retreat.

Now you will want to segment your market according to psychographics.

Are your customers likely to be economical, straight, gay, conservative, affluent, trendy? Do they seek luxury, excitement, relaxation, romance? What interests or activities do they enjoy? Are they environmentally conscious?

The more you understand your target market, the easier it will be to fulfill their needs and to determine how your marketing will reach them.