How to Define Your Market

Stand out in the crowd

Having discussed the different channels an entrepreneur can use to connect to their potential and usual customers, today I would like to clarify some terms used in marketing to enable us talk with the same level of understanding.

Many people confuse marketing for advertising and vice versa. Marketing is defined as a process of choosing a target market, and building a profitable business relationship with the chosen market. The next question would be ‘What is a market?’ To the majority it’s the place where they sell fruits and vegetables. They are actually right. A market is a boiling point where sellers and buyers meet. With this definition the market can be the internet, a physical market, a shop, a garage, etc. It can also be described as where you find prospects (potential) and actual customers as well as sellers who gather to exchange. By an exchange we mean trading something of value with each other (money for service or goods).

What is marketed? Usually goods and services widely, although in the current world order, ideas, concerts, organisations, governments and tenders are all marketed. To be able to market successfully we need to differentiate a need, want and demand. What is a need? These are basic human requirements like air, water, clothing, food and sex. A want is defined as a need directed to specific goods and services. For example we all need clothes. To satisfy this need we can wear a leso, mitumba clothes, locally designed items, imported designs or specific Italian designer made.

As a marketer we have to go deeper in defining our market, by looking for demand. Demand is defined as the want of specific products, goods or services accompanied by the willingness and ability to pay/buy. As entrepreneurs, our market needs to be a place, forum, platform where we can meet prospects and buyers of our goods and services; who actually find value in what we offer and are willing to pay the offer price. In this market place we have the highest possibility of finding potential customers, new customers and repeat customers. The aim of marketing is to give customers value, achieve customer satisfaction and create a lasting relationship with your customers. That is termed as customer retention.

What is value? This is the satisfaction a customer derives from consuming your good or service. This leads me to discuss value proposition. What you offer to the customer is perceived to have some value. That value is the claim you offer to attract an exchange. To give an example, Safaricom value proposition is “the better option”, for Uchumi supermarket it is “the home of value”.

As entrepreneurs we need to separate the product and service from the value proposition to get it right. In a seminar I attended recently an example of business making samosa was given. The samosa was the product coming in many varieties: vegetarian, beef, sweet potato, chilli, etc. The value proposition in this case was “made with love”; this was the promise in this specific business. Note that the product is different from the promise which is the value proposition.

In marketing, another term commonly used is positioning. Positioning is defined as the place your product, service or business takes in the mind of the customer. Are you the first choice for your customers, the ones you supply to or engage in exchanges with? If you are try to find out why. What makes you different? That is your competitive advantage that you should fight to perfect in this competitive world of business.

To be able to stand out in our business or enterprise we need to understand what our value proposition is. What is this that makes us different from our competitors? Who is our market and how big is it? Are we able to divide our market in groups of similar customer groups? By this I mean are we selling to wholesalers or retailers or sub-wholesalers?  Are we selling to the end user or another business?

We cannot compete only on price. Competing on price means we are a copycat, we lack creativity and innovation to drive revenue generation profitably and sustainably, and the only way out is closure. Be different, serve with a smile, train your employees and empower them to deliver value. It’s the only way we build sustainable and profitable businesses.

Vincent is a success coach. What makes him different? Authenticity and reliability. What value do I give my clients? I believe in life time education and continuous learning. That is the reason I write, educate, coach, mentor, run seminars and consult in business, strategy, marketing and entrepreneurship.

In the next series we will dwell more on value proposition and how to do it successfully. I will also give living examples for clarity. 

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Vincent OgutuThis email address is being protected from spambots. You need JavaScript enabled to view it. MSc, Ph.D. entrepreneurship (ongoing) is a Business Coach, Author, Trainer and Mentor, working with entrepreneurs to improve their businesses and helps potential entrepreneurs start their business right, grow and succeed. He is a director of Advance Business Consultants.

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