In the business world, each of us has a goal of making our product or service better in some way so that our target market will select us and even, be willing, to pay a price premium.
Marketing is telling our story to our target market. We can make changes in our products and services, but unless our target market understands the benefits, how our products and services will provide greater value to them, we will not gain market share.
Price, the cost of the service/product, is usually one of the first differentiators that comes to mind. Discounting has become almost common place and many purchasers are reluctant to pay full price. Getting into a price war may result in more sales, but the profit margin is lower and that can lead to a cut in the quality of the service/product.
Step back and look at a “target market”. Within that target market there are levels of “buyers”. For example, let’s take a look at the automobile business. Almost everyone needs a car for transportation so if we sell cars, then we can say that everyone is our target market. All cars will take us from point A to point B, however, not all cars sell at the same price. Cars are sold from under $10,000 to well over $100,000. Why did you buy the car you are currently driving? Why isn’t everyone driving the $10,000 car? What do you think are the benefits that the buyers of the more expensive cars are looking for? Answer these questions and then complete the following exercise:
- Define in a general category, your target market.
- Next divide your target market into three segments; those that you think want the lowest possible price for your product/service, those in the middle, and then those in the upper third.
- Start with the middle tier and list the reasons why you think this group would pay more than the first tier.
- Do the same with the highest tier; what extra benefits or values do you think motivates this group?
Unless you are in a very narrow niche market, there are more people in each of the three tiers of your target market than you could ever provide products or services to. Which of these groups would you like to target? Which has the highest profit potential? Now go back to your own marketing. Are you telling the story that that will attract your target group? In business, you can’t be everything to everybody. For whom do you want to be somebody?
If you market your product or service the right way, people will strive to find a way to buy your offerings.
Nick J. Petra Business Planning and coaching www.strategicduck.com I work with people that want to succeed, let me help you achieve your goals.
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