you will describe who are your typical customers

Effective marketing is the hallmark of a successful business. Its absence means the business will fail. If it is that important, you cannot leave it to chance. You must

plan how to do marketing effectively.

How Marketing Fits Into Your Business Plan

Your Business Plan is the first place you actually write down those random thoughts about marketing, so you

and others can see the logic and the holes. Once you figure out the marketing, then you can estimate its cost,

and include that in your financial section.

But before you can figure out the marketing, you need to know who are you going to be selling to. Groups of likely prospects are called your “target market.”

Describing “The Market

To describe the Market, you first talk about industry (i.e. all your competitors) sales volume in units and dollars for your target area. Include the sales growth rate. Describe the customer groups (segments) who make those purchases: their demographics, any other characteristics such as interests or how often they buy, and how many there are in the area. Seasonal ups and downs are also mentioned here.

Next you discuss trends that might change those industry sales figures, or change the ways customers are solving the problem that your product addresses. The acronym DPEST reminds you what trends to think about: Demographic, Political/regulatory, Economic, Socio-cultural, Technological. When you mention a relevant trend, you will of course say why it is relevant – how it is affecting the current or future market for your product. Your goal is to show that the trend is helping your success – you are consistent with it, not fighting it.

Then you choose the primary segment you will be selling to, and up to two secondary segments. This is your target market. Describe your typical customer in each of your target segments. Example: “he or she is (how) old, has x education and y income, family status is z, lived in the area for a years, is interested in b, c, and d, and values e, f, and g enough to spend q dollars on them annually.” Now estimate how many of those target customers live in your selling area, using the sources in the reference above.

Why bother to identify a target market? Why not sell to all? Effective communications and economical generation of “sales leads” both depend on targeting an audience that has some specific characteristics. These audience characteristics drive the design of your communications plan, the features of your product, your price, and where you sell. You want to spend marketing money reaching those most likely to buy, and buy a lot, and often, not the long shots! So targeting is critical to controlling the marketing budget. It is also critical to crafting a message that is effective by speaking directly to the needs of a specific group of customers.