No business can satsify every type of customer and if the Company tries, it will be overwhelmed into failure. When selecting your Company’s target markets for your business plan, it is important to be as specific as possible. You may have a number of target markets, although it is not recommended to have more then 5. The target markets should be categorized specifically by their demographics. For example, if you plan to open up an expensive precious stone jewelry store, your first target market may be women, aged between 35 and 60, who have an annual household income above $150,000. The second target market would be these women’s husbands as they will be buying gifts for their wives.
When writing about your target markets in your business plan, be sure to state the demographic specifics for each group. It is important to analyze the market within your geographic reach rather then look at national statistics. For example, if you would like to open the jewelry store in Stamford, CT, you should go to the public library and request statistical information about women and men who live in Stamford, or surrounding areas.
When analyzing your target markets in your business plan, be sure to include the following:
- What is the size of your target market? (For example, there are 1,500 families in Stamford who make an annual household income above $150,000 where the wife is between the ages of 35 to 60 and the familiy consists of a married couple and 1 to 3 children. )
- What is your demographic reach? (For example, if the store is in Stamford, you may also target individuals who are from surrounding towns such as Greenwich, New Canaan and Darien.)
Being specific about your target markets will help determine the most appropriate methods of marketing.