Planning Your Marketing

2. The Market

Understanding the market allows you to target promising segments which suit your strengths.

2.1 Who are the users of products like yours?

• Divide them into different categories to help you spot the best opportunities. For example, a pet products company might use three levels of segmentation: pets generally, type of pet (eg dog), and breed (eg labrador). The corresponding products are feeding dishes (for all pets), dog leads and a labrador DVD.

2.2 What do the users value most in products like yours? How do they choose between different suppliers?

2.3 How can you reach the customers? Or, put another way, how do your customers purchase your product?

• The obvious channels might include direct sales, wholesalers, retail, agents and distributors, and the internet.
• Consider alternative channels and influencers. For example, one accounting software company built its success on using the accountancy profession as a channel to reach smaller businesses.

2.4 What size is the market? Is it expanding or declining? What are the key trends?

• Be realistic. For example, the market for a high street shop is probably restricted to people who already visit the town centre.

2.5 What is the competition doing?

• Profile your competitors and their products. Ask their customers why they prefer the competitor's products to yours.

2.6 What other factors influence your business environment?

• For example, government expenditure, imports or new technology.