The Target Market Analysis Research Paper

(Level 1 heading in your Business Proposal)

Geographic Location (level 2 heading)

Target Market (level 2 heading).

Competition (level 2 heading).

Unmet Customer Need (level 2 heading).

Competitive Advantage (level 2 heading).

Note: if you choose additional sub-headings (levels 3-5) ensure APA format is followed. Past students have chosen to add a S.W.O.T. analysis etc.

Break down and Instructions: All the information below is to be researched and cited (use APA). Remember, you are researching this information but you are NOT writing a research paper/section. Let’s begin, two primary components are the target market (the consumers for your product/service) and Geographic location.

Geographic Location Identify a Geographic Location (ex: Half Moon Bay Business District).

Why was the location selected? Research and provide data. For example, Is

your service or product not provided in this area?

Target Market.

Research and provide the below data.

What do you know about your target market?

Start with these questions. Provide the researched and cited data in a narrative, no bullets

or direct quotes. All cited information must be paraphrased and entered on the reference

page for verification. All cited information must be between 2015 and 2019.

Who are your potential customers?

Where are they located?

How large is your target market?

What are the needs and wants of your target market?

What criteria do they use in making their buying decisions?

Use commerce site

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Use your reading about geographic location to describe, Not Explain, that this is a good location.

The description of your target market should be very specific. Are your potential customers individual consumers, businesses or both? If your target market is consumers, what is their demographic profile: gender, age range, income range, education, etc?

If your target market is businesses, what type are they – retail, manufacturing, construction, etc.? Where are they located? What size are they in terms of employees?

Be realistic in estimating your geographic market area and the number of potential customers. If you own a neighbourhood convenience store, for example, you will attract customers from a limited geographic area.

However, if you operate a speciality furniture store, you will draw customers from a much larger geographic area. Businesses that have an Internet presence have the potential for vast geographic coverage.

If your target market is individuals, demographic data from the U.S. Census can help you in estimating the number of potential customers in your geographic market area. Consult www.census.gov.

The most critical step is to understand your customer’s needs and to meet those more effectively than the competition. Constantly focus on the customer and what he/she needs and wants to buy, not what products or services you need or want to sell. You must put your personal preferences aside!

Examples of customer needs that you might serve include convenience, education, recreation, safety and concern about personal health or appearance.

Businesses that meet the customer need for convenience, for example – very popular in our hectic world – include fast food restaurants, drive-through car washes, errand services and same-day photo processing or dry-cleaning services.

Customer needs and wants are related but not synonymous. The wants are the customer’s personal desires for satisfying their needs. For example, all adults have a need for recreation, but if three individuals each had $20 to meet their need…

One may want to go out to dinner.

One may want to go to a movie.

One may want to go shopping.

Also, you must determine what criteria are important to your target market in making buying decisions. Specifically ask potential customers when you do your market research; don’t make assumptions!

Competition In general, learn as much as you can about your target market. The better you understand your potential customers, the better your chances of success in meeting their needs more effectively than your competition.

Describe all competition Provide narrative for all the following:

Who are they?

Where are they?

What products/services do they offer?

How are their products/services priced?

What are their strengths and weaknesses?

How do they promote/advertise their businesses?

In identifying your competition, keep in mind two key points:

Your competition may be located outside your geographic market area.

For example, a women’s clothing business competes with similar local businesses plus Internet businesses, mail order companies and out-of-town factory outlets.

Your competition is any business that serves the same customer need for the same target market.

For example, a miniature golf course competes with other courses plus other businesses that serve the customer need for recreation for adults and children in the same geographic market area. Therefore, competition may include movie theatres, bowling alleys, roller skating rinks, etc.

The competition’s strengths and weaknesses are also known as competitive advantages and competitive disadvantages. A competitive advantage is any characteristic of the product or service that makes it more appealing to potential customers than what the competition is offering.

Conversely, a competitive disadvantage is a characteristic that makes the product or service less appealing. Realistically, every business has both competitive advantages and disadvantages – including yours!

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Minimum 5 competitors

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A narrative for each competitor (all 5)

Examples of competitive advantages include quality, variety, uniqueness, convenience, performance and price. Examples of competitive disadvantages include lack of name recognition, poor location and limited distribution.

Again, learn as much as possible about your competition to improve your chances of success.

Unmet Customer Need

Your goal is to find an unsatisfied customer need in your line of business in the geographic area that you want to serve. This is called a market niche.

If you discover that the customer need is being adequately met by the existing competition, you can consider a different line of business and/or a different location, or you may decide against self-employment.

Competitive Advantage

What will make your business successful?

Based on what you know about your target market and the competition, you choose a position in the competitive environment. This decision-making process is called positioning.

To attract customers, you must offer them a reason to choose your business to meet their needs. This reason is called your competitive advantage. Be aware that you may have more than one competitive advantage. For example, you might position your business to attract customers based on both your convenient location and unique services.

Example:

Glenna Brownell is interested in starting a retail store that offers used household goods, such as furniture, dinnerware and accessories. Based on research, Glenna determines that quality and price are key factors used by her target market in making their buying decisions.

She researches the competition and learns that there are six antique stores in her geographic market area that offer high-quality used merchandise at high-end prices.

Also, she finds three competitors – thrift stores, flea markets and garage sales – that offer low-quality, low-priced goods. Based on what she knows about her target market and competition, Glenna positions her business to meet the customer need for medium-quality, medium-priced merchandise.

This is her market niche, or unique place in the competitive environment. Therefore, her competitive advantages are her niche strategy plus the location she chooses near the

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What can you find (research) as to why customers are not satisfied with the current market (the market you chose)?

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Competitive Advantage CANNOT be your low price alone. You must examine what your competition closely. successful antique stores that are investing time, effort and money to attract her target market.

A common mistake is to assume that price is the key factor used by potential customers in making buying decisions, but this is often not true. For example, when shopping for speciality services, such as child care or auto repair, customers are typically more concerned about reputation, quality and reliability.

Try to avoid these common errors in positioning your business:

• Not choosing a competitive advantage at all
• Don’t assume If I build it, they will come. You must provide motivation by offering your potential customers an appealing competitive advantage.
• Basing your decisions about your competitive advantages on assumptions about your target market and competition rather than solid research
• Not being honest and realistic about the competitive advantages and disadvantages of your own business
• Choosing an inappropriate competitive advantage. Your decision should be based on two considerations: (1) what competitive advantages are important to your potential customers and (2) what competitive advantages are being offered by your competitors. Look for a gap or niche.
• Failing to aggressively and consistently promote your competitive advantages to your potential customers in all of your marketing messages – business card, brochures, website, ads, etc.

For example, Apple Computer’s 2017 mission statement is: “Apple designs Macs, the best personal computers in the world, along with OS X, I Life, iWork and professional software.

Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad.”

Do not mimic the objectives above. Use the parameters for objectives as discussed in class.

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