Choosing A Market

What is a market?

The basic definition of a market can be defined both in terms of geographic and or demographic.

When selecting a market there are several criteria that need to be considered:

1. What is the size of the market? Since not all buyers within a market will ever become consumers or customers is the market large enough to sustain a marketing approach for campaign? It is important to select a market size that that is sufficiently large to allow you to extract the amount of business from that market that you need to sustain yourself or your business. In rough numbers regardless of who you are, what you have to offer, how good it is, it will be very difficult to achieve more than 20% of market share in any product category or any industry and of that 20% only 20% of those will become a raving fans and ideal customers. Only 4% of any given market to will ever become your ideal type client therefore the market needs to be sufficiently large enough where that 4% represents enough business for you to reach your sales goals.

2. How reachable and how affordable is the market? If the cost of reaching the market is greater than the cost of potential gain in the marketplace obviously it makes sense not to try and penetrate that market. On the other hand, even if it is affordable to reach them if they’re not reachable or you can’t penetrate them from a marketing standpoint it makes no sense to try and go after that market.

3. Do the buyers in that market respond in a relevant way? Do they have a history of responding to marketing that would make sense for you to target them as a potential buyer? They may be reachable and it may be affordable to actually reach those prospects but unless they have some history of being responsive to marketing of your product or service or a similar product or service it doesn’t make a lot of sense to go after that market.

4. Has the market been proven viable by others? In other words, do you have comparables of this marketplace buying similar products and services that you sell and do these buyers have a history of buying competitive products and services that you sell? The easiest person to sell your product or service to is one who is already buying a similar product and service from someone else. If there is no history of the buyer or the marketplace ever having bought a similar product or service as yours then it may not make sense to try and penetrate the market.

5. Access to known buyers. Do you have access or is there a way for you to determine who has in fact bought similar types of product that you sell? If you have no access to the data and cannot determine who the buyers are then you may be wasting a lot of time and money marketing to people who have no proven track record of having bought similar products or services that you sell. On the other hand, if you can obtain data and a list of buyers who have bought similar products or services that you or your competitors sell then you have a buyer who is likely to buy again. The point is a buyer is a buyer and the best people to sell to are people who are already buying similar products or services. If you don’t have access to a mailing list of people who have previously bought the same or similar products and services that you sell then you need to do some homework and get one.

6. Are their unmet needs or desires in the marketplace? Is there a reason for you being there? Just because you have a product or service that you want to sell doesn’t mean that the marketplace is ready for what you have. Many businesses make the mistake of developing products and services and then spending their time trying to convince buyers to buy their product or service. That is a hard, frustrating and highly unprofitable. It is far more profitable to sell buyers what buyers want as opposed to selling them what you want them to buy.

7. Affinity – do you have an affinity or connection with this marketplace? Do you come from that industry, do you know anything about that industry, and do you have any experience in the industry? In short, how much do you know about that market? The greater the affinity or the greater the connection the more you’ll understand the needs and desires of that market.

8. What is the psychographic and demographic profile of those buyers? The more you know about the mindset of the buyer and the more you can get inside of their head and understand their motives for buying, their desires, their fears, and their hopes the more you will be able to craft a compelling message to the get their attention.

9. Is there a price point opportunity? Is there an opportunity to sell either a luxury version of what is already being sold or is there a market opportunity to sell a scaled-down version of what is already being offered or is there a place in the market for you to position yourself as an alternative to what is already being offered?

Why should you give so much thought to market selection?

The answer is really simple. It’s the difference between being proactive and reactive. To put it another way – if you do not define the market the market will define you. As an example, if you were the greatest snow shoe salesman that ever lived, and you had the greatest no shoe ever made, and you had the greatest price, and you were trying to sell snowshoes in Florida you would have very little success generating revenue. In that scenario, one of two things would happen: the first one is you would go out of business or if you were going to stay in business in the state of Florida the marketplace would dictate that you change the product that you’re selling. You could change and sell flip-flops or sandals or Crocs or any number of shoes that people would buy. In essence, the marketplace would make you change what it is you who are selling and how much you could sell them for.

The market you select and the list of prospects that you target are far more critical than the products or services you sell or the quality of the message you communicate. A great message communicated through a great media will fail if it is targeted to the wrong audience. A lot of marketers make the mistake of trying to market to people who have no interest in their product or service. The right message, however, targeted to the right audience via the right media produces phenomenal results.

How to Avoid Becoming Commoditized

Markets control price when your product or service is perceived as a commodity by the buyer. The marketplace will set the price point for any product category as long as the product is perceived as a commodity. The key to eliminating price as a buying decision is de-linking price from product and changing the perception in the marketplace of what it is you sell. In other words, make the comparison about your products and services versus the competitor’s products and services about apples to oranges comparison as opposed to an apples to apples comparison. One of the ways of doing that is bundling products and services into packages that cannot be separated or compared individually.

Types of Markets

There are two types of markets – generic and niche or sub culture. Each type has its pros and cons.

Generic Markets

The pros of generic marketing would be that it’s a big and obvious audience. It is easy to recognize and easy to target. The con of generic marketing would be the high cost of media in which you have to use to contact that huge audience. Additionally, the generic marketplace is crowded with 5 to 10 or more competitors vying for the business. It is cluttered with numerous companies communicating and confusing the buyers with different and conflicting messages that limit connectivity and add difficulty to connecting with a large diverse group of buyers that seemingly have nothing in common? As a result of having trying to connect with such a diverse group your message must be general and as a result loses a lot of power. Not a good thing.

Niche or Subculture Markets

Niche or subculture marketing also has pros and cons. A major con may be that the niche or subculture market may in fact be too small and unable to provide you with sufficient number of buyers for you to reach your sales goals. Another negative of niche and subculture marketing is that it requires an in-depth understanding of that niche or subculture. In other words, it can be thought of as tribal marketing. And in order to connect or penetrate with that subculture or that niche you have to have an intimate knowledge of that niche by either having been one of them or having been part of the tribe and having an insider view or knowledge. Lacking that insider knowledge or experience it can be a very difficult process of trying to connect with that subculture or that niche.

The pros of subculture or niche marketing would be that you can penetrate the niche or subculture with very limited resources. You can actually dominate in that subculture or that niche with very few marketing dollars. You would also have a profound media advantage because quite likely you would be the only marketer that would be trying to penetrate that marketplace. As a result, you would be able to craft your message in a very specific style that would allow you to communicate the message to the buyer that “this person understands me and this product or service is for me”. Niche marketing allows the seller the opportunity to craft a precision message that would precisely match the specific need or want of that market.

For most marketers there is indeed “riches in niches” and unless the marketer has very, very deep pockets and a very long time horizon that is where they should concentrate their marketing efforts.


One of my Friend Asked me to Read Your Article on “Choosing a Market”. Your Post is Well Written. Thanks . I love to Read Posts on “e-Business”.

Sheldon Smith

There is obviously a lot to know about this. I think you made some good points here.

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