Market-Research-Target2018-09-15T07:45:56+00:00

Market Research Guide
Investigating The Market
For A New Product


  1. Market Research
  2. The Target Market Segment
  3. The Competition & Market Trends
  4. Sales Channels & Required Margins
  5. Determining Product Price
  6. Sales Volume & Market Share
  7. Hurdles & Barriers To Market Entry
  8. Financial Planning & Analysis

2.  The Target Market:
Who Will Want Your Product or Service & Why?


An important thing to do at the very beginning of marketing research is to specifically decide what the target market segment is for your product. This will involve answering two basic questions:


What specific needs or wants of the customer will your product be satisfying?

Who are the specific customers you want to sell to (the target market segment).

Choosing a specific group of customers (selecting a target market segment) means identifying potential customers who possess certain characteristics that you have determined are related to the likelihood that the customer will want to buy your product. The characteristics may be demographic (age, income, sex, where they live, etc. . . ), lifestyle (athletes, book readers, travelers, etc. . . ), or something else. However, it is important that you identify what the characteristics of your potential customers are that will make it likely that they will want to buy your product. By being specific about who your most likely customers are, you will be able to focus your marketing and selling efforts on these customers, which will make finding and keeping customers easier than if you aren’t selective and don’t have a clear target.


When selecting a target market segment keep the following questions in mind:


Will The Potential Customers Want Or Need The Product?

Your customers should recognize that they have a need or want that your product can satisfy. If they don’t then you will have to spend time and money on activities that create the awareness in the customer (e.g. advertising campaigns). So it is better if you can identify a specific group of potential customers who already know they have a need or want for a product like yours.


Are The Potential Customers Ready To Buy The Product?

Customers often have multiple needs or wants in their lives, yet only so much time and money to try and address them. The need or want that your product satisfies should be a high enough priority for potential customers that they will be likely to buy your product. If their need or want isn’t strong enough then you may have to spend extra time and money trying to convince them that they should buy your product, over spending their money on another need or want of theirs.


Will The Potential Customers Know You Can Satisfy Their Need or Want?

Will potential customers know that you can deliver a product that can satisfy their needs or wants? Assuming that they are ready to buy a product like yours to satisfy their need or want, if they don’t know about your product, they will be unable to buy it. So your potential customers should be people who are well positioned to learn about your product. The harder it is to inform your potential customers about the existence and availability of your product, the more time and money you will need to spend informing them (e.g. through advertising).


Are The Potential Customers Willing and Able To Pay YOU?

There is no point in targeting customers who, while ready to buy a product as an answer to their recognized need or want, are unwilling or unable to pay the price charged for the product. Accordingly, the target customer should have sufficient funds (or income) to be willing and able to pay for the product. The target customer must also be willing to pay you for the product. If there is competition to address the need or want of the customer that your product aims to satisfy, and there often is fierce competition, the potential customer will have to see a reason to buy the product from you. This means that potential customers must be able to distinguish your product from the competition (maybe it has better features or a better price), and also trust your ability to meet their expectations and provide good customer service.


Previous Guide Section
Next Guide Section


Market Research Guide
Investigating The Market
For A New Product


  1. Market Research
  2. The Target Market Segment
  3. The Competition & Market Trends
  4. Sales Channels & Required Margins
  5. Determining Product Price
  6. Sales Volume & Market Share
  7. Hurdles & Barriers To Market Entry
  8. Financial Planning & Analysis

2.  The Target Market:
Who Will Want Your Product or Service & Why?


An important thing to do at the very beginning of marketing research is to specifically decide what the target market segment is for your product. This will involve answering two basic questions:


What specific needs or wants of the customer will your product be satisfying?

Who are the specific customers you want to sell to (the target market segment).

Choosing a specific group of customers (selecting a target market segment) means identifying potential customers who possess certain characteristics that you have determined are related to the likelihood that the customer will want to buy your product. The characteristics may be demographic (age, income, sex, where they live, etc. . . ), lifestyle (athletes, book readers, travelers, etc. . . ), or something else. However, it is important that you identify what the characteristics of your potential customers are that will make it likely that they will want to buy your product. By being specific about who your most likely customers are, you will be able to focus your marketing and selling efforts on these customers, which will make finding and keeping customers easier than if you aren’t selective and don’t have a clear target.


When selecting a target market segment keep the following questions in mind:


Will The Potential Customers Want Or Need The Product?

Your customers should recognize that they have a need or want that your product can satisfy. If they don’t then you will have to spend time and money on activities that create the awareness in the customer (e.g. advertising campaigns). So it is better if you can identify a specific group of potential customers who already know they have a need or want for a product like yours.


Are The Potential Customers Ready To Buy The Product?

Customers often have multiple needs or wants in their lives, yet only so much time and money to try and address them. The need or want that your product satisfies should be a high enough priority for potential customers that they will be likely to buy your product. If their need or want isn’t strong enough then you may have to spend extra time and money trying to convince them that they should buy your product, over spending their money on another need or want of theirs.


Will The Potential Customers Know You Can Satisfy Their Need or Want?

Will potential customers know that you can deliver a product that can satisfy their needs or wants? Assuming that they are ready to buy a product like yours to satisfy their need or want, if they don’t know about your product, they will be unable to buy it. So your potential customers should be people who are well positioned to learn about your product. The harder it is to inform your potential customers about the existence and availability of your product, the more time and money you will need to spend informing them (e.g. through advertising).


Are The Potential Customers Willing and Able To Pay YOU?

There is no point in targeting customers who, while ready to buy a product as an answer to their recognized need or want, are unwilling or unable to pay the price charged for the product. Accordingly, the target customer should have sufficient funds (or income) to be willing and able to pay for the product. The target customer must also be willing to pay you for the product. If there is competition to address the need or want of the customer that your product aims to satisfy, and there often is fierce competition, the potential customer will have to see a reason to buy the product from you. This means that potential customers must be able to distinguish your product from the competition (maybe it has better features or a better price), and also trust your ability to meet their expectations and provide good customer service.


Previous Guide Section
Next Guide Section