How To Segment A Target Market

PeopleOne of the tings a new business needs to focus on is determining who their target market is.  Although when most people think about a target market, most think of a consumer target market, like 25-35 year-old women.  A target market can be segmented in multiple different ways, not just demographically.  There are both consumer based segmentation as well as business based segmentation.

Lets take a look at a few ways to break out both B2C and B2B target markets.

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A Different Way To Use Demogaphics

demographicsLast Friday afternoon, I sat in a room with a group of entrepreneurs who were all talking about issues in their business that were seeking advice from other entrepreneurs.

One of the people in the group was talking about their company and discussed the expansion opportunities in their business and it was mentioned they looked at expanding into some “smaller” markets.  Even though the markets were smaller, there was a college presence in these markets, which seemed to be their initial target market.

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Is Big Data The End Of Market Research?

A few weeks back, I read a great blog from Edward Appleton, a European Consumer Insights Manager at a major Multinational company based in Munich, Germany.  In the article, he lays out the case that Researchers should not worry about losing out to those doing big data and analytics.

Before we get into my thoughts of this, lets get some definitions.  According to Wikipedia, “big data is is a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools.”  It usually includes data sets with sizes beyond the ability of commonly-used software tools to capture, curate, manage, and process the data within a tolerable elapsed time.  Right now, the amount of actual data can range from few dozen terabytes (1000 gigabytes) to many petabytes (1,000 terabytes) of data in a single data set.

Now back to my thoughts…
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Using Market Research To Replicate Restaurant Successes

Restaurant

Tom’s Restaurant in Manhattan was made internationally famous by Seinfeld

When a restaurateur has a successful restaurant, they typically want to open up another one.  Often times, the owner sets up a new restaurant similar to the previous restaurant.  Many times, the new restaurant has a similar type of food, atmosphere, and price range.  She may also place it in a similar type of location like in a shopping center.

One of the things that the owner may overlook is the success of the actual location and surrounding populations demographics and psychographics.  Here are some things to do some research on when looking at new locations for new locations.

  1. Get a clear understanding of the trade area: This is the geography that a typical customer will travel to come to your restaurant.  Most neighborhood restaurants draw customers from a one to five mile radius of the site.  However, unique concepts could draw from much further.  
  2. Match demographics and psychographics to the concept: Make sure that the trade area population can support the restaurant, financially and psychologically.
  3. Location, location, location:  This is always true regardless if you are setting up a new restaurant or buying a home.  For a restaurant, being near a strong residential population, a strong retail area with lots of traffic, and strong traffic generators such as movie theaters, hospitals, or a tourist attraction.

Unless you have a very unique concept, the success of most restaurants are heavily determined on its location and the daytime and residential population of the trade area.

–J. Nolfo helps companies understand their market and customers though a variety of market research strategies. He has over ten years of experience of market research for strategic planning purposes. He is the Director of Research at Rhino Market Research. He shares his thoughts about market research and business concepts with his blog “Pensare…Understanding Market Research in Business“. If you would like to discuss this blog or how J. can help you understand your market and customer needs, email him at jnolfo@rhinomarketresearch.com.

Looking Beyond Demographics

PeopleI always enjoy the opportunity to spread the word of how market research can help any business.  Last Friday, I had the opportunity to do it again.

During the conversation I was having, we started to talk about a restaurant that my friend is currently working with that is trying to figure out what kind of food the restaurant should serve.  The discussion quickly turned to the conversation of who lives in the area, in other words the demographic profile of the geographic area. Read more of this post

Segmenting To Understand Your Customers

segmentation Businesses need to understand their customers.  Now I know this is not an Earth shattering concept.  However, a number of businesses do not know who their customers are. And, in turn, they do not understand how to attract their customers.  By segmenting your customers, you can learn more about them and how to attract them.

I tell my retail and restaurant clients and potential clients that “birds of a feather tend to buy together.”  But in order to grow your customer base, you need to get a good understanding of who your core customers are.  To do this, you need to understand not only the demographic components of who your customers are, but also the psychographic components of who your customers.  Here are examples of each.

Demographic Components:

  • Marital status
  • Age group
  • Children
  • Household size
  • Location of residence

Psychographic Components:

  • Types of magazines read
  • How news is received
  • Activities participate in
  • Types of vehicles driven

Once you are able to understand your core buyer in both demographic and psychographic components, then you are can start to develop strategies to find more similar potential customers.

How have you segmented your customers?

–J. Nolfo helps companies understand their market and customers though a variety of market research strategies. He has over ten years of experience of market research for strategic planning purposes. He is the Director of Research at Rhino Market Research. He shares his thoughts about market research and business concepts with his blog “Pensare…Understanding Market Research in Business“. If you would like to discuss this blog or how J. can help you understand your market and customer needs, email him at jnolfo@rhinomarketresearch.com.

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