Establishing a brand by defining customers and competition.
The building blocks of a small brand requires tracking trends, sourcing customer data and getting familiar with competitors.
Where can you get data about customer groups?
Research these eight sources to gather information on your target market:
1. Trade associations: Trade groups typically maintain data about market trends. Search for trade associations online.
2. Reference library: A good business reference librarian can be immensely helpful in finding what you’re looking for.
4. Focus groups: Get a group that represents your target market—whether that’s college students or moms—together for a short focus group.
- Gender, age, race and marital status: Targeting “women” as a market is too broad, because not all women behave the same way. You’ll need to research specific niches within broader categories. For example, married women behave differently than single women; moms behave differently than childless women.
6. Buying habits and behavior: What makes your target market buy? Where do they buy? (Online? In boutiques? In superstores?) What marketing tactics work best on them? How often do they buy your product or service and how much do they spend?
7. Market size: How big is your target market? Is it growing, or is it in decline? Find data for the past three years plus future projections. Targeting a market that’s shrinking is generally not a good idea.
8. Realistic market penetration: Just as important as the market size is how much of that market you can realistically hope to capture. This is where researching your competition comes in.
TRACKING TRENDS: What factors are shaping your customers' behavior?
The following sources will help you keep on top of trends:
- Newspapers: Since trends typically start in big cities and trickle down to other areas, read the leading newspapers from urban areas, such as The New York Times.
- Periodicals: Read the magazines your target market reads—whether that’s Road & Track or Tiger Beat—to keep up with what matters to them.
- Television: Popular shows are often good indicators of consumer trends. For example, the growth of cooking shows in the past decade has been matched by consumer spending on gourmet foods, home entertaining and tools for home cooking.
- Internet: Set up Google Alerts for topics you’re interested in, or visit Google Trends (www.google.com/trends) to see what the most popular searches are at any given time.
- Business model: What sales channels do your competitors use and how do they make money?
- Size: How big are your competitors? Will you be competing against other small businesses, national corporations or regional chains?
- Location: Are your competitors local, regional, national or overseas? Are they brick-and-mortar locations, or do they sell only online?
How profitable are your competitors? What are the average margins in your industry and among your specific competitors?
- Market strategy: How do your competitors position themselves? Are they businesslike or informal? Low-price leaders or premium products? Do they offer hand-holding service, or a do-it-yourself atmosphere?
- Features/benefits: What are the features and benefits of your competitors’ products or services?
How do they compare to yours?
- Price: What prices do your competitors charge? Do they offer discounting, bundling or subscription plans?
- Efficiency: How are your competitors staffed? How many employees do they have? Do they outsource work or work virtually? What kinds of overhead costs do they have?
Next- Knowledge of Competitors and Branding.
About the author
Marjorie Weber has been educating entrepreneurs and guiding them in their search for capital for the past 16 years: combining business training programs with one-on-one mentoring. Marj is currently a financial advisor for Florida SBDC at FIU. She was Chair of SCORE Miami Dade from 2010 to 2014. She also serves as an advisor to the Goldman Sachs 10,000 Small Business Program and the SBA Emerging Leaders Program and provides training for Veterans seeking an entrepreneurial path upon retirement from the service. She has been facilitating workshops under the auspices of Miami Bayside Foundation for the past 3 years. She commenced her career as a real estate investment banker in New York and Miami.She uses these long term relationships to assist her clients in accessing capital. She knows both the process and the people and has assisted in providing financing for hundreds of businesses in Miami Dade.