Studying the target market: an eye on competitors
We have reviewed the variables (demographic, firmographic etc.) to be taken into account when segmenting a market.
We have then looked at the requirements (measurable, accessible etc.) that a segment must possess in order to be selected.
However important these elements are, they are not the only ones to be taken into account: an eye must be kept on the competitive scenario.
Who are my competitors? What do they offer that I don’t? How am I better? These are all questions that every company must answer before implementing its strategies.
It is not enough for a segment to be easily identifiable and reachable; our company must also be able to stand out within it.
Let us return for a moment to the company specialising in industrial oils that we mentioned.
After having identified a niche consistent with the offer, the management should ask itself who the competitors are and what characterises their products.
For example, they may have certifications that our company does not have, thus putting us at a disadvantage despite the high quality of its lubricants.
A complete market analysis can anticipate possible problems and help to make the necessary improvements.
How to do it properly?
Selecting your niche with the help of technology
A great help in this respect comes from digital technologies.
Artificial Intelligence allows us to analyse thousands of pieces of information from different sources in a matter of minutes, selecting only the most important ones.
This makes it easier to process the masses of data that even companies are flooded with every day.
This principle of Big Data Analysis can also be applied to the choice of market niche and the analysis of competitors.
How many competitors are there? Where are they located? What do they sell? What characteristics do my ideal customers in a certain area have? What are their goals and interests?
Answering these and other questions today is automatic thanks to solutions that combine databases and AI algorithms.
In the B2B arena, the application of such technologies allows you to focus on very specific niches, identified for example through industry codes, and then study the online presence of companies to understand exactly what they do and what their characteristics are.
Selecting the target market: conclusions
As we have seen, the selection of the target market involves several steps and has a decisive influence on business activity.
First, the target segment must be identified, choosing it on the basis of variables that are consistent with our product or service (for example, the age of consumers or the turnover of a possible client company).
Next, we need to check that the segment has the 5 characteristics of the Kotler and Armostrong model, so that it is manageable with the resources available to the company.
Finally, competitors and their strengths must be assessed to develop strategies to cope with their presence or, alternatively, to move towards different market segments.
Analyses carried out using new technologies facilitate this process, allowing time and costs to be cut and providing a quick overview of one’s target market.