A market in its entirety is too
broad in scope for any but the largest companies to tackle successfully.
The best strategy for a smaller business is to divide demand into
manageable market niches. Small operations can then offer specialized
goods and services attractive to a specific group of prospective
buyers.
There are undoubtedly some particular products or services you
are especially suited to provide. Study the market carefully and
you will find opportunities. As an example, surgical instruments
used to be sold in bulk to both small medical practices and large
hospitals. One firm realized that the smaller practices could not
afford to sterilize instruments after each use like hospitals did,
but instead simply disposed of them. The firm's sales representatives
talked to surgeons and hospital workers to learn what would be more
suitable for them. Based on this information, the company developed
disposable instruments which could be sold in larger quantities
at a lower cost. Another firm capitalized on the fact that hospital
operating rooms must carefully count the instruments used before
and after surgery. This firm met that particular need by packaging
their instruments in pre-counted, customized sets for different
forms of surgery.
While researching your own company's niche, consider the results
of your market survey and the areas in which your competitors are
already firmly situated. Put this information into a table or a
graph to illustrate where an opening might exist for your product
or service. Try to find the right configuration of products, services,
quality, and price that will ensure the least direct competition.
Unfortunately, there is no universally effective way to make these
comparisons. Not only will the desired attributes vary from industry
to industry, but there is also an imaginative element that cannot
be formalized. For example, only someone who had already thought
of developing pre-packaged surgical instruments could use a survey
to determine whether or not a market actually existed for them.
A well-designed database can help you sort through your market
information and reveal particular segments you might not see otherwise.
For example, do customers in a certain geographic area tend to purchase
products that combine high quality and high price more frequently?
Do your small business clients take advantage of your customer service
more often than larger ones? If so, consider focusing on being a
local provider of high quality goods and services, or a service-oriented
company that pays extra attention to small businesses.
If you do target a new niche market, make sure that this niche does
not conflict with your overall business plan. For example, a small
bakery that makes cookies by hand cannot go after a market for inexpensive,
mass-produced cookies, regardless of the demand.
|