Establishing Target Market Data for business plans
In my career I have seen everything from highly focused and detailed market definition and sizing to finger in the air generic statements of the target market. If we understand correctly the driver/reason we want to define and quantify a target market, then perhaps we can strike the right balance of effort and cost versus usefulness and accuracy of target market definition. I am considering this subject matter from the position of preparing a credible business plan or business case for 1. Making a decision to proceed (perhaps also related investment decision) 2. Providing clarity and direction for market and sales development initiatives. Let us get some clarity around some terms that are used relating to markets.
Target Market: Is often the general term used to provide a high level communication to stakeholders as to where you may find customers and where you intend to do business. It may be defined descriptively in terms such as, Geography, Demographics, Technology, Buyer types and general macro-economic descriptors, and/or in terms of numbers such as Macro & Micro economic terms such as Numbers of companies of a specific Size, Revenues, Trends , Employees, Performance broken down into specific segmentation based on other variables.
Addressable Market: is that refined market definition where our advantage gives a compelling reason to the customers in that defined market to purchase our product Continue reading