Choosing The Right target groups

When it comes to developing marketing plan, target groups are of the utmost importance. In this text I will explore, in one practical example, how to choose target market.

Main target group of the Project, and thus of the Marketing Plan, are SMEs.
It is important to understand what the SME market comprises. SMEs occupy all sectors of the economy, are started for different reasons, vary in their modus operandi and perform very differently: in other words, they are not a homogeneous category easily addressed by any one-size-fits-all approach. Understanding the specific context of businesses, their sector, strategic position and internal structures and pressures is important in underpinning an effective engagement strategy for support institutions, such as technology brokers. In mapping out the heterogeneity of SMEs, it is also useful and important to draw upon the experiences of other private and public sector organizations attempting to reach SMEs and build upon these.

Goal of this chapter is to identify main market segments and their characteristics, to identify stakeholders of high importance to those segments, and to devise means of communication with selected SMEs.

Having in mind heterogeneity of SMEs, for the purpose of this document, we propose segmenting SMEs based on four broad types of classification:

1. The personal characteristics of the individual involved or being targeted (experience, personality, motivation, education, age...)
2. The characteristics of the business (size, stage of development, type of entrepreneurial activity, performance, economic sector, industry sector, location...)
3. The activities and processes undertaken within and by the business (market development, business functions, information technology, support used so far...)
4. The specific needs of the business (specific problem, particular crisis, identifiable opportunity...).

This leads us to six segments that share similar characteristics, needs, preferences and behaviors. These are shown in Table below. Given these segments, key questions arise regarding the target audiences for support and means of service delivery. Identified segments show that the client-base has the potential to be broad, ranging from pre-starts through to growth businesses.

Pre-starts

Any individual seriously thinking of starting a business.

Needs
Emotional encouragement to develop ideas; understand the benefits and downsides of setting up; understand what support is available and where and how to access further support.

Start-Ups

Individuals that have made the decision to set up in business are in the process of setting up in business or have just recently set up in business. Businesses up to 24 months old.

Needs
Understanding what they need to do, how best to access/make use of business support, and how to minimize the impact and management of rules and regulations.

Lifestyle

Owner managed businesses with little aspiration to grow above levels that maintain their relative position in the market. People motivated to be in business in order to be their own boss and in control of their lifestyle.

Needs
Improve the effectiveness of their business operations through understanding and implementing best practice and finding ways to improve their compliance and management of rules and regulations.

Growth

Owner managed businesses with the ambition to grow above levels that maintain their relative position in the market.

Needs
The challenges as they evolve from taking on new employees, developing leadership capabilities and locating additional funding etc and in addition to the other challenges of managing rules and regulations that other businesses across the owner/manager segment face.

Steady State

Team managed businesses unwilling or unable to grow above levels that maintain their relative position in the market. Includes companies growing moderately (within the confines of their existing capabilities or overall market growth), as well as those with level or declining sales/profit.

Needs
They are interested in managed growth rather than fast growth. They are looking at safe ways of progressing such as implementing best practice but can be prone to complacency.

Corporate Growth

Team managed businesses growing or forecasting rapid growth in sales and/or profits above levels that maintain their relative position in the market. May be trailblazing innovators and market leaders with significant growth aspirations.

Needs
Growth for these businesses quite often means significant and innovative change. These businesses are looking for help in navigating the system (planning regime) and in accessing new markets.