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.
