What is a Hot Target Market?

A target market is the market segment or in other words the smaller group of a larger market that a product or service is marketed to. It is usually defined by age, gender and/or socio-economic grouping.

As an example let us take a look at golf clubs. This is a small section of the sport of golf which is a market segment of the sports industry. We then would try to define who would purchase golf clubs by age, gender and income level.

Now that we define the market segment we would ask some questions such as how much disposable income do most golfers have? What ages are more apt buy the clubs and how much does each age buy and spend on golf clubs? Are men or women more apt to buy golf clubs?

Finding a Hot Target Market

Sometimes hot target markets are right under your nose and other times you can create one by finding a need and filling it. Here are some research ideas.

* Find an Industry

* Check Industry Growth Potential

* Break the Market Segments Down

* Define Your Potential Customers

* Market Maturity (Saturated or Not)

* Research the Manufacturers, Vendors and Distributors

* Will it fit my Life Plan?

Find an Industry

What industry interests you? Find the industry that you are most interested in and then focus your attention to as much information as possible within that industry. What are the pros and cons of the overall industry? What type of market segments can be broken down?

Is there Industry Growth?

As a whole is the industry on the rise, holding its own or losing market strength? Are new products or technology coming into the industry? How will that affect your market segment?

Break it Down

Now that you have an industry, let us break it down to all of the market segments within that industry. Keep breaking it down until you find one that matches your interests.

Define your Customer

Within the target market who would be your customers? Do they have the money to make this segment capable of sustaining a new small business startup? If so, how much do they spend on this targeted segment? Is it essential to have the product or service? Is it a large segment of the population that uses these items?

Market Maturity

How many competitors are already in your target market? Are they making a profit? Are the businesses growing, consolidating or closing? Is the competition so severe that your will not be able to make a comfortable profit? What volume of sales will you need to be profitable?

Research the Manufacturers, Vendors and Distributors

Who are the movers and shakers in the industry? How many are there and what are the standards for distribution within that industry? Check out my article about how to find manufacturers and the questions to ask once you have made a decision on what your “hot target market?is.

Does it fit My Life Plan?

What are my goals and desires personally and business wise? Does the research you have done fit into your life plan and will the target market be a good fit for a small business startup? If so you are ready to get started!