When you are starting a business, this is the most important marketing question. Marketing experts will call it “Identifying your target market” but whatever you call it, the answer to this question will define your entire business and marketing strategy.
Let’s take a room for the night as an example. On offer are B&B’s offering rooms for £50, the likes of Premier Inn charging between £50 and £100, boutique hotels in tourist hotspots charging upwards of £150 per night, or a room at one of the hotels in Park Lane will possibly cost thousands of pounds per night. If you boil this down to the common denominator, all of these are a room for the night.
So, if you were offering a room for the night, whose pound note are you after? How would this influence the name of your business? How would this affect how your rooms are furnished? What other add-ons would you offer with your room such as a restaurant, a gym, a pool? What would your branding look like? What would your image and style look like? What would your communications sound like? Where would you offer your rooms for sale? How would your staff be trained? And…. how much would you charge for the room?
If you try to sell your product or service to everyone you will end up appealing to no-one. If your product is too expensive it will put some people off, if your product is too cheap it will put other people off. If your product has too many or too few bells and whistles it will put more people off.
So, you need to do some research and some test marketing. This doesn’t have to cost a lot of money. To start with you need to find out if there is a need in the market for your product or service. Be honest with yourself. Will someone pay for what you are offering? Look at similar products and services. Look at your potential competitors. Ask friends, family and colleagues for their opinions – they can often be your harshest critics – which is a good thing, because if you can sell your idea to them, then you might be on to something. The internet is a vast resource, and you can do a lot of research yourself with the caveat that you need to sanity check everything.
Another great source of information and advice are your professional advisers, such as your accountant, solicitor and insurance broker. Sorry, but before you get on to the more exciting aspects of launching a new business you really must take professional advice to protect you, your investment, and your idea.