Free Start Your Own Business by Inc The Staff of Entrepreneur Media Page B

from a retail store, your target market is consumers; if you are selling office supplies, your target market is businesses (this is referred to as “B2B” sales). In some cases—for example, if you run a printing business—you may be marketing to both businesses and individual consumers.
    No business—particularly a small one—can be all things to all people. The more narrowly you can define your target market, the better. This process is known as creating a niche and is key to success for even the biggest companies. Walmart and Tiffany are both retailers, but they have very different niches: Walmart caters to bargain-minded shoppers, while Tiffany appeals to upscale jewelry consumers.
     
    WARNING
     
    Even though many baby boomers are now over 50, don’t make the mistake of marketing to them the same way you would to seniors. Boomers don’t think of themselves as “old” or “seniors.” The moral? The same marketing approaches that appealed to boomers when they were 30 will appeal to them when they’re 50, 60 and 70.
    “Many people talk about ‘finding’ a niche as if it were something under a rock or at the end of the rainbow, ready-made. That is nonsense,” says Lynda Falkenstein, author of Nichecraft: Using Your Specialness to Focus Your Business, Corner Your Market & Make Customers Seek You Out. Good niches do not just fall into your lap; they must be very carefully crafted.
    Rather than creating a niche, many entrepreneurs make the mistake of falling into the “all over the map” trap, claiming they can do many things and be good at all of them. These people quickly learn a tough lesson, Falkenstein warns: “Smaller is bigger in business, and smaller is not all over the map; it’s highly focused.”

Practicing Nichecraft
     
    Creating a good niche, advises Falkenstein, involves following a sevenstep process:
    1. Make a wish list . With whom do you want to do business? Be as specific as you can: Identify the geographic range and the types of businesses or customers you want your business to target. If you don’t know whom you want to do business with, you can’t make contact. “You must recognize that you can’t do business with everybody,” cautions Falkenstein. Otherwise, you risk exhausting yourself and confusing your customers.
    These days, the trend is toward smaller niches (see “Direct Hit” on page 75). Targeting teenagers isn’t specific enough; targeting male, African American teenagers with family incomes of $40,000 and up is. Aiming at companies that sell software is too broad; aiming at Northern California-based companies that provide internet software sales and training and have sales of $15 million or more is a better goal.
    DIRECT HIT
     
    O nce upon a time, business owners thought it was enough to market their products or services to “18-to-49-year-olds.” Those days are things of the past. According to trend experts, the consumer marketplace has become so differentiated, it’s a misconception to talk about the marketplace in any kind of general, grand way. You can market to socioeconomic status or to gender or to region or to lifestyle or to technological sophistication. There’s no end to the number of different ways you can slice the pie.
     
     
    Further complicating matters, age no longer means what it used to. Fiftyfive-year-old baby boomers prefer rock ’n’ roll to Geritol; 30-year-olds may still be living with their parents. People now repeat stages and recycle their lives. You can have two men who are 64 years old, and one is retired and driving around in a Winnebago, and the other is just remarried with a toddler in his house.
     
    Generational marketing, which defines consumers not just by age, but also by social, economic, demographic and psychological factors, has been used since the early ’80s to give a more accurate picture of the target consumer.
     
    A more recent twist is cohort marketing, which studies groups of people who underwent the same