Question

Topic: Strategy

How To Define A Primary Target Audience

Posted by Natalie on 2/12/2012 at 6:59 PM ET 125 Points
Hi,

I am in the planning stages for bakery in a suburb between Denver and Boulder, CO. I want to deliver high quality cakes, cupcakes, muffins, and pies using simple ingredients you can pronounce and spell. The only baked goods within a 7 mile radius of me are in grocery stores or franchise locations like Starbucks and Panera. My main advantage is that mine are just better, although I will try to put that more elegantly later.

I'm going through the Small Business Series on this site and it seems my first step before picking a position, name, tagline, etc. is to define my target audience. I know I should be able to better define this with market research, but I'm not sure what questions to ask. I believe my area is dominated by suburban home-owners with household incomes over $75,000, predominately white, with females purchasing making most of the baked goods decisions. Do I want to just use market research to confirm if I'm off anywhere? Is that specific enough for a primary target audience? I obviously want anyone in my area to buy the goods, and another potential biggie is individuals buying muffins or cupcakes for their work meetings. I don't want to not include them...

What research do I need to do to define my true, primary audience?

Thanks for any help,
Natalie
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RESPONSES

  • Posted by mgoodman on 2/12/2012 at 7:57 PM Accepted
    You might want to find out how many of these white, female homeowners work outside the home, how/when they purchase baked goods, for whom, and how they make the decision (of when to buy and where to buy).

    What other brands do they buy (in other categories)? Where and how do they typically learn about new stores or businesses in the area? What newspapers and/or magazines do they read and trust? What websites to they trust/visit often?

    You're asking the right questions. Maybe a next step is to actually talk to some of the people in your target audience and find out how they think, how they make purchase decisions about food products, what makes them tick.

    After some general questions, you can even show them a concept statement for your business and ask them how likely they would be to try something like this? Why? Why not? What in the concept statement did they find particularly interesting/appealing? What, if anything, raised questions in their minds.

    Ideally you would canvass a large representative sample of the target audience, but that could get costly. Start with, say, 20-25 individuals and see if you think you're getting some good (and useful) input. Maybe you can short-cut some of the research. (Depends on your own risk-tolerance profile.)

    It might be worth a brief consultation with a market research professional for guidance, if you don't feel like you're ready for this yourself. (I can provide a recommendation if you need one.)
  • Posted by Natalie on 2/12/2012 at 8:19 PM Author
    Thanks mgoodman - I can certainly find 20-25 people to talk to and those are all good suggestions for additional market research. But I feel like that is kind of assuming that my target market is indeed white, female home-owners who I can get to know better - do they work outside the home, frequently buy baked goods, etc. I guess my main question is how do I know that is the right target? I stated my gut assumptions, but I really have no data to back that up. How do you initially find out who your target market *should* be? For example, maybe my target market should actually be 30 something singles who buy two dozen muffins for meetings on their way to work. How do I find out which of these groups (or maybe some other group I haven't even thought of) should be my primary market?

    BTW - thanks very much for Small Business Series, I'm finding it very helpful in forcing me to think more analytically about my project!
  • Posted by CarolBlaha on 2/13/2012 at 8:30 AM Accepted
    Your making progress. The stats you originally had were just demographics of the area, not your target.

    To expand on your last post. I used to live in the area and worked in sales but nowhere near 30 anything. Sales people are always looking for quality products to bring to our breakfast meetings. So define breakfast meetings as the target and work backwards. How do you establish yourself as the go to person for breakfast meetings?

    I'd also compare yourself to competition in the area. I'd add Rudi's to your list, which is very well received for meetings. Panera opens too late to be a choice for breakfast meetings. Starbucks only has a few of each pastry, I never used them for that reason. Look also how Rudis has their product in stores. Independent coffee shops mostly don't bake their own pastries, but buy from someone locally. That could be another niche for you.
  • Posted by Jay Hamilton-Roth on 2/13/2012 at 9:01 AM Accepted
    If your products are "just better" then you need to find people that are willing to change their routine/route to eat at/get food from your bakery. Franchise locations may be ultra-convenient for many of your target audience, and it would take something special to break them out of their habit.

    Your primary market should be people you can "reach", who would align with your goals (ingredients/taste), who have regular disposable income, and are geographically "desirable". There's nothing wrong with picking one demographic, and doing the work to test how likely they'd be to (repeatedly) try your bakery.

    Unless you name your bakery, "The White Female Homeowners' Bakery" it's likely to attract other groups as well. Just make sure that the primary group you're focused on attracting will reward your efforts. In doing so, you'll naturally attract other groups as well.
  • Posted by Natalie on 2/13/2012 at 10:03 AM Author
    OK so I think I understand. For a target market I really need to just pick it (i.e. guess), then do the market research to make sure there is enough of this group in my area that are willing to buy my product, and figure out what would make them buy my product so I can get the positioning right.

    So if I want to target suburban moms buying cupcakes for parties, I have to research and make sure there are enough of them around, and find out what would make them willing to spend extra and go out of their way for something different. If I want to target business people, I can -- I just have to go through the same exercise. Basically there is no right or wrong target market, so long as the market is there.

    Assuming I got the above right, is it wrong to pick more than one target market? To Carol's point, my plan is to actually try to get a few wholesale customers first so that I have some standing orders before I sign a big lease (I currently rent a kitchen part time). So I know this is my first target market and is very different from the retail target.

    But is it wrong to have two primary retail target markets? I would like to target the suburban moms as mentioned, but I would like to also take menus to the many local businesses around here to get orders for meetings -- these would likely be delivery orders. Is it ok to pick both as primary target markets, profile both, market to both separately....or is that asking for trouble?

    Thanks again for all the help -- I am studying like mad, but this is pretty much all new to me. I can't explain how helpful it is to have guidance!
  • Posted by CarolBlaha on 2/13/2012 at 10:21 AM Member
    Its not wrong at all to have mulitple niches. In fact, its a good plan not to put all your eggs in one basket.

    As in my post, I explained why Panini and Starbucks aren't suitable for the breakfast meeting. Start doing similar exercises with other competitors. Know your competition inside and out, and do a SWOT on them. Learn from them. And you may find your answers will bubble up to the surface.

    There may be no "wrong" market, but you may find markets you just don't want to be in. This could be because the market is saturated, or maybe not profitable for you to reach. You may get business still from these markets, but they won't be your sweet spot. Know your sweet spot and spend the majority of your marketing time and money being lazar sharp in targeting them.
  • Posted by Peter (henna gaijin) on 2/13/2012 at 12:12 PM Accepted
    It is hard to get real data. Lots of good ideas above, but may be hard to fill them.

    You could take a simpler look at just what are the demographics of the town you are in and neighboring towns. Number of people, average income, etc.

    Take a look at the other real bakeries in other towns close to you and try to see what sort of demographics they have (and stop in and get a feel whether they are being successful).

    One thing you could do is lay out a regional map and start marking down locations of the other bakeries. Make a relatively large circle around them. Add in marks for coffee shops that have baked goods, with smaller circle. Also ad in doughnut shops and bagel shops. Look to see if there is a reasonably gap in he town you are considering.

    On filling for offices, location becomes more key. Can you be near the freeway that goes between Boulder and Denver? If not, you'll get mostly people local to your town (either work is in your town, or they live there and work elsewhere). if you can be near the freeway, you can maybe get commuters.

    Are you planning to offer just take away, or also have seating? If seating. make sure you have coffees and teas. You'll get people to come and relax there, and eat more of your baked goods.

    Slightly different than what you asked, but here is a book I advise anyone who is looking at starting up a company read through:
    https://expandabroad.blogspot.com/2005/08/start-up-book-recommendation.html

    Won't provide as much detail ion the marketing side as what you are seeing on MarketingProfs, but covers things like financing, what legal formation to sue, location, etc.
  • Posted by Natalie on 2/14/2012 at 4:19 AM Author
    Thanks for all the great advise. I will define what I think my primary markets are and try to find out more about them. I'll also try to take a closer look at the competition.

    mgoodman - I would be interested in the recommendation for a marketing consultation. I have funds lined up, but won't have access to them until further into the process. That means this stage is funded with just my cash on hand. It's not ideal, and I'm baking to increase what's available, but if you have someone that works hourly for a couple of hours here and there, I'd love to know.

    Natalie
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