Top 10 Criteria for Choosing a Market: Explanation and Examples
Here is a clear explanation and example for each of the Top 10 criteria for choosing a market, as discussed by Bill Glazer and Dan Kennedy in the sources:
1. Size
- Explanation: This criterion assesses whether the market is large enough to support the financial and equity goals of the business or client. It asks if the potential return is worthy of the investment of time, energy, effort, experimentation, and money required to successfully reach that specific market segment.
- Example: The discussion implies that a market must be of a sufficient size to justify the investment and achieve desired business growth, though no specific example of an *insufficiently* sized market is given in the sources.
2. Reachability
- Explanation: This refers to the ability to efficiently and affordably connect with the target market. It involves identifying existing channels or groups where the target audience congregates, such as associations, clubs, networks, specific magazines, newsletters, or websites. If you have to broadcast broadly before you can narrowcast, it becomes problematic.
- Examples:
- Difficult Reachability: If your ideal prospect is “former owners of men’s clothing stores who have been retired from that business for five years or longer,” and there are no specific magazines, lists, or ways to easily identify them, you might be forced into broad, expensive advertising (like ads in the Wall Street Journal or on television) that is inefficient and costly.
- Good Reachability: For “model railroading buffs,” reachability is high because they subscribe to specific magazines, belong to clubs in almost every state, attend conferences and national events, participate in competitions, and frequent retail hobby shops, all of which offer direct ways to reach them.
3. Proven Viable
- Explanation: This criterion asks whether the market has already demonstrated a willingness to purchase comparable products or services, even if not exactly what you sell or through your exact method. It examines if their spending habits align with your price point and if their general purchasing behaviors match your sales approach.
- Examples:
- Price: Do potential customers typically spend in the price range you’re targeting, or do they consistently buy much less expensive items?.
- Product Category: If selling home-related items, do they already purchase home furnishings or appliances, or are they generally non-spenders on their home?.
- Sales Method: If your sales strategy involves in-home presentations, are these customers amenable to letting salespeople into their homes? If you use a party plan, do they attend and buy from home parties? The suitability of sales methods like direct mail, telemarketing, or webinars for that specific market should also be considered.
4. Active Interest Demonstrated
- Explanation: This means the target market has shown a clear, existing interest or concern related to the product or service, rather than just fitting a demographic profile. It goes beyond general demographics to identify those who are “in motion” or have a strong motivation to buy.
- Examples:
- An infomercial for a home study product aimed at keeping kids off drugs failed because while many parents watch TV, the vast majority are not “concerned parents” who have demonstrated a high level of concern about raising successful children.
- In weight loss, simply having lists of “short, fat, dumpy people” isn’t enough; the target should be “short, fat, dumpy people who care” about their weight, indicating active interest.
5. Access to Known Buyers
- Explanation: As a subset of active interest, this refers to the ability to directly access individuals or groups who are already known to purchase products or services in your category or a related one. The principle is that “behavior predicts behavior” – people already buying in a category are more likely to buy again.
- Example: In the investment newsletter business, if people subscribe to one, they often subscribe to many. Therefore, having access to lists of financial newsletter subscribers or “expires” (past subscribers) can be extremely valuable for a competing publication because you are targeting known buyers already “in motion” to purchase such products.
6. Responsive in a Relevant Way
- Explanation: This means the target audience not only responds to marketing but responds through the specific channels or methods you plan to use.
- Example: If your marketing strategy relies on direct mail, do these people buy from direct mail? If you plan to use the Internet for sales, do they use the Internet for purchasing? It’s crucial that their responsiveness aligns with your delivery method.
7. Unmet Needs and Desires
- Explanation: This criterion emphasizes the importance of a market having genuine unmet needs or desires that your product or service can uniquely fulfill. It ensures you have a strong reason to be in that market and can offer a persuasive Unique Selling Proposition (USP), rather than simply duplicating existing offerings.
- Example: Opening a ski shop in an area simply because you like living there and want to own a ski shop, without considering the existing competition or whether anyone in that area actually skis, demonstrates a lack of understanding of unmet needs and leads to being a “pure duplication” that struggles with differentiation.
8. Affinity
- Explanation: Affinity refers to having a strong, built-in connection or relationship with the market that provides a significant advantage. This connection can make the market much more desirable and accessible.
- Example: A financial advisory client is opening a new office in Pittsburgh with a joint venture partner, Rocky Bleier, a four-time Super Bowl champion player with the Pittsburgh Steelers. This partnership creates a highly desirable market because of Bleier’s strong affinity and connection with the local community.
9. Price Appropriateness
- Explanation: This criterion ensures that the chosen market is willing and able to pay the prices or fees that the business needs to charge to achieve its financial goals. It’s about aligning your pricing strategy with the market’s spending habits.
- Example: While a full discussion on pricing strategy is referenced as being in a different source (“no BS price strategy book”), the core idea is to verify if the market’s typical purchasing behavior matches your desired price points.
10. Source of Ideal Customers/Clients
- Explanation: This final point goes beyond mere profitability, asking not just “who can you make money from?” but “who do you want to make money from?”. It emphasizes the importance of personal preference and job satisfaction, suggesting that the worst outcome is being trapped in a financially rewarding business where you dislike or disdain the customers, clients, or patients you must deal with for those rewards.
- Example: The source highlights the general principle that there are many ways to make money, so there’s no need to put yourself in a situation where you are constantly dealing with customers you don’t like, even if they are profitable.
