Identify Your Trading Area
Your Trading Area is the general area in which your Target Market is located. This could be anything from a residential neighbourhood to a commercial district. Understanding your Trading Area can help you locate and identify the size of your Target Market more accurately.
If you sell to more than one distinct Trading Area, identify each of them separately.
If your customers come to you, how far will they travel to get to your business?
On average, people will drive for 20 minutes to get to a destination. If you have your customers' addresses, you can be more accurate.
If your customers come to you, is your place of business your customers' main destination or are they in your vicinity for other reasons? Explain.
If your customers come to you, what other businesses near yours affect your customers travels? If you're in a shopping mall or near a “destination business” like a grocery store, for example, your customers may visit your business as part of a larger trip.
Competitors may also affect your trading area. When there is no significant difference, prospects may choose a competitor based on a more convenient location. If you perform work at a customer's location, how far will you go to get to your customers? How far can you send your employees and still be profitable? How else might you profitably work with customers who are farther away?
If you deliver to your customers, how far will you travel? With simpler and lower transportation costs, it's often practical to send items of almost any size to almost anywhere.
If your business draws from specific areas, get a map, locate your business and outline your Trading Area. Use the answers above to help you identify its true shape. Be as accurate as possible; if people have to drive through an extra 10 minutes of traffic to get to your business from the west, for example, you may need to adjust your western boundary accordingly.
Once you have outlined your Trading Area, document its boundaries and include them in your Central Geographic Model above. Alternatively, you can list Postal Codes, Zip Codes or neighbourhoods if appropriate.
Geo-demographics is the demographic breakdown of geography. It's based on the premise that people with similar demographic profiles can often be found grouped together.
For example, people with similar ethnic backgrounds or a similar socio-economic status, often live in the same neighbourhood.
So, if a number of your customers come from one neighbourhood, it might be reasonable to assume others from that same neighbourhood could also benefit from your products or services. You can review the demographic profiles of various neighbourhoods through the national or regional census. If you can locate other areas with demographic profiles that match your Target Market, you probably located a new source of prospects.
First, have a look at your Trading Area map and identify the locations of as many of your best customers as possible, using your demographic information.
What neighbourhoods/regions do your best customers come from?
If there's more than one region your best customers come from, do they share any common qualities or characteristics?
What qualities or characteristics about these locations may have attracted your customers to them?
Next, extrapolate from this what other neighbourhoods/regions might contain good prospects and consider looking beyond your national borders.
- Central Psychographic Model (CPM)
Your Central Psychographic Model is the psychographic profile of your Target Market. It paints a picture of the personal characteristics of your best customers. Fill out the following form as you did the previous two, this time using your psychographic results.
|Psychographic Results||Target Market Profile (CPM)||Secondary Market|
|66% holiday with friends at least once a year. 71% eat dinner with friends more than 5 times per month.||Social, Outgoing||N/A|
2a. Benefit Profile (BP)
The final dimension of your Target Market Profile is your Benefit Profile. It paints a picture of your ideal customers' needs and wants. Profile the desired benefits of your Target Market in the space below, then list the features that satisfy those desires.
|Psychographic Results||Target Market Profile (BP)||Secondary Market|
|67% want their toothpaste to taste good.||Great Taste||N/A|