The Target Market for your startup is one or more market segments. Your startup markets an offering or product(s) to it. Your target market or target audience for a Website may be a specialized subset of your Target Market for your product. For B2C it is usually defined by social-economic groups age and gender. For B2B it is likely one or more sub-sectors of a vertical industry(s) including consideration of business size and in some cases what processes or equipment the prospect uses. A product like SAP is sold to numerous vertical markets. For B2G it may be a group of functional areas within one or more government agencies.
Initially a startup should focus on only one or two Market Segments. A Market Segment is a subset of a vertical market that is defined with parameters relevant to a particular analysis.
The characteristics of your product imply many things about your Target Market.
Startups frequently define an offering to address a market pain. For what Market Segment(s) is the solution of this Market Pain a Mission Critical issue?
What Websites and physical stores are within the group that you consider to be your competition? Who buys from them? What do they purchase? What problems do the buyers have that have not been solved by your competition?
What problems does your Product solve?
Understand what problems your offering solves. Develop a list of the characteristics of the individuals and organizations for whom it is mission critical to solve those problems. This enables you to create a series of Buyer Personas and to define and then to understand the niches in your Target Market.
Costs and Pricing
What do your competitors charge for their offering. What do your prospects pay for their current solution to the market pain that your product addresses? What does it cost you to manufacture your product. Is your pricing aligned with all of the above?
Understand who buys your products and who buys your competitor’s products. Listen to social media interactions. How do the demographics differ from competitor to competitor and to you?
Understanding the target market for your startup is a Key Success Factor. Learn about the market pain that your product addresses. Understand the buyers of it and of similar products. Learn about these customers. Rewrite the definition of your Target Market and your Buyer Personas.