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All right! Here is a short video on
quantifying your target market using the step by step process
I have posted in Blackboard.
The very first step you need to do
is to perform the segmentation analysis.
And I'm today talking about consumer segmentation.
I'm happy to work with you offline to talk about
your business to business segmentation.
I have provided some suggestions on how you
create that profile right here. But right now let's focus on
consumer-oriented businesses.
And you needs to define the location, gender, age
income, education, lifestyle and buying behaviors of your target consumer.
So here's what that looks like for my fictitious
yoga business which is focused on Carlsbad females
between the ages of 40 and 60, who have a household income above $60K.
For the purposes of this exercise education is not relevant but I do
generally expect my consumer to be health-oriented
and they of course must be open to the practice of Yoga.
So how do I find out,
starting with this group of the first four categorizations,
how many people meet that profile.
Because we are talking about San Diego,
I can go to SanDAG.org and start
there. When I click on "Demographics and Other ",
my option here is this "Profile Warehouse",
which looks like this. When I get to the Profile Warehouse,
I usually want to choose current estimates. There may be times
when you want to look at a longer term forecast.
But for most of us, we'll look at current estimates.
And then you have many options here for the kinds of data,
the sort of data you're going to be looking at.
"Jurisdictions" are primarily the primary cities in the region or County.
"Region" is not particularly helpful -- it is all of San Diego county.
Zip codes, if you need to drill down below the level of a city
and get to a very specific area --
this is relevant for retail stores. If you want to
go a higher level up, you may get some good information by
looking at all of North County West.
And you can click here to find out how they define that.
And then you may also be
interested in looking at educational data, meaning student
populations by looking at some of this high school,
Unified School District, Elementary School District data.
But for us, let's look at jurisdictions, specifically the City of Carlsbad.
And we're going to get the profile for that.
When we get that profile,
this is what it looks like. We start by
looking at just big picture population for the city.
It tells us about housing units, it tells us about income.
And then it gives us down to population by gender and age.
So, starting with that, I'm looking at women
between the ages of 40 and 60.
The numbers of women I want to add up here
are these four (4) numbers.
And so I take those four numbers and I put them
into my spreadsheet,
and I get a total population of women in Carlsbad
between the ages of 40 and 60 to be 16,231.
Now the other important segmentation in my particularly analysis
is income
because my service is really only open to folks that have some
extra disposable income.
And I have specified that they need to be making $60k
a year, or up, as their household income.
And that means I'm targeting all of the people in this range.
[Anyone]
That's this 10% of the Carlsbad population, looking at that particular range,
all the way up to people making $200k or more.
So what I need to do is add these six (6)
percentages together, to get the total percentage of people in Carlsbad
with household incomes above $60k dollars.
So again I put those into my spreadsheet. I add those up,
and I get 68%.
I want to apply that 68%
to my number here, which is my number of women.
So, I get a new number
of people who meet my exact demographic
as defined by my segmentation for the first four
elements of it. And that's 11,000 women.
The very last step is the most challenging step, sometimes, and that's
to apply some kind of behavior to you number.
I went and looked at some Yoga statistics.
And I see that according to a major study,
6.9 % of the US population practices Yoga.
So I want to apply that percentage to my narrowed down market segmentation,
and when I do I find that my actual target market,
for this particular study, is
relatively small: it's 762 women.
But that's what (the number) I need and if I only need
5 percent of those women to come into my studio every week to be profitable,
then there you have it! This is how you quantify your target market.
If you're having trouble with this please contact me and I'll
happy to help you through it.