The Secret Sauce to ‘Marketing’ is in the ‘Market’

Where will you target your business offering, and who will you serve?

The Goldfish’s Dilemma: Choosing The Right Pond

If you’ve ever seen a goldfish, you’ll know how important her choice of pond is. Some ponds are crystal-clear paradises. Others? Shark-infested nightmares.

It’s the same for entrepreneurs.

The pond you need to choose? It’s your target market.

Before you dive in with flashy marketing campaigns as part of your business strategy, you need to ask: What’s the water like? Who’s already swimming there? Is this a place you’ll thrive in, or just survive?

Like the goldfish, your success depends on your environment.

Pick the wrong market, and even the fanciest marketing won’t save you.

8 Frameworks to Find Your Perfect Market (No Crystal Ball Required)

#1 – ‘PESTLE’: The Bird’s-Eye View of Your Market

In conducting market analysis for a start-up, you’re likely to come across the ‘PESTLE method’. PESTLE isn’t just a funny acronym for your next Scrabble game – it’s how you study your market’s macro-environment. Before you make waves, understand your pond:

• Political: Are you going to be swimming in stable waters, or is the government a murky mess? Are there any looming regulations, taxes, or labor laws that could flip your pond upside down?
• Economic: Is the economy thriving, or is it gasping for air? Think interest rates, inflation, and consumer spending.
• Sociological: What are people thinking, feeling, and buying? Understanding demographics, values, and societal trends can help you align your product and your marketing accordingly.
• Technological: Are there any new tech toys in the pond? Automation, AI, and innovation are pushing industries forward. Don’t get left behind.
• Legal: Don’t swim into muddy waters. Are there employment laws, health regulations, or industry-specific rules you should be aware of?
• Ecological: It’s a hot topic, especially now. Is the market demanding sustainable products? Climate change and pollution concerns are forcing businesses to rethink their strategies.

Bonus Tip: After using PESTLE, complement your findings with a SWOT analysis. Align your internal Strengths and Weaknesses with the external Opportunities and Threats you’ve just identified.

#2 – Porter’s Five Forces: Is This Industry Your Perfect Match?

Answer this: Should you, or should you not, enter a particular industry?

Enter the ‘five forces’ framework, courtesy Michael Porter. It’s another commonly used framework in developing a winning business strategy, which includes observing:

• Competitive Rivalry: How many fish are already in the pond? If you’re diving into a market with loads of competitors (hello, electric cars!), expect a fierce battle for resources. The more fish, the tougher it is to stand out. Think about the industry concentration and competitor resources (e.g., advertising power). There are typically four types of business competitors: the market leaders (think Coca-Cola, Chanel, McDonalds…), the challengers (think Lexus challenging Mercedes or Adidas challenging Nike), the followers (who want a slice of the pie without ruffling feathers), and ‘nichers’ (the specialists).
• Threat of New Entrants: You’re just getting comfy, and here come all the new fish. But if there are serious entry barriers (like high capital requirements, patents, or a tough learning curve), your spot might be safe from newcomers.
• Threat of Substitutes: Will people easily switch to alternatives? If you’re opening a burger joint, don’t forget that fast food, pizza, or sushi could pull customers away. Your offering needs to be perceived as special enough. Or the switching costs for your customers need to be high.
• Bargaining Power of Suppliers: How many suppliers or vendors are available in the market? If your suppliers are calling the shots, you’re in trouble. High supplier power can squeeze your profits.
• Bargaining Power of Customers: What is the volume of your potential buyers? What information do they have? How price-sensitive can they get? If there are lots of alternatives and low switching costs, your target customers might hold all the cards.

#3 – Porter’s ‘Diamond’: Why Location Still Rules the Game

Yet another framework’ ‘Porter’s Diamond’, may sound fancy – but it’s really just a guide to picking the right playground to give your business its best shot. It’s based on the premise that launching a business in the right country can be a game changer.

Here’s the lowdown:

• Factor Conditions: Is your home country rich in the resources you’ll need? A solid infrastructure, human resources, and capital are essential to success. Natural resources are nice, but access to support – say – research capabilities – is gold.
• Demand Conditions: Are your local buyers picky and high-maintenance? Good. The more demanding they are, the faster you’ll innovate. (Ever wonder why Swiss watches and German cars scream perfection?)
• Related & Supporting Industries: Your business won’t exist in a bubble. Strong suppliers and cutting-edge tech nearby can be your secret weapon.
• Firm Strategy, Structure & Rivalry: Fierce rivals will keep you sharp and constantly improving.
• Government: A supportive government is like a VIP pass. Look for countries with policies that encourage exports, protect intellectual property, and support your industry.
• Chance: Sometimes, it’s about being in the right place at the right time. Luck is a wild card, but smart entrepreneurs stack the deck.

#4 – ‘ADAMS’: Segment Your Target Audience Like a Pro

Say you’ve identified a broad target market.

No more casting a wide net and hoping for the best!

It’s time for precision; to look for specific ‘segments’ within your target market that you can reach with laser focus in your marketing strategy.

Market ‘segments’ are groups of people with similar characteristics, and ultimately, these segments must be profitable for you to consider targeting them. To zero in on these segments, think of them in terms of “ADAMS”:

• Accessible: Can you effectively reach this group of people? Say, old people in Wisconsin? If potential customers are in a location that is difficult to access, the segment may not be viable.
• Differentiable: Do these customers have unique needs that set them apart? For a target audience to be viable, it must be homogeneous (its members should have common needs and desires),
• Actionable: Can your business actually design a tailored marketing program for this particular segment? Does it have the capability, knowledge, and resources to serve the segment? Can you foresee a predictable reaction to marketing efforts?
• Measurable: How many people in this group are there? Say, how many outgoing atheist Mexicans are out there? Does it make sense to target this particular segment?
• Substantial: Can this group generate enough revenue to make it worth your while? Is it going to be a big enough target?

#5. The Target Market Checklist

Before you commit, run your target market through the Target Market Checklist. It’s like ensuring your pond is deep enough for your business to thrive:

• Full-day hours? (accessibility)
• Accessible location? (think easy transit)
• Protection from external disasters? (let’s avoid floods)
• Navigable aisles? (easy to browse)
• A broad selection of goods? (variety matters)
• Affordability? (you need that balance between value and price)
• Evergreen potential? (long-term viability)
• Reachability? (for customer communication)
• Uniqueness? (stand out from the crowd)
• Urgency? (a market that’s constantly in need)
• Accurate info? (timely and relevant details)
• Upsell potential? (more opportunities!)
• Multi-level vending? (on-ground and online)
• Liquidity? (easy buying/selling)

Thoroughly evaluating each potential market before launching marketing campaigns ensures your efforts are worthwhile.

#6 – Micro-PESTLE: Zeroing In for Market Precision

Once you’ve narrowed down your target audience, apply Micro PESTLE to dig deeper into each segment. What’s influencing them specifically? And how can you best reach them?

Will you focus on one segment with tailored offerings? Or will you target multiple segments with distinct strategies?

Will you serve one market with a broad product range? Or offer a specific product to multiple market segments with varying needs?

Will you aim for full coverage and reach all segments if you’ve got the resources?

Micro PESTLE will help you keep your fingers on the pulse and adjust as needed.

#7- The Holy Grail: A Product that Fits The Market

Product-Market Fit is the golden nugget. It’s where your product aligns perfectly with market needs.

Sounds easy, but as every entrepreneur knows, it’s a tough nut to crack.

Consider challenges like legal restrictions, social barriers, distribution hurdles, and technical limitations. Different jurisdictions have varying laws, cultural diversity affects product acceptance, technology standardization varies globally, many countries lack centralized distribution, and competition is fierce.

Sometimes, you’ll need to test the waters and adjust.

Get your product just right, and make sure it clicks with customers.

#8- Profiling: Know Thy Ideal Customer

In an ideal world, who’s buying what you’re selling?

If you’re going to create something people actually want—or need—you better know exactly who they are.

Are they fitness and fashion freaks? (Hello Lululemon fans)? Are they fast-paced, tech-savvy entrepreneurs who can’t live without the latest software? Or maybe they’re an artist who needs that perfect tool to enhance their creativity without a steep learning curve. Your target market is the group who’ll benefit most from what you offer, and who’s most likely willing to part with their hard-earned cash to get it.

Got a clear picture? Good. That’s your primary market. Now get obsessed with them.

#9 – Research Is Your Secret Weapon

As a small startup, you’ll probably not have enough time and resources to do a comprehensive market analysis. But market research is key; use every available tool at your disposal.

Dive into tools like Google Trends, YouTube insights, and even AI-driven analytics to understand whether your market is growing or dying.

What’s the current key rate at major economies and your interested geography? Will the market be contracting or expanding in the next few years? Is consumer behavior changing? What are new businesses and trends massively emerging in your market?

Once you have information, get out there, engage with your customers, and see how they respond.

In the world of start-ups, real-world data trumps all.

Takeaways

The bottom line for your marketing strategy is this: if there’s no real gap in the market, why even bother hustling?

It’s not just about understanding who your direct competitors are—it’s about knowing your indirect ones too. To really stand out, ask yourself this: How much more important is what I do for a consumer than something they’re already doing?

The secret ingredient to start-up success is real market growth potential. That’s why all these frameworks – and all this macroenvironmental analysis is important. It tells you: “What is the right product?” “How do you price it?” How do you optimize marketing?…”. Here’s the truth: most startups won’t morph into billion-dollar unicorns. And your investors know this, which is why they want to see that your business will grow organically because the market is booming, not because you’re forcing it uphill based on fads.

So in building your business strategy, first nail your market. Create what customers love – and make sure your product shouts louder than the competition.

Then, let your marketing run wild and watch you take the crown.