| A market in its entirety is too broad in scope for
any but the largest companies to tackle successfully. The
best strategy for a smaller business is to divide demand
into manageable market niches. Small operations can then
offer specialized goods and services attractive to a
specific group of prospective buyers. There are
undoubtedly some particular products or services you are
especially suited to provide. Study the market carefully
and you will find opportunities. As an example, surgical
instruments used to be sold in bulk to both small medical
practices and large hospitals. One firm realized that the
smaller practices could not afford to sterilize
instruments after each use like hospitals did, but
instead simply disposed of them. The firm's sales
representatives talked to surgeons and hospital workers
to learn what would be more suitable for them. Based on
this information, the company developed disposable
instruments which could be sold in larger quantities at a
lower cost. Another firm capitalized on the fact that
hospital operating rooms must carefully count the
instruments used before and after surgery. This firm met
that particular need by packaging their instruments in
pre-counted, customized sets for different forms of
surgery.
While researching your own company's niche, consider
the results of your market survey and the areas in which
your competitors are already firmly situated. Put this
information into a table or a graph to illustrate where
an opening might exist for your product or service. Try
to find the right configuration of products, services,
quality, and price that will ensure the least direct
competition. Unfortunately, there is no universally
effective way to make these comparisons. Not only will
the desired attributes vary from industry to industry,
but there is also an imaginative element that cannot be
formalized. For example, only someone who had already
thought of developing pre-packaged surgical instruments
could use a survey to determine whether or not a market
actually existed for them.
A well-designed database can help you sort through
your market information and reveal particular segments
you might not see otherwise. For example, do customers in
a certain geographic area tend to purchase products that
combine high quality and high price more frequently? Do
your small business clients take advantage of your
customer service more often than larger ones? If so,
consider focusing on being a local provider of high
quality goods and services or a service-oriented company
that pays extra attention to small businesses.
If you do target a new niche market, make sure that
this niche does not conflict with your overall business
plan. For example, a small bakery that makes cookies by
hand cannot go after a market for inexpensive,
mass-produced cookies, regardless of the demand.
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