Describing your target market (eg young adults, pensioners, vegetarians) in detail is an effective way of demonstrating your awareness of exactly who will be making up the majority of your customers. Your sales will largely be decided by the take up of your product or service by this sector of the population.
Business success is often determined by the ability to tap into a niche market. Therefore, detailing any specific segments of your target market (eg urban dwelling vegan pensioners, children who play the piano) that will be particularly attracted to your offering can provide a better idea of the potential of your business. It can also make the marketing plan easier to draw up.
Digging deeper into the demographics of your chosen market segment will allow you to focus even more clearly on your goals and proves to an investor that you have done your research. There are a whole range of demographics to choose from, including gender, age and income range, occupation and level of education.
Finding out the worth to your business of the population who fulfill the specific set of demographics (ie. the total number of people multiplied by the cost of your offering) can help you to ascertain some of your financial projections.
Know your enemy! Unless you’ve come up with a brand new invention, you’ll almost certainly have a certain number of competitors already out there. You should identify your most direct competitors and find out about the strengths and weaknesses of their products, services and business operations.