Assessing the size of the opportunity in relation to the target
Finding the right target can be a balancing act. It’s important that your target is specific enough to be meaningful and easily understood. A potential consumer should be able to see themselves right away in your communication. If you’re trying to reach everyone your message will indistinct and won’t connect well.
It’s also important that your market be broad enough to be financially viable. You can assess this by looking at the total population in the target, and then factoring in projected trial and conversion, and usage rate.
You also want to take into consideration the objectives for the company and the Brand. If your company is focused on growth, the target that you identify needs to have strong potential for growth. This could be a demographic trend (you’re marketing to seniors and that group is growing). It could also be a psychographic trend (number of people willing to pay more for fair trade is growing)
If you’re focused on profitability, you need a target with a strong potential for loyalty…that would be important. Obviously it might be both. Also, when you’re reaching potential customers, it’s better to reach a smaller number than will likely convert. Obviously, you don’t want the target to be too small xxx. Differentiates and builds loyalty Niche markets