Business Concept 6: Target Market

In every business, you have to know who your customers are. If you don't, you have to make a profile of the customers you want, so you can customise your products and services to suit their needs. The clearer you are about your target market, the better you can cater for them. Take for example the tale of 2 coffee shops located side by side at a highway rest stop pictured below:

You can see that the coffee shop on the left has at least 5 tour vans parked outside and the coffee shop on the right is empty. Why is this so? Here's my interpretation of their business plans:

Lee Chong Cafe (left)

Target Customers: high volume, high revenue customers = tourists

Where to find them: Tour agencies, so need to visit their offices in town to make arrangement for them to send their tourists to dine here.

Decision maker's concerns: Quality of food, cleanliness, tour guides taking tourists elsewhere and making money on the sidelines

How to address their concerns: Create a set lunch comprising of local dishes complete with dessert (which equals to more sales revenue), use table cloth so tables can be cleaned quickly, create cashless payment vouchers and signed by coffee shop owner.

Jia Shing Cafe (Right)

Target Customers: nearby residents, anybody who stops by

Where to find them: Don't need to, just wait for them

Decision maker's concerns: cheap food

How to address their concerns: Create a cheap menu using the cheapest ingredients

Lee Chong Cafe is operating at a higher profit margin and higher volume compared to Jia Shing Cafe even though they are in the same type of business located next to each other. Thinking and planning that little bit extra can make such a big difference to your business.