Monday, June 1, 2009

Target Market

Seth Godin had an interesting write up on defining your market and growing your customer base. The article talks about deeper versus wider. One thing I wish he would have addressed though, is when do you go deeper, and when do you go wider. Sometimes its not possible to go wider. Your product is a niche one, so you go deeper in those cases.

Under what circumstances would going deeper actually hurt you? If you have a broad base of customers, going deeper will only alienate a good portion of your established customer base. In this case, wouldn't it make sense to go wider?

I don't profess to get into the whole economics game but it makes me think back to elasticity of demand for your product. Wouldn't a deeper client base entail more inelastic demand, and hence a higher priced product? Of course that higher price should theoretically be offset with a lower cost of supply from being in a niche business.

My point is to be careful before you decide between deeper versus wider. In the race for more customers and more profit you do not want to kill the goose that lays the golden eggs.

The Article is here: (Pearson Education)

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