So I'm taking a small business course online and we are at the Marketing piece of the course. The question presented to us is:
How do you believe your market can be segmented: age, gender, occupation, etc.?
I get so tripped up on questions it's ridiculous, but I'm not sure how to answer this question. My initial response is location. I am segmenting it on location, specifically where I want to invest at like a specific zip code or city. Then I was thinking well maybe it means markets like distressed sellers, fsbo ads, probate, tired landlords, etc.
The second question to the assignment is which one of these segments do you think will be the most profitable for you small business and why? I could name the 4 cities that I was doing my market research on here or I could choose one the the target audience such as absentee landlords and elaborate there OR would it be both??
So I guess my question is...which is right? location or the others listed OR both??
Now that I think about it, if I'm answering the question what is my target market...who am I selling to, it wouldn't be location then, it would be targeted audience then. Well I just answered my own question! LOL!!
Every single business on Earth since the beginning of time can segment their market into 3 categories: 1)people who want to do business with you, b)people who don't yet know they want to do business with you, and iii) people who will never want to do business with you.
I believe the VAST.majority of people fall into iii),. Leverage 1) to educate and build trust among group b)..
The goal of any business is to turn as many b)'s into 1)'s as possible. Demographics (age, location, job, etc) are merely screening criteria to try and target your way into the brains of as many b)'s as you can.
Great topic. I'm an old marketing hack myself.
In fact, I was humbled about twenty years ago when I attended Jay Abraham 3-day event and discovered that I really didn't know much about real marketing. Especially tough because I had a degree in international marketing from a well known biz school and had taught a class in the grad program. Sad but true.
Here's where you really learn about marketing: direct response! An example is the TV ad or informercials that builds up a call-to-action to phone an 800 # (offline) or go to a landing page (online) and get a loss leader product or service. I had a chance to sell the "sham wow" cloth in 1978 but obviously other knew how to sell it better.
Why? Because these people only spend money on things they can sell directly to the user, testing and measuring the response. You will not learn didily squat from watching Coke and Pepsi TV ads.
As for segmenting? Yes. Think about how people become motivated to do something. Think about who you want. For example, in my business (probate) my demographics run with a very heavy female bias. Why? It has to do with the eventuality of who normally has to deal with the estate (daughter).
And then you can drill down to psychographics (how people think and behave) and try to predict by testing ads based on certain criteria and assumptions. This can all be quite overwhelming, especially if you are new to real estate.
Here's what I suggest: pick a target audience to mail to and send 10 letters out. Now you'd no longer be a marketing virgin and can get down to the business of creating a campaign to reach them.
Hint: there's so much hype on BP and elsewhere about 'absentee owners' that you'd think this is the mother lode of real estate profits. After nearly 40 years of real estate investing, I can assure you that this is not a sufficient catalyst to sell.
Wow, thanks for the great advice Rick!
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