1. Profiling Your Target Customer
Chapter 4
Small Business: An Entrepreneur's Plan
Profiling Your Target Customer
Explore Customer Groups
chapter 4
Prepared by
Ron Knowles
Algonquin College
& Jennifer Rouse Barbeau
Canadore College
Copyright © 2011 Nelson Education Ltd.

2. chapter Chapter Overview 4 Chapter 4 will:
Small Business: An Entrepreneur's Plan
Chapter Overview
Chapter 4 will:
Help you begin collecting information to understand, develop a profile of, and connect with your target customer.
Begin to formulate your market strategy.
chapter 4
Copyright © 2011 Nelson Education Ltd.

3. Learning Opportunities
Chapter 4
Small Business: An Entrepreneur's Plan
Learning Opportunities
Understand that your key to survival in small business is the target customer.
Recognize three kinds of customer groups.
Use primary and secondary research to profile your target customer.
Match your target customer with what he or she reads, watches, and listens to.
chapter 4
Copyright © 2011 Nelson Education Ltd.

4. Learning Opportunities
Chapter 4
Small Business: An Entrepreneur's Plan
Learning Opportunities
Become more aware of and start being on the look-out for potential partnerships, alliances, and associations.
Recognize the market and the target customers who are about to surface.
Research your prospective target customers and refine your mission statement.
Visualize your business and target customer.
chapter 4
Copyright © 2011 Nelson Education Ltd.

5. What is Customer Relationship Marketing?
Chapter 4
Small Business: An Entrepreneur's Plan
What is Customer Relationship Marketing?
A Key Trend:
Customer Relationship Marketing
The development of long-term, mutually beneficial and cost-effective relationships with your customer.
Emphasizes a market pull strategy:
Determine what your target customer (TC) wants.
Profile your target customer.
Adapt or create a product or service to satisfy this want or need.
Emphasizes a one-to-one marketing strategy.
Copyright © 2011 Nelson Education Ltd.

6. The Power of Profiling Three types of customers:
Chapter 4
Small Business: An Entrepreneur's Plan
The Power of Profiling
Three types of customers:
1. Primary: The primary or target customer is most likely to buy your product or service and could be a heavy user.
Secondary: The secondary customer has a possibility of buying your product or service but needs convincing.
3. Invisible: The invisible customer is the one you don’t anticipate but has a need for your product or service. This customer appears after you open the doors.
Copyright © 2011 Nelson Education Ltd.

7. Two Types of Customer Profiles
Chapter 4
Small Business: An Entrepreneur's Plan
Two Types of Customer Profiles
Business to Consumer (B2C) or
End-User Profile
If your TC is the consumer or end-user, your customer profile will likely require demographics or psychographics.
2. Business-to-Business (B2B) Profile
Many small businesses offer their services or products, often on a contract basis, to other businesses.
These supply chain companies need a customer profile that is based on business or company-type information.
Copyright © 2011 Nelson Education Ltd.

8. Demographics & Psychographics
Chapter 4
Small Business: An Entrepreneur's Plan
Demographics & Psychographics
DEMOGRAPHICS
Key personal characteristics of a group of people.
These include:
Age
Sex
Family Status
Age of Children
Education
Residence
PSYCHOGRAPHICS
Process of segmenting the population by lifestyles & values.
These may include:
Where they eat & shop
Sporting activities
Entertainment activities
How socially & physically active they are
Whether they travel for business or fun
Copyright © 2011 Nelson Education Ltd.

9. Psychographic Profiling
Chapter 4
Small Business: An Entrepreneur's Plan
Psychographic Profiling
Chances are you will have to do
your own psychographic research.
Use Action Step 24 to get started:
What is your VALS? Click on the SRI Consulting Business Intelligence site.
Profile your target customer using postal codes. Link on to Generation 5.
Do your own psychographic profiling. Invite a few friends to a psychographic party.
Copyright © 2011 Nelson Education Ltd.

10. Media Sources Can Help Demographic & psychographic profiles are
Chapter 4
Small Business: An Entrepreneur's Plan
Media Sources Can Help
Demographic & psychographic profiles are
available from media sources:
Magazines
TV and radio stations
Online
Copyright © 2011 Nelson Education Ltd.

11. Chapter 4
Small Business: An Entrepreneur's Plan
Media Sources Can Help
Analyze media sources aimed at different target markets.
What does your target customer read, listen to or watch?
Action Step 25 will help you get started.
Conduct primary and “new eyes” research.
Interview magazine buyers.
Do some secondary research.
Write to advertising departments.
Ask for media kits and reader profiles.
Copyright © 2011 Nelson Education Ltd.

12. B2B: Business to Business
Chapter 4
Small Business: An Entrepreneur's Plan
B2B: Business to Business
Business-to-business or supply chain firms can be characterized as:
Businesses whose target customers are other businesses.
Businesses who do not deal directly with the end-user or consumer.
Businesses whose major goal is to create partnerships, ventures, alliances, or associations with their target customers.
A target customer profile would include:
Company Profile: e.g. size of business, type of business
End user Profile: e.g. end-user application, decision-maker
Industry Profile: e.g. trends, competing firms and barriers to entry.
Copyright © 2011 Nelson Education Ltd.

13. Joint Ventures & Strategic Alliances: 10 Tips
Chapter 4
Small Business: An Entrepreneur's Plan
Joint Ventures & Strategic Alliances: 10 Tips
Have a common purpose
Conduct research
Consider mutual benefits
Provide a structure
Consider potential advantages
Invest in human resources
Put it in writing
Stay in touch
Keep tabs
Exit stage left
Copyright © 2011 Nelson Education Ltd.

14. B2B or B2C B2B or B2C? Which one will it “B”? You can benefit from
Chapter 4
Small Business: An Entrepreneur's Plan
B2B or B2C
B2B or B2C? Which one will it “B”?
Recall the experience of Adrienne Armstrong at Arbour Environmental.
You can
benefit from
both worlds.
Copyright © 2011 Nelson Education Ltd.

15. Field Interviewing & Surveying
Chapter 4
Small Business: An Entrepreneur's Plan
Field Interviewing & Surveying
FIELD INTERVIEWING TARGET CUSTOMERS
SURVEYING
Test your TC profile, developed from secondary research, against reality.
Ask questions of your potential customers.
Recall the experience of Julia Gonzales.
Develop a questionnaire & identify a survey location.
Get permission from the location owner.
Bargaining tactic: share the information you discover.
Recall the experience of Elizabeth Wood.
Copyright © 2011 Nelson Education Ltd.

16. Other Sources of Primary Research
Chapter 4
Small Business: An Entrepreneur's Plan
Other Sources of Primary Research
Mentoring: Locate a business owner who wants to help.
Experience: Work in a similar business and get all the information you can.
Networking: Go out and talk to local businesses and friends.
Brainstorming: Gather a group of friends, associates, or family and brainstorm your TC.
Competitors: In some cases, researching your competition may provide some good information about your potential TC.
Copyright © 2011 Nelson Education Ltd.

17. Business Vision Visualize your new business and the target customer.
Chapter 4
Small Business: An Entrepreneur's Plan
Business Vision
Visualize your new business and the target customer.
A business vision is:
A mental picture of your business, product or service at some time in the future.
A source of guidance and direction.
A driving force for your persistence and passion.
Copyright © 2011 Nelson Education Ltd.

18. Business Plan Building Block
Chapter 4
Small Business: An Entrepreneur's Plan
Business Plan Building Block
Chapter 4 helps you prepare
Part B of your business plan:
The Market &
The Target Customer
Copyright © 2011 Nelson Education Ltd.

19. Checklist for Your Business Plan
Chapter 4
Small Business: An Entrepreneur's Plan
Checklist for Your Business Plan
Profile your target market in terms of primary, secondary, and invisible customers.
What do the results of your primary research questionnaire tell you about your target market?
What information have you developed about your target customer from your secondary research?
What characteristics are unique or clearly definable about your target customer?
What is the best way to reach your target market?
Copyright © 2011 Nelson Education Ltd.

20. My Virtual Model Case Study
Chapter 4
Small Business: An Entrepreneur's Plan
My Virtual Model
Case
Study
My Virtual Model (MVM) is a successful company
headed up by Louise Guay and Jean-Francois St-Arnaud.
Answer the Chapter 4 case study questions to learn:
How MVM takes advantage of relationship marketing, the market pull approach and one-to-one marketing.
The three types of MVM customers.
MVM’s and Lands’ End target customer profile.
What MVM’s business vision was and how Louise Guay used primary research to help start the business.
How MVM benefits from market trends and partnerships.
Copyright © 2011 Nelson Education Ltd.