Target market. It’s a phrase that gets bandied around in marketing circles all the time. But what does it actually mean? How do you identify it? And then what do you do with that information?
Let’s start by defining what we mean. The TAM SAM SOM system is an excellent place to begin. Take a look at the diagram below:
TAM: Total Available Market
SAM: Serviceable Available Market
SOM: Serviceable Obtainable Market
Looking at the Total Available Market, we see that this encompasses both other areas. This is the entirety of consumers who might purchase your brand in an ideal world. It includes anyone, and everyone, that your product has the potential to interest.
For example, if you were starting a shampoo brand, your TAM would be anyone in the world who washes their hair and who you could sell to if you had distribution points globally, and there was no competition.
This is an excellent place to aim for, but too lofty a goal to usefully set your sights on at the beginning.
Moving to your Serviceable Available Market, is simply about geography. This is anyone who might want to buy your product who you can physically geographically reach. So if that shampoo brand you’ve started has its offices in Melbourne, then your SAM might be people who wash their hair in Australia.
This is still quite an ideal height to reach for at the beginning, and doesn’t incorporate competitors.
This is where your Serviceable Obtainable Market comes into play because this is the portion of people within your geographic reach who you can capture.
For the Australian shampoo brand, then, it will be people dissatisfied with their current routine, open to switching brands, and receptive to your messaging. It’s here that you initially want to spend your time, and this is the area we’re talking about when we refer to “target market.”
Now we have a good understanding of what we mean by ‘target market’, we can see how it might be applied. Because while it’s a simple concept, and one most likely in your regular vocabulary and headspace, what’s somewhat less simple is actually identifying your target market. From the depths of the boardroom, or the marketing suite, it can be difficult to conjure the hubbub of the outside world, and work out where your place within it lies.
Yet, defining the precise area of the market you’re targeting is crucial. The reason it’s so important to have a tightly-defined target market are numerous.
Firstly, it sets the parameters in which you’re competing. If you know who you’re trying to reach, you can look at which brands are also trying to gain their loyalty: directly alerting you to your competition. Knowing your competitors allows you to understand what’s already being offered; what’s working well; how your niche uses language and branding; and, ultimately, what you need to do to differentiate yourself and convince consumers to switch to you, rather than sticking with them.
It helps you to focus. Almost every company is restrained by resources in some way—not enough time, money, people—and so trying to compete on all fronts is a losers’ game, because it forces you to spread your limited supplies too thinly. However if you define the parameters of where you compete, you can shoot precious resources all in the same direction. This helps you to break through, resonate and build momentum.
Target markets are multi-layered. You can identify either broad swathes of the population who might be interested in investing in your brand, or you can drill down into exactitudes of demographics, location, behaviours, interests, and need states.
A general idea of where your target market lies can be helpful in certain situations: it allows you to be aspirational, and sow your seeds far and wide, and watch to see where they take. A more granular approach has various merits that vagueness can’t offer you—and significantly fewer risks.
Defining specifics of your target market—and constantly questioning and re-questioning its boundaries to watch for shifts—allows for intense refinement of your product or service. For when you understand who is buying your brand, and why they’re buying it, you can chisel your proposition until it’s uniquely appealing to this pre-defined group.
Trying to be all things to all people can, on the other hand, lead you to be nothing to no one.
Going after a specific niche by no means limits your appeal, rather it crafts you a foothold. Of course, one you’ve established yourself as a must-have product or service for this small, specific group of people, you will have a firm base from which to grow into mainstream markets.
From Weight Watchers to Wellness All-Rounders
Wellness is a broad industry, and one that it is inevitably difficult to stand out in. Claiming a product is “healthy” or “good for you” hardly makes it unique. Thousands of brands from generic morning cereals, to cheap skin products with no scientific backing make their sale on health.
Targeting ‘people who want to be healthy,’ then, would probably not have got WW (formerly Weight Watchers) very far. It would have been easy to slip, undefined, onto shelves amidst every other product claiming to better consumers’ lives.
Instead, they landed their ship on a much more tightly-defined beachhead: overweight people looking to lose weight slowly and sustainably, without cutting back on foods they really like. They were not targeting people who had a few extra pounds to shed, and wanted it gone in time for an upcoming holiday, nor were they targeting people willing to switch to a life of salad and soup. They were happy not appealing to the sporty, or people who were overweight and wanting to lead a relatively healthy life, but not bothered in shifting the scales. They went for a very specific type of person, with pre-defined goals and ambitions, and similarities in habits.
Yes, this dramatically reduced their number of potential consumers, but it also radically increased their chances of converting the smaller number of people they were hoping to reach from potential consumers to certain buyers.
It also lent them the added advantage of exclusivity. The Weight Watchers original club system meant that their target market weren’t one off buyers of a diet plan, but brand advocates, regularly in contact with the company and crystallising into perfect opportunities for upselling.
Having established a name, and a reputation for something specific (losing weight) the company were then in poll position to generalise, without becoming ambiguous. So when they started making more widely-appealing products, like supermarket ready meals, instead of fading into the background, their unique value proposition (founded and honed with their specific target market) remained visible.
They have come so far that they’ve even transcended into the world of stadium food—by no means something you’d think of eating when you’re losing weight. They opened a café at the Brooklyn Nets Barclays Centre stadium because “We want to be places people don’t expect us to be but where they still need healthy food,” Sherry Thompson, WW’s SVP of Marketing said.
Finally, they cemented the success of this strategy with a name change. No longer are they Weight Watchers, but WW. It’s a semantic move from niche to general: now they’re appealing to anyone interested in wellness. But it’s a much easier leap to make—from established brand in a specific area to generally-appealing big name—than it is to go straight to the latter.
How to find your niche
The best idea is to go where currently, no one’s going. Look for underserved markets where clear clusters of consumers are frustrated with what’s currently on offer.
An awesome tell-tale sign will be areas where consumers are already trying to fill the gap themselves with makeshift solutions. It’s an indicator of extremely high need, but no official provider of a solution.
Amazon saw second hand book sales, and capitalised on this need. Graze saw people taking homemade bags of trail mix to snack on at their desk, and did it for them. Mumsnet noted the endless anecdotal advice people sought from friends and family at toddler groups and coffee mornings, and brought it together in one hub.
See what’s taking off in the world of blogs; or look at complaints in the review sections of existing brands or products. Start looking for common themes, and thinking about the type of person who has these gaps in their lives, or qualms with the current system.
Keep your options open when approaching these commonalities. They might be to do with income levels, occupations, interests, media consumption, desires or behaviours. This is where it’s useful to start prodding them with questions to find the specific thing that unites them that would help you target them in ad campaigns.
Your group, united by a common problem or need, are universally frustrated. Therefore they are also universally targetable, and likely to be receptive to the messaging you’ll craft with them in mind.
When you’re starting a business, or launching something new, inevitably you will ask yourself: who is this going to interest? Following this thought process through to find your TAM (Total Available Market) is straightforward. If your product is pet food, your TAM is anyone with a pet. If your product is lollipops, your TAM is anyone with a sweet tooth.
Similarly, it’s easy enough to get to your SAM (Serviceable Available Market) on your own: you just consider where you can realistically distribute to.
Narrowing down to your SOM (Serviceable Obtainable Market) however, can feel very overwhelming. Not to mention, it will inevitably rely on guesswork. You can’t know exactly who will want to spend their money with you, or why—and trying to market a product without this information is a daunting prospect. Thankfully, this step is where the Attest tool shines.
Accessing the Attest tool gifts you direct access to all the consumers in your market, so that you can slowly hone in on the people who are going to make up your specific target market. The sum total of our respondents is your TAM, and you can use geographic filters to access your SAM, before using questions to understand where your SOM lives.
Start by asking consumer groups opened-ended questions about their biggest frustrations in different markets or scenarios. If you cast your mind back to the unthinkable time before we could catch a cab from the palm of our hand, Uber might have once asked, “what frustrates you about taking taxis?”
Inevitably, the answers would have come back pointing to people’s annoyance over not knowing when, or where a car might appear; not knowing how much a trip would cost until the end of the journey; not always carrying cash on them; or having to tip.
It would then have been up to Uber to decide how to best solve these frustrations, and for which defined groups.
Uber chose affluent professionals in urban areas to start with. This became their target market, and from there, they moved out to anyone with a phone.
Finding you Serviceable Obtainable Market is a brilliant first step for a new business, or anyone launching something previously unheard of. Giving careful consideration to a modest, specific target market will allow you to nurture these people into strong brand advocates, who will form the necessary foundations for you to grow bigger and more diverse in your offering. In short, grow to be a big fish in a small pond before you move on to conquer the ocean.
To get started crafting the niche that will allow you, eventually, to appeal to everyone without fading into the background, get in touch with us today.