Figure out target markets for new software?

May 6, 2008 11:54 AM

What's the best way to find the best target markets for a new software product for consumers?

We have a software product that has not launched yet and are trying to determine our initial target markets. The money for research is really not present, we have no users currently so we can't research current users.

Ideally I would love to find out who might use our product, but also find out who would be good demographics to pursue, how much they make, etc. A lot of stuff that Claritas could probably help with, but without paying them!

I have done this before, but in the past only after a product has been used for a while, so I could examine the current users, see what was working and what wasn't. Starting from nothing is proving to be a challenge.

posted by UMDirector to computers & internet (3 comments total)

Start with your competition and do your research based on their products. If you don't think you have competition, you're either wrong or are creating something that nobody wants or needs.
posted by rhizome at 12:27 PM on May 6

You could try doing a public beta. Not only will you catch more bugs than your internal testing, you can aslo collect feedback and demographic info.
posted by burnmp3s at 12:36 PM on May 6

Now, consider there are four principles that need to be addressed here: Market, Segment, Targeting, Positioning. So...

I would suggest the first thing to do is to make sure you fully understand the problem your software is designed to solve. Questions like: "Is there actually a problem here, or have we just figured a way to do something that we think is cool?".

Secondly, ask yourself: "Who has this problem?". That's your market.

Thirdly, ask yourself: "Is their problem a big problem, where significant loss, expense, inconvenience, time is incurred? Or is it a small problem, where workaround solutions exist but are not ideal?"

Fourthly, ask yourself: "How much will people pay to solve that problem?" Also, you need to know whether you can be profitable at that price... Assuming there is a subset of the market that can and will pay enough for the product to be worth your while, that is your segment.

Fifthly, ask yourself: "How can I best (i.e. most efficiently and effectively) communicate with that segment to convey the benefits to them (these are often different to the features of the product)?" This identifies the targeted segment.

Sixthly, ask yourself: "What benefits and by-products of using / having this product (e.g. prestige) does the targeted segment really care about?" These will be the position you adopt in the mind of the potential purchaser - it might be coolness factor, or quality, or ease of use etc.

Once you have all of these, you need to then address the 4Ps of marketing - Price, Product, Place, Promotion. Rather than go into it all here, fee free to email (see profile) if you want info / more ideas.

Further reading can be had at Crossing the Chasm; Innovator's Dilemma; Blue Ocean Strategy and Essential Drucker just for starters...

Good Luck!!
posted by mooders at 2:12 PM on May 6