Two weeks ago, one individual walked into my offices requesting for business advice. He said he wanted to start an agribusiness enterprise that he thought could do well.

He then went on to ask me the question: "Do you think there is market for my product?" According to him, there are many players and he was not sure about penetrating the market!

I offered advice to him but I daresay he is not alone! There are many people who would like to start small enterprises but they are not sure about the opportunities present in the market.

So we must pose a question: why don't our entrepreneurs undertake some basic research before they invest?

This is one of the reasons why most businesses fail before one year in operation. Entrepreneurs must know that the choice of a business not only depends on the availability of raw materials, personal ambition, etc, but must also largely depend on your capacity to identify and target a niche market for your product and/or service.

In order to market your product or service, it is imperative that you tailor your marketing and sales efforts to specifically reach the segment of population that will most likely buy your product or service.

It is critical that you first determine or clearly identify your primary market. This way, your energies and money will be spent more efficiently and effectively. It is indeed very simple - if you don't know who your customers will be, who will you target? If you don't know who your customers are, how will you be able to assess whether you are meeting their needs?

Since success depends on your being able to meet customers' needs and desires, you must know who your customers are, what they want, where they live and what they can afford so that you package your product/service appropriately.

In this regard, to be able to target your niche market, you must simply define who your primary customer will be and the market should be measurable, sufficiently large and reachable.

Once you have defined your target market, you should determine whether the target audience is sufficiently large enough to sustain your business on an on-going basis. In addition, your target market needs to be reachable and you must put in place systems of talking to your target audience so that there is always information flow about your products, and the tastes and desires of your target market. This way, you are always on top of not only the quality of your product but you also understand the perspective of your product end-user.

To be able to identify the target market, an entrepreneur must first identify why a customer would want to buy your product/service, then segment your overall market and then research it.

The first step in identifying your target market is to understand what your product has to offer to a group of people or businesses. You, therefore, need to identify your product's features and benefits. Always note that features are valuable and can certainly enhance your product while benefits will motivate people to buy.

Once you know what your product has to offer and what will make customers buy, you can begin to identify common characteristics of your potential market. The nature of entrepreneurs worldwide is the need to target as many people and groups as possible. To achieve this, however, you must have a promotional strategy that targets specific people and groups and this can be done through market segmentation.

This is a process of breaking down a larger target market into smaller segments with specific characteristics. Each of these groups has different wants and needs and, therefore, segmentation will help you customise your product to meet the specific needs of a narrowly defined customer group.

For example, a job placement firm targets unemployed people, but this target group will be broken down into recent graduates and professionals who are in transition. This is because these two groups have different characteristics, needs and wants.

A prudent entrepreneur also needs to analyse these identified segments to determine if it is profitable and feasible to target each identified segment. If all the segments are to be targeted, then the marketing strategy for each segment may vary by product, price, promotional material and distribution methods. Entrepreneurs must try to undertake this market identification process so that they do not jump head-fast into production without a clear grasp of who is being targeted as the end-user.

The writer is the director of the Small Enterprise Development Agency Uganda.