In order to have a marketing advantage over the competition, it pays to know WHAT you sell and WHO you sell to.   At first this may seem simple: "I sell bicycles, appliances, sandwiches, or lawn service."  But the question is deeper than that, and understanding the concept of what I call business versus industry can help you make a quantum leap in market share and profitability.

In the context of what you sell and who you sell to, I define "business" as the technical description of the product or service that you provide.  For example, a bicycle shop may sell new bicycles, purchase, renovate and resell used bicycles, offer bicycle repair, and carry a line of bicycle parts, accessories, and clothing.  That would, in fact, describe the "business" you are in.  However, a business owner who thinks ONLY in this manner will not fully understand the market, the competition, or be able to take advantage of niche markets.  If you ONLY think "business" in this instance, you would consider other bicycle retailers as competition and sell on the basis of the features or quality of your products.  You would be ignoring other competition, potential customers, and opportunities to grow your enterprise.

It is necessary to expand your thinking to include what I call "industry."  By my definition, the "industry" you are in is defined by WHY people buy your product or service.  In other words, "industry" explains the benefits they receive from your product or service.  Confused?  Let's go back to the bicycle shop...

The obvious "industry" for the bicycle shop is transportation.  People buy bicycles for transportation.  Hopefully, bicycle shop owners can define market segments within this industry.  Some examples would be:

• College students using bicycles to get around on campus instead of driving and looking for a parking space.
• Low income folks who use the bicycle to get to work and shopping, where the bicycle is the only vehicle in the household, or the second vehicle in the household.
• Pre-driving age teens who use bicycles to visit friends, get to a job, or go shopping.
• High income, ecologically-minded folks who will bicycle to the office on a nice day instead of driving.

Knowing the above allows you to define demographics, buying needs and habits, and target your potential customers.  They each have different needs and wants.  The college students need a reliable bicycle that will hold up being outside the dorm in the weather, and one that can be secured so it can't be stolen (Remember the pictures of a bicycle wheel locked to a bike rack?  Or a bike without wheels locked to a rack?).  Low income folks using the bicycle on a daily basis want a comfortable ride (balloon tires / big saddle?), fenders to stop puddle splashes, decent lights for night, and baskets to carry groceries.  Pre-driving age teens want  "cool" or "hip" (or whatever the current word is), and are a unique market because Mom and Dad may have a say in what is purchased (durability / safety) and be providing all or part of the purchase price.  The high income folks can afford and will want the latest technologies (think Lance Armstrong and titanium and carbon fiber).

The above segments or niches all have different demographics and you will need to target each of them individually.  But wait!  There's more... the above only  addresses the transportation "industry."  What about the exercise "industry?"   People buy bicycles for exercise.  Sadly, that demographic is me... middle age, overweight, not sports oriented.  When my doctor told me to get more exercise and lose weight, I had several options.  I could buy a bicycle, join a health club, get a treadmill or other type machine, or purchase any of the exercise infomercial gadgets show on TV.

The bicycle shop owner who knows that they are also in the exercise "industry" can market to an entire new demographic.  They also can develop a competitive edge ("Why sit on a stationary bike in a cement block building with a bunch of other sweaty folks when you can be out exploring new neighborhoods, meeting people, and smelling the roses?")  It is important to do that, because the health club will be promoting, "Why get a bicycle?  They need maintainance and you have to deal with dark mornings and evenings, rainy days and yappy dogs.  Here, in the health club you can ride the stationary bike while watching TV, it's airconditioned and the juice bar is just next door."  Bicycle shop owners who know they are also in the exercise "industry" can expand their market by "getting a piece of that pie" too.

Bicycle shops are also in the social recreation "industry."  The demographics of that are young active professionals who like to do physical activities in a group setting.  They road bike or mountian bike on weekends, often meeting at a starting location and gathering for dinner at the end of the day.  As they could also go rock climbing, kayaking, hiking, horse riding, or parachuting, all of those activities become competion for the bicycle shop.  Knowing that, the owner can target market into those groups and get a "piece of that pie" as well.

The "business" versus "industry" example is true for all types of businesses.  If you take the time to think "industry" you can increase your customer base, and increase your profits.