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As a small business mentor, I read lots of business plans. Many founders I mentor, attempt to convince me that their business will be incredibly successful by telling me how big the overall market they are entering is. They go on to tell me that their product or service is so much better than the competition as a way to justify that they can capture a significant share of this large market for themselves.

Large markets are like big shiny objects and many founders look at large markets and see dollar signs as they consider how they can own their piece of the pie.

When the market is large with little product differentiation, we call that a thick market. Dry cleaners and liquor stores operate in a thick market. By contrast, some businesses operate in what is called a thin market. Thin markets target a small niche with much more relevant products or services. Today’s customer is looking for a tailor-made solution , not a “one size fits all” solution that is just good enough.

Recently I saw an ad for the online dating service called Farmersonly.com that segments the online dating service to a specific slice of the dating market. While a thick market dating site like eHarmony might expose you to lots of potential, but poorly matched dates, a thin market dating site like Farmersonly will give you fewer, but more relevant potential dates.

Other thin market sites including BlackPeopleMeetup, SingleParent, and OurTime, each chose to focus on a small slice of the overall dating market and are coming on strong and displacing some of the old time thick market dating sites like eHarmony.

In thick markets, you have a lot of competition and limited differentiation while in thin markets you have limited or no completion based on product or service specialization.

Your approach to marketing is different depending upon if you operate in a thick or thin market.

In thick markets, it is often about your company’s name recognition and you benefit from brand marketing to raise the level of your brand’s name in the consumer’s consciousness and to make a positive association with your product or service in the customer’s mind.

In thin markets, it is more about making the prospective customer know your product or service exists as a solution. With thin markets, prospects require an education to help them refine their problem statement.

Do you operate in a thick or thin market and are your marketing efforts properly aligned?