How To Identify Your Target Market?

Target MarketUnderstanding your target market and their behavior patterns is critical and probably one of the most underrated aspects of the planning process.  How can you create a great product or offer a great service if you don’t know who your target audience is, what they like and need and how much they are willing to pay?  Knowing your target market has many benefits to your business:

 

  1. Makes it easier to reach your target market with focused advertising and marketing outreach.
  2. Makes it simpler to optimize your product catering to the target market’s needs and wants which is important for product adoption and customer retention.
  3. Helps to better understand your market size which enables you to make more accurate financial estimates.

Businesses struggle to define their target market and too often set their sights broadly, trying to please everyone.  One of the biggest marketing errors that brands make is not identifying the target market properly resulting in all of their marketing efforts to be seen by the wrong people which make it much more challenging to convert to customers.

Before you start marketing your product/service and creating your marketing campaign, you need to identify who your target market is.  A target market is composed of a core or primary target, a secondary target and a tertiary target.  The core is composed of consumers who will definitely buy your product.  The secondary target is composed of consumers who may want to purchase your product through persuasive advertising, from word of mouth knowledge and by trying the product initially.  The tertiary target audience is the group of consumers who want to wait and see.  They will wait for the product to be popular, the price to be within their purchasing range and if the product will answer their need at one point in time.  The process of identifying a target market is called market segmentation.  This simply means that you break down the market and define the audience or consumer by:

  • Demographics: Age, Income, Family Size, Education, Occupation, Gender, Marital Status, Nationality/Race
  • Geography: Location, Region of the World, Climate
  • Behaviors: Brand Loyalty, Value of Quality
  • Psychographics: Personality, Attitudes, Values, Lifestyle, Interests/Hobbies, Behavior

Here are some key areas to start identifying who your target market is:

Analyze Your Product/Service USP (Unique Selling Proposition)

  • Try to understand your products/services unique selling proposition or try to understand the problem your product/service is solving for your customers. This will help to begin to identify who would pay for your product/service.
  • Define your product/service features & benefits. A feature is an element of what something does or what it is. For example, a car’s features may include ski racks or an upgraded stereo system. A benefit is a positive result that the feature delivers (I get to go skiing). You can then define your benefits by whether they are functional or emotional. A functional benefit is directly related to the functionality of the feature. For example, an upgraded stereo provides higher-quality sound. An emotional benefit is one that evokes a feeling or emotion. An example is an upgraded stereo might make the user feel like a rock star. From here, make a list of people who have a need that your benefit fulfills.

Know Your Competition

  • Evaluate your competition’s marketing strategy can help you analyze your own target market.
  • Look at your competitor’s USP, who are they targeting, who are their current customers, study their advertisements, marketing campaigns, pricing strategy, products/services, etc.
  • Be sure to differentiate what you are doing from the competition, don’t go after the same target market.

Look At Your Current Customer Base

  • Look at who is already using your product/service. Identify who the heavy users are and their buying patterns, look at their demographics, look for common characteristics and interests.

Choosing Your Target Market|Creating A Customer Profile

  • Based on your product/services USP, your positioning in the marketplace vs the competition, and who your current customer base is, identify who not only has a need for your product/service but who is most likely to buy taking into considering demographics, geography, behaviors and psychographics.
  • Rather than make assumptions that people will need your product/service, conduct research to get a more realistic picture of your audience.
    • Surveys: most common and least expensive. Conducted online, in person or by phone. Can tap into current/potential customer pool, client’s, and vendors for feedback.
    • Focus groups: more expensive, gain feedback on product/services by asking questions in an interactive group setting with a moderator.
    • Search Online: blogs, forums, articles, etc. that talk about your target market or that talk to your target market.
    • You’re Network: tap into your social network to get feedback, opinions and advice.

Evaluate Your Decision

  • Once you’ve decided on a target market, you need to consider the following:
    • Are there enough people that fit your marketing criteria?
    • Do I fully understand what drives my target market to make buying decisions for my product/service? How much purchasing power do they have? Who influences their buying decisions?
    • Can the target market afford my product/service?
    • Can you effectively reach the target market with your marketing message? Are they easily accessible?

Identifying your target market is essential to successfully marketing your product/service.  It will be important to reassess your target market periodically as the marketplace shifts and evolves.  Staying ahead of the curve and adjusting your planning accordingly is an ongoing process.

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