Where does a business operate? Who does it aim to sell to? How does it specify the segment of customers that it sells to? The answer to these questions comes into the territory of successfully choosing a target market that suits the company and its products.
A dominant factor in a business being successful and efficient is for it to start by researching the different market segments that it operates within; and wisely choose what market will it be conversing with and selling to. The importance of knowing your target market lies in the fact that your business will know the price ranges of its products being compatible with the market’s capabilities. Your business will also use this information in getting acquainted with the interests and patterns of that segment, which allows you to create a marketing strategy that suits them and their interests.
In this article we will be reviewing the meaning of a target market, its importance to a business and the steps that your business should take in order to find the target market that it is looking for.
What is a Target Market?
A target market is another name for your customer base, the segment of the population that your product and your marketing campaigns are intended for. The people that you believe -after research- that are the most interested and compatible with your product.
Making assumptions about your target market is not the same as understanding it. Instead, it’s about attempting to understand its motivations and desires. The first step is to gather demographic information about them like age, gender, education level, occupation, and family situation, are all factors that might help you figure out what your clients need and how much they’re prepared to spend on it.
You should also think about who your customers are as individuals. What are their priorities? What is their way of life like? What do they like to do in their free time? The answers to these questions can help you gain a better understanding of your target market.
These are all factors that you should look into after deciding on your target market. This will help you have the right decision on multiple matters that are related to your product’s marketing mix: Price, place and promotion method.
The Importance of Knowing your Target Market
By identifying a target market, marketers can focus on the people who are most likely to buy the product. This results in research and funds being funneled to the clients with the best profit potential by limiting the population.
This is especially important for formulating your marketing strategies with the needed precision, since it would be extremely hard to make a marketing plan that suits all segments of a population with all its socio-economic, cultural and political differences.
It’s considerably easier to make media allocation decisions if you know who you’re targeting. Instead of buying ad space in every magazine, if your target market is young ladies, you can only promote in those that are popular with that demographic. Using a target market plan will save you money and provide you a greater return on investment. Media purchases will be more efficient because the amount of wasted audience — those who are unlikely to buy your goods — will be substantially decreased.
In a nutshell, having an accurate perception of your target market, will not only be a sales related decision, but a major economical one for your business as well.
The Steps to Understand your target market.
There is more than one step and numerous methods that you could follow in order to be able to improve your understanding of your target market, and how to choose them:
Understand What you Offer: Consider what problems your products and services address and, as a result, who they target. For example, if you run an import/export business, your services would be appealing to businesses with lawns particularly those who are too busy to care for their yard but can afford to hire someone to do it. This means that your target market would consist of higher-income adults with demanding professions and/or children who don’t have time or interest in lawn care but still want to have a lawn that looks good.
Perform Market Research: Understanding your target market entails not only understanding your clients, but also understanding the marketplace. Software like Quantcast, Alexa, and Google Trends provide a comprehensive perspective of the environment by discovering and assessing competitors, assisting in the acquisition of new customers, and allowing you to identify areas for your own improvement. Moreover, don’t forget that present and prospective consumers can provide some of the most useful information. Surveys, focus groups, and in-person discussions can help you figure out what your target market wants, why they purchase from your company (or don’t), and what you can do to improve your products. You can also get information about your customers by looking at data from your POS or CRM.
Know your Competition: To acquire a complete picture of the competitive landscape, conduct a competitive analysis. What are the companies that provide similar goods and services? What is their fee structure? What is it that they are doing differently? Remember to try your best to avoid going after the same consumer unless you have a daunting advantage, especially in a small market when your competitors’ businesses are well established.
To conclude, Knowing and understanding your company’s target market is more important than just having a base for your marketing campaign. It is a resource that will help you prove success, save costs and ultimately sell more and know who you’re competing with.
As a starting up entrepreneur, make this a priority of yours as it is a major pointer on an entrepreneur’s map to success.