If you’re running a business, your success lies in the ability to meet the key needs of your (potential) customer, But, How To Find Your Brand’s Target Market?
But clients have different preferences and tastes, due to which it is impossible to work with everyone – the “universality” of the product makes it an average product, with average characteristics that no one buyer likes completely.
Companies are trying to find “their” customers who will be most satisfied with the company’s product. Let’s consider the essence and concept of the “target market” in marketing, characterize its main types, and take a look at how to make a correct description of the target market.
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Target Market – Why it’s Important
Target market is a key concept in marketing. Depending on which type of business you run, it could mean different things:
- B2C industry – a specific group that you are trying to reach.
- B2B industry – companies you plan to sell your product or service to.
Members of the target market are thought to be more interested in using your product than anyone else. So, your target segment should be considered more profitable to work with, but you need to deeply understand who the people/companies in your target market are, understand their interests, desires, and behaviour.
The importance of determining the target market is also confirmed by CB Insights data. According to the company, almost half of the businesses – 42% – stop operating because they didn’t find the target market. But the fact that they didn’t find the target market doesn’t necessarily mean that one doesn’t exist.
Another 29% of businesses closed for a very trivial reason – they ran out of money. This can also be directly related to market analysis. After all, if a business doesn’t make money with a good product, it mostly means that:
- The advertisement was aimed at the wrong audience;
- The advertisement was inappropriate (e.g., the use of TikTok memes in a product ad for seniors).
And just having a detailed and quality market analysis will help you to avoid both of these problems. If you know exactly who you are trying to reach, you can create the advertising with a high response rate, choose the most attractive packaging or location for the sales team.
Here’s an example. Suppose your company sells toothpaste. If your audience is office workers aged 25-35, they’re probably going to focus on product features such as whitening or refreshing characteristics; they’ll pay attention to packaging design and “smart” statements about the product’s effectiveness.
If your consumers are elderly people over 50, they are more likely to prioritize the “gum protection” and “gentle care”, they will pay more attention to the price of the product and pay attention to the presence of familiar natural ingredients in the composition.
Types of Target Markets
Usually, the target market is divided into 2 groups: primary and secondary. These markets have different purchase motives and approaches to product selection, they differ in size, behavioural and other characteristics.
The primary target market is the main market of the company, it brings the main income and profit; representatives of the market are direct initiators of purchase of your product/service and have the expressed need to buy the product which the company offers.
A secondary target market is a narrower group of buyers, which has one of the following characteristics: insignificant size, low involvement in the purchase of goods, possibility to make an influence on the primary target market regarding product choice. So, your target market could be separated into the following groups:
- Customers who can buy your product spontaneously;
- Customers who can influence the primary target market’s product choice;
- Customers who could potentially buy the product in the future;
- Customers whose numbers are small and whose buying behaviour differs from the primary market
Description of the Target Market
The segment of the target market that you plan to win has to be described in great detail. If detailed enough, it will allow you to understand your customers, their real needs, which communication channels are most effective to use to promote the product and a lot of other preferences which can help you to sell your product more effectively.
There are four criteria that allow you to assess whether you have chosen the right criteria for describing the target market segment:
- The value of the parameters by which the target market is described should be common for the target market and different for all other consumers of the market.
- The parameters of the description of the target market must be related to the decision to buy the product.
- The combined target market according to the set parameters is significant in sales volume and potential profit for the company.
- The parameters that form the basis of the target market description should allow for quality targeting when planning advertising campaigns.
The information which is going to be used as a basis for your potential market description can be divided into 7 important groups: description by demographic, geographic, behavioural, and psychographic characteristics; description of key drivers of purchase; definition of market size and trends.
Let’s consider each group of parameters in more detail.
Demography helps you to define the boundaries of the target market in terms of age, income, gender, occupation, nationality, education level, etc.
This information is very helpful when choosing communication channels and planning advertising campaigns for a product. For the B2B industry, such characteristics may include:
- the type of industry and sector of the economy;
- age of the company;
- sales volume and company size;
- the headcount;
- existence of the branch network, etc.
Geographic characteristics help you choose the area you plan to serve with your product. Analysing geography, you need to include the type of area served (city, region, country), population density and size, and in some cases even climatic conditions.
It helps to determine the lifestyle and personality of customers. Knowing that allows you to choose the right style of the advertising message and key images for the image of the product.
Psychographic parameters include different perceptions of the buyer about themselves: not only how the buyer perceives themselves, but how they would like to see themselves.
The B2C buyer’s lifestyle can include family background, vacation preferences, favourite TV shows; hobbies, political affiliations, preferred car brands, cosmetics, perfumes; and ideas about the ideal life.
In describing the lifestyle of a B2B buyer, you can tell what stage of the business the potential client is in, what news or magazines he subscribes to, whether he does charity work, what management style he follows, how widely he delegates authority, etc.
Behavioural characteristics allow you to understand the basic pattern of product selection and purchase in the market. These include the reason for the first purchase, the average number of purchases per year and the intervals between purchases, the average volume of 1 purchase, the speed of the decision to purchase, the preferred place of purchase, the source of information about the product, how the product is used and preferences for payment/delivery of the product.
Key Buying Drivers
An important block in the description of the target market is the definition of key purchase drivers. We can distinguish the following frequently used parameters for evaluation: quality, brand, price, certain product features, product advertising and packaging, service level, returnability and warranty, location, etc.
Size of the Target Market
It is advisable to add information about the size of the target market to the description of the target market. This information allows you to make sure that the potential customer base is large and the company will be able to make the necessary level of profit and grow.
Key trends in market development speak to the opportunities, stability level, and growth prospects of the segment, so including this information in the description of the target market is essential.
Trends need to be assessed in the following areas: the impact of economic and political conditions of the country on the market, market growth rates, the growth potential of the consumer base and trends in customer preferences, and technological market trends.
Identifying and describing your target market in detail by no means guarantees that your business will be successful and generate millions of dollars in profits.
But you can ensure that you have a better understanding of what you do and for whom you do it.
Doing these two things is only a supportive process – by doing so, you’ll be able to design and run more effective advertising and marketing campaigns that won’t target everyone at once (or worse, the wrong audience), but specifically those people who are most likely to buy your product/service.
This way you can not only save a lot of money by avoiding unnecessary campaigns, but you can also more clearly understand the growth potential of your business and which markets you can/should expand into in the future.
This is not a complete list of secondary, but no less important data for your business, which you can get by determining the target market of your business.
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