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- Medical & Healthcare
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- B2B & Manufacturing
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- Finance & Blockchain
What is a target market and why does it matter?
A target market is, simply put, a set group of people you have chosen to target with your products or services. Spoiler alert – you can’t just market to “everybody.” This will waste your time and money, leaving you with sub par sales and conversion rates. Identifying your target market ensures that you are delivering the right message to the right people at the right time.
It is important to note that a target audience is similar, but different. A target audience is a subset of your target market that shares particular attributes and has specific needs. Essentially, you can think of target markets as a collection of audiences that may be interested in your product or service.
How to Identify a Target Market
Identifying your target market can feel so simple yet challenging at the same time. But doing so lays the foundation for where to focus your marketing efforts. Whether you are a brand new business or looking to reinvigorate your existing business, there are a few key steps to take:
A good starting point is to take a look at the people who are already customers. Do they have any common characteristics or shared interests? Even if your customer base seems diverse, it is highly likely that there will be some type of common denominator among them. Once you start to recognize these commonalities, you can begin to fine-tune these existing customers into a target market.
When exploring potential customers, it is best to start in broad terms. Once you have identified an ideal demographic, you can begin to refine, through various qualifiers – the specifics of your ideal customer. Keep in mind that it is important to consider who your customers are as people, not just numbers on a spreadsheet. How do they spend their time? What do they value?
- Look for shared behaviors among your existing customers
- Use audience data to review demographic information about your customers
- Analyze your competitors to see who they’re targeting
A good starting point is to take a look at the people who are already customers. Do they have any common characteristics or shared interests? Even if your customer base seems diverse, it is highly likely that there will be some type of common denominator among them. Once you start to recognize these commonalities, you can begin to fine-tune these existing customers into a target market.
When exploring potential customers, it is best to start in broad terms. Once you have identified an ideal demographic, you can begin to refine, through various qualifiers – the specifics of your ideal customer. Keep in mind that it is important to consider who your customers are as people, not just numbers on a spreadsheet. How do they spend their time? What do they value?
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Look at Your Competitors
Looking at your most direct competitors is an excellent way to glean information about your target market. Examine their website and look up their social media platforms. What type of content gains large responses? Who is engaging with their posts? If they have been selling their product for some time, they probably already know your audience very well. As you look at your competitors, here are a couple things you should think about:
- How does your product or service differ from that of your competitors?
- Is there any aspect of their platform you feel is lacking that you could improve on?
Target Market Segmentation
Market segmentation takes your target market and refines it into various, digestible groups. Creating these subsets helps you to better understand your target audience and use that information in tailoring your marketing strategies. There are four primary categories of segmentation, which are demographic, firmographic, psychographic, and behavioral.
- Demographic segmentation is extremely common and is one of the most simple to use. This type of segmentation divides a market using elements such as age, income, family size, race, gender, occupation, level of education, religion, and nationality.
- Firmographic segmentation is similar to demographic segmentation, except that demographics look at individuals while firmographics look at organizations.
- Psychographic segmentation looks at psychological aspects of consumer behavior by dividing the market into categories like interests, attitude, social class, opinions, lifestyle habits, personality traits, and values.
- Behavioral segmentation divides markets by decision making patterns and behaviors, like purchase, consumption, benefits sought, lifestyle, degree of loyalty to a brand or product, and usage.
The Takeaway
The target market you identify through this process will be the foundation of your entire marketing strategy. This research will provide you with insights on niche markets within your field, underserved areas, strategies for pricing, and curating your products or services to fill in the blanks.
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