(MB) Target Market Lesson

Target Market

TargetMarket.pngThe point of going into business is to make a profit by selling as much of your product or service as possible. Selling, we already know, has a strong relationship with marketing. So who do we market our product to? Your first inclination is to say "Everyone!" Certainly, we would love everyone to want our product, but the truth is, we probably won't have enough money to even begin to market our product to everyone. So we have to narrow the field and choose who we will market to. Those customers who are the most likely to purchase our product are our target market. It is those customers that we will market to.

Benefit of Knowing Your Target Market

There are a number of benefits that come from correctly identifying your target market.

  • You can more accurately judge the demand for your product or service.
  • You can fine-tune your product or service to better suit your customer base.
  • You can tailor new products or services to better meet customer needs.
  • You can design your marketing to more effectively reach your customers.
  • You can construct the tone, language, and attitude of your marketing message to better fit your customers.
  • By focusing only on potential customers, you increase the advertising efficiency of your business.

Steps in Finding Your Target Market

Look at your current customers - Who are they and why do they buy from you? Which ones conduct the most business with you? Are there more people like them around?

Look at your competition - Who are the competition's customers? What market does their advertising target? You are not going after their market, but will use this information to find your own marketing niche.

Defining Your Target Market

Now that you have an idea about your broad customer base, you will need to segment your customers by demographic, psychographic, and behavioristic.

Demographics - Demographics are quantifiable statistics of a given population including:

  • Age
  • Location
  • Gender
  • Income level
  • Education level
  • Marital and family status
  • Occupation
  • Ethnicity

Psychographic - Psychographics is the study of personality, values, attitudes, interests, and lifestyles. These characteristics include:

  • Personality
  • Attitudes
  • Values
  • Interests
  • Hobbies
  • Lifestyle

Behavioristic - Behavioristic incorporates the theory that marketing actions should be based on observable behaviors. The behaviors include:

  • Brand loyalty
  • Need for convenience
  • Preference for face-to-face interaction
  • Price vs. quality

Once you have segmented your customers then, evaluate your findings. Which segment will benefit most from your product? Are there enough customers in that segment to be profitable? Do you need to market to more than one segment? How will you reach your chosen segments? What kind of promotion or advertising will most likely appeal to that segment? Answer these questions and you should be able to paint a pretty accurate picture of what your typical customer will look like, the type of marketing they will respond to, and how they will purchase your product. All of these will lay the basis for your marketing plan.

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