Defining Your Target Market
In an age where consumers have nearly unlimited options for choosing products or services, having a well-defined target market for your business is essential. Knowing who your customers are, their specific needs, and what makes them unique is an important part of tailoring your advertising and marketing efforts.
Many small businesses today define their target markets broadly as consumers in the area who purchase their products or services. And while this may have worked in the past, to be successful in the future, you need to have a stronger understanding of who your customers really are.
The first step in forming your target market is to understand the basic characteristics of your customers. In marketing we call this demographics. Demographics can be defined as the basic distinguishing features of a customer. Some popular demographic features include:
Gender (Selling Wedding Dresses vs. Tuxedos)
Location/Region (Snow shovels in Maine vs. Beach Umbrellas in Florida)
Income Level (Ferrari vs. Ford)
Education Level (5th Graders vs. College Freshmen)
Ethnic Background (Cultural Tastes & Preferences)
Marital Status (Wedding venues vs. Divorce Lawyers)
Occupation (Doctors vs. Plumbers)
Understanding these features of your customers will help you direct your marketing to the right people. Reaching a target market with your ads and other promotions is essential to making the most of your promotional budget and time. Simply put, no business large or small can effectively target all the customers in a market.
This will help you put market to customers who are likely to purchase your products or services. Saving you time and money.
Determine & Evaluate Your Customer’s Needs
In its most basic terms marketing can be defined as the process of communicating and delivering value. To successfully determine your target market, you need to understand what your customers are looking for in your product or service.
Take the popular online retailer Amazon for example. Amazon knows people are shopping for everything from DVD players to shoes. They understand their customers want great deals and the best shopping experience possible. So how does Amazon form their target markets? They group their customers together based on their unique needs and demographics.
Students and millennials are often a popular market to target for online retailers. Amazon caters to students with huge discounts to their Prime membership as well as great deals on textbooks for back to school. They also offer discounts to and memberships to families to help save money on diapers and other essential items.
Amazon is genius with their marketing efforts and how they segment their target markets. With discounts and advertisements tailored to their largest customer markets, it’s no wonder why Amazon is one of the world’s largest retailers.
Analyze Your Industry & Competitors
One of the easiest ways to gain a better understanding of who should be in your target market is to research your industry and largest competitors. Whether you sell baked goods or bone density scanners, chances are there is an established market and other companies selling your same product or service.
If you truly don’t know where to start, try understanding what consumers look for in your product and why they would choose a competitor over you. If you can do this, you will understand how you can tailor your offering to their needs and communicate its value.
Understanding your target market is one of the first steps to creating a successful marketing plan. Knowing who to direct your message to and how to turn that message into leads can be a challenge. Starting out, you need to understand that defining your target market is a process. This process my require research and sometimes trial and error.
As long as you have an initial plan in place to approach and build a conversation with potential customers, the rest will fall in place.
Ready to start talking about improving your brand? Think VIG!