What is the Target Market?
Not all products are consumed by every customer and every product is used by a distinct set of customers who are willing to purchase it. The target market is that set of customers who are in need of a particular product and for which the company, at times, modifies the product. Target marketing requires breaking down the market into different segments and draft marketing strategies according to the requirements of every segment for increasing the market share.
How to Define Your Target Market
The current situation in the business world, creating a well-defined target market has become a lot more important than before. No businesses can afford to target everyone. Small businesses can compete effectively by targeting niche marketing.
Targeting a specific set of customers does not mean that those people are excluded who do not fit the criteria. Rather, target marketing strategies allow companies to focus on their brand message and marketing dollars on a particular market that will be more likely buying from a particular business than that of other markets. Target marketing is a very efficient, affordable and effective way of reaching potential clients and generating business. Below mentioned are some tips that are useful in identifying your target market:
- Determine your current customer base: This involves assessing who are the current customers and why they want to buy from you? Search for those common interests and characteristics that the people share.
- Analyze your product or service: Prepare a list of features that your product/service has to offer and also list the benefits it provides and how it can benefit customers.
- Look for competitors: Determine the target segment of your competitors. Targeting the same market may result in loss of time, money and effort. Try to find a niche marketing which has been overlooked by your competitors.
- Consider the psychographics of the target market: Psychographics involves analyzing the personal characteristics of people like their attitudes, lifestyles, interests, behaviors, values, personality and hobbies. This allows determining how your product will fit into their lifestyles and which feature is appealing to them the most.
- Select particular demographics: It is important to not only determine who needs your product/service but, also those who are most likely to buy it. In this process, you need to assess certain factors such as gender, age, location, education, income level, occupation, ethnic background, family and marital status.
- Evaluate your decision: After a target market has been decided, ensure that you have incorporated important factors such as whether there are enough people to fit within the criteria, have you understood the decision-making factors of target market, will the target segment really benefit from the product/service, is the product/service affordable and Is the segment easily accessible.
Target Market Analysis
Target market analysis is the study of potential customers and it helps in determining exactly who you will be selling to. Target market analysis focuses on five ‘W’s and H which are:
- Who: This involves finding out who are the potential customers. What are their genders, age, education and income level, occupation, etc.?
- What: Ask the target segment what raised them to buy the product/service. Which interest or needs were underlying this decision and what features or services are they interested in buying?
- When: Determine when the customers are more likely willing to buy the product/service. Does the purchasing process takes place seasonally or there is a particular buying pattern?
- Where: Get to know the location of your customers. Where do they live and work? What is the area of that location? What is the population size?
- Why: In case you can determine why people want to buy your product and not from any of your competitors in the market.
- How: Businesses should also want to know how their customers behave. What are their lifestyles and buying habits?
When conduct target market analysis, first thing is first, find out what you really want and then start gathering information. Conducting a target market analysis is not an easy task. But, marketers have different mediums and tools for this purpose.
In the first place, you can analyze your business historical sales data. What were your average purchase price, seasonal sales information and busiest and slowest sales days and weeks? Using your social media accounts’ stats you can get the target customer demographic data and know their age, gender and locations. Interview your customers can be quite helpful and you can as much as information you need for target market analysis.
Target Market Strategies
Businesses can select one market or multiple markets for targeting customers. These strategies are divided into four types depending on the number of target markets:
Single Segment Marketing
This marketing strategy also known as concentrated strategy focuses its marketing efforts on one market segment. Single segment strategy is good for small businesses with limited resources.
Multi Segment Marketing
This strategy is also known as differentiated marketing strategy. Companies try to offer differ marketing mix to the different segment. The products and services a company offers may not be varied. Mostly the promotional messages and distribution channels are varied. In simple words, customized marketing mix (product, price, place and promotion) are offer a specific segment.
The product specialization is a marketing strategy where a firm target a specific market segment. The firm has specialized in particular product and service and it has the ability to customize it according to the customer needs.
Full Market Coverage Marketing
This marketing strategy is also known as undifferentiated marketing strategy. This strategy focuses on the entire target market. This strategy offers a single marketing mix that means one product, price, promotion and placement (distribution) and try to reach maximum customers in the target market. According to Pride and Ferrell, the success of the undifferentiated strategy is dependent on marketers’ skill and resources and how they use these to reach the entire market.
Target Market Examples
Target Market of Restaurant
McDonalds is a chain of fast food restaurant and has a target market of students, professionals and employees who are in the age group of 8-45 years and belongs to low and middle-income groups who have a careless and easy-going personality.
Target market of Walmart
Wal-Mart is an American retail chain who target people who belong to low or middle-income groups of the society who strives to meet their daily needs. Wal-Mart does not sell products that are considered by anyone as high-end products.
Target market of Apple
The Apple product development and business strategy are focused on innovation, high quality and easy to use products. The target market of Apple usually comprises of higher income people which include the business person, teenagers and college, university students and adults which makes communication easier for them.