Identifying target markets for your business
There is only one winning strategy. It is to carefully define the target market and direct a superior offering to that target market. ~ Philip Kotler
For any business to grow and be successful, its customers play the most vital role in the story. However, not entering the right market and restructuring the strategy is one of the businesses’ most common mistakes. To serve your customers, it becomes essential for businesses to know and find who they are.
Although it is obvious one cannot box their efforts based on the customer profiles, it is always a good choice for the company to have a specific customer base in mind. It does not just help to create or customize the products or services, keeping the requirements in mind, but also makes the customers feel a more refined and satisfactory experience.
Identifying a correct target market is vital because getting it wrong can cost you a lot of time, money, and effort. To help you identify and penetrate the markets better, we have covered everything about the target markets in this article.
What is a target market?
A Target market is the core customer base of any business that is most relied upon to generate the revenue the company aims for. The target market’s customers are those most suited to your products or services. It could be either a group of people with certain common characteristics or some specific companies in a niche market segment.
Instead of just basing the decisions on the assumption of the target market, any business should try to go a step beyond to identify them better. Find out about their needs and motivation and the pain points that can make them potential customers for your business.
What are the factors that help in identifying the target market?
Specific factors that businesses must consider while identifying their target markets are:
- Basic demographics like age, gender, occupation, etc.
- The needs of the customer
- The average budget they’re willing to allot
- The lifestyle of the customers
- Product liability in the market
- Standard terms of sales etc.
How to identify your target market?
Finding your target market is not as easy as it seems. It requires more than just mere guesswork of your potential customers or their demographics. It rather requires a more detailed analysis of various aspects. However, some of the strategies you can use to identify the target market are:
1. Examine what you’re selling
Identifying the exact problems that your products or services solve and the customers to whom it appeals the most is a very crucial task. Weigh the solutions you offer based on variables like affordability, availability, trend, etc. And based on this, find out more about where you can find those customers and what can be the easiest way to pitch them.
For instance, if you are a skincare cosmetic brand, your service would be most attractive to specific customers who are facing skin care issues or are wealthy enough to afford a skincare routine just for its sake.
Thus, it could be said that your target audience is dependent on the price variable and the number of people suffering from skin care concerns that your products claim to help them with.
2. Conducting market research
To conduct market research in this era is more about acing the use of analytic tools and comprehending the patterns that the numbers suggest. It is one of the easiest and most accurate ways of doing market research to find the target audience.
Use tools like Google trends that help you comprehensively identify the competitors and analyze their services. These tools help you with the demographics of the customers, and enable you to find out the areas to improvise in.
Additionally, you can also try to seek some insights and data from existing or potential customers. It could be either in the form of paid surveys or feedback forms, or in-person calls occasionally to ask if they have any specific concerns to share. These ways will help you know more about what your target market needs, the reason why they’ve turned towards a competitor and the suggestions from their end that can make the products or services more appealing. Using the CRM data for this can also be a good alternative.
3. Use Market Segmentation Tactic
Market Segmentation is a tactic that distributes or segments the groups based on multiple categories. These categories include demographic information that is more surface level and around factors like age, gender, education, marital status, family status, ethnic background etc. While the other category is Psychographic details, which covers more psychological facts in the form of variables for categorization. These variables are values, desires, goals, behaviour, lifestyle preferences, personality type etc.
Thus, for identifying a target market, considering the demographic and psychographics is essential to get a complete analytical view of the market.
4. Assessing the competitors
Identifying and assessing the competitors can be an easy way to find accurate data to find the target market. It could be by doing an analysis based on their product or service specification or using the analytics tool as suggested.
Find out about the other businesses in a similar niche covering the same geographic proximity. Check their price range and carefully assess the things they are doing differently or their approach to tap and convert the new potential customers.
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How can businesses use target market analysis data?
After you have successfully ventured through all the tactics suggested to collect data to identify the target markets, the next obvious step is to use the data correctly to get tangible business revenue results.
- Restructure the pricing strategy- When conducting the target market analysis, you will have an idea about the pricing discrepancy if that exists. Use this data and restructure your pricing strategy to tap into a wider target market.
- Create expansion Opportunities- You might have come across areas with scope for finding your target audience, but those were not the areas you served. So, consider those areas and try franchising or expanding your business to more locations.
- Focus on product or service development: If you have been able to find some holes in the market, then use them as your strength and focus on creating a product or building a service around it.
- Marketing- A detailed analysis of identified target market can be the most vital base for all your marketing strategies. Check if your analyzed data favours the next marketing campaign that you are willing to run. Also, aim at creating sentimental value for your target audience’s pain points based on your analysis.
With this, you are well equipped with everything required to identify your business’s target market and implement it all with your analysis. But we won’t deny if you say that ‘it is easier said than done.’
If you are a business owner in Canada and have any questions about target markets get in touch with the expert team at Bronte Bay and let us help you discover the true potential of your business by identifying the target markets. To know more, book a free 30 min call with us today!