What Exactly Is a Target Market?
A target market is a group of people who have been identified as the most likely potential customers for a product based on factors such as age, income, and lifestyle.
When a company designs, packages, and advertises its product, identifying the target market is an important part of the decision-making process.
How Do I Define the Market for My Product?
Part of developing a new product is imagining who will want it.
A new product must meet a need, solve a problem, or do both. Unless it reaches the level of indoor plumbing, that need or problem is unlikely to be universal. It is more likely that a subset of consumers, such as environmentally conscious vegetarians, science nerds, or outdoor enthusiasts, require it. It could appeal to a teenager, a middle-aged professional, a snob, or both.
Envisioning your likely target market is part of the product development process and influences decisions about packaging, marketing, and placement.
What exactly is market segmentation?
The process of dividing your target market into smaller, more specific groups is known as target market segmentation. It enables you to tailor your marketing message to each group.
Remember, you can’t be everything to everyone. However, you can be different things to different people.
As a vegetarian, I’ve consumed numerous Impossible Burgers. I am unquestionably a target customer. However, vegetarians constitute a surprisingly small target market segment for Impossible Foods, accounting for only 10% of their customer base.
That’s why Impossible Foods’ first national ad campaign was clearly not aimed at me:
This ad campaign’s target market segment was “meat eaters who haven’t yet tried Impossible products.”
Vegetarians and meat eaters eat plant-based burgers for different reasons and expect different things from the experience. Target market segmentation ensures that the company’s message reaches the right audience.
What Are the Four Primary Markets?
Marketers categorize consumers into four major groups:
Demographics: These are the primary characteristics of your target market. Everyone can be classified according to their age, income level, gender, occupation, and level of education.
Geographic: In the age of globalization, this segment is becoming increasingly important. It is necessary to consider regional preferences.
Psychographic: This segment considers lifestyle, attitudes, interests, and values in addition to demographics.
Behavioral: This is the only segment that is based on research into a company’s current customers’ decisions. Based on research into the proven appeal of previous products, new products may be introduced.
What Does a Target Market Look Like?
Each of the four target markets can be used to determine who a new product’s customer is.
In the United States, for example, there are an estimated 100,000 Italian restaurants. They clearly have a lot of fans.
A corner pizza joint, on the other hand, may appeal mostly, if not entirely, to a younger and more budget-conscious consumer, whereas an old-fashioned white tablecloth establishment may be dominated by older people and families who live in the neighborhood.
Meanwhile, a newer restaurant down the street may cater to an upscale and trend-conscious clientele willing to travel a long distance for the restaurant’s innovative menu and fancy wine list.
A savvy businessperson has consciously considered the ideal target market for the restaurant and has tweaked the menu, decor, and advertising strategy to appeal to that market in each successful case.
What Is the Importance of Target Markets?
Few products nowadays are intended to appeal to everyone. The Aveda Rosemary Mint Bath Bar, which costs $23 per bar and is available at Aveda beauty stores, is aimed at the upscale and eco-conscious woman who is willing to pay a premium for quality.
Cle de Peau Beaute Synactif Soap costs $110 per bar and is marketed to wealthy, fashion-conscious women willing to pay a premium for a luxury item.
On Amazon, an eight-pack of Dial soap costs under $5 and is well-known for its effectiveness.
Knowing who will buy a product or service is an important part of its success. Through additional marketing, advertising, and word-of-mouth, its user base can grow over time.
That is why businesses invest significant time and money in defining their initial target markets, and why they follow through with special offers, social media campaigns, and specialized advertising.
How Specific Should a Target Market Be?
It is conditional. A product may be designed for a mass market or a niche market, and a niche market can be a very small group indeed, especially in a product’s early introductory phase.
Some carbonated beverages aim for a nearly universal market. Coca-Cola needed to expand into 200 new international markets in order to maintain its customer base.
Pepsi Cola owns Gatorade, but the brand is marketed to athletes.
Poppi, which bills itself as a “Healthy, Sparkling, Prebiotic Soda with Real Fruit Juice, Gut Health, and Immunity Benefits,” clearly targets a younger, healthier, and more trend-conscious demographic.
What is your target market?
Step 1: Gather information about your current customers.
Identifying who is already using your products or services is an excellent first step in determining who most wants to buy from you. You can go after more people like that once you understand the defining characteristics of your existing customer base.
Depending on how someone connects with your company, you may have little or a lot of information about them.
This does not imply that you should add a slew of questions to your order or opt-in process solely for audience research purposes — doing so may irritate customers and result in abandoned shopping carts.
However, make use of the information you naturally gather to understand trends and averages.
You should think about the following data points:
- You don’t need to be too specific about your age here. It probably doesn’t matter whether your average customer is 24 or 27. However, knowing which decade of life your customers are in can be extremely beneficial.
- Location (and time zone): Where do your current customers live? In addition to determining which geographic areas to target, this allows you to determine what hours your customer service and sales representatives should be online, as well as when you should schedule your social ads and posts to ensure maximum visibility.
- Don’t assume your customers speak the same language as you. Also, don’t assume they speak the dominant language of their (or your) current location.
Spending power and habits: How much money do your existing customers have? What is their approach to purchases in your price range?
- Interests: Aside from using your products or services, what do your customers enjoy doing? What television shows do they watch? What other companies do they work with?
- Problems: What are your customers’ pain points? Do you understand how your product or service assists them in overcoming these obstacles?
- Lifecycle Stage: Are your customers most likely college students? Are you a new parent? Parents of adolescent children? Retirees?
Step 2: Include social data.
Social media analytics can help you fill in the blanks about your target market. They assist you in determining who is interacting with your social accounts, even if those individuals are not yet customers.
These individuals are interested in your brand. Social analytics can provide a wealth of information that can assist you in determining why. You’ll also learn about potential market segments you hadn’t considered before.
You can also use social listening to find out who is talking about you and your product on social media, even if they don’t follow you.
Step 3: Research the competition
Now that you know who is already interacting with your company and purchasing your goods or services, it’s time to see who is interacting with your competitors.
Knowing what your competitors are doing can help you answer the following questions:
- Are your competitors pursuing the same market segments that you are?
- Are they reaching segments you hadn’t considered?
- How are they putting themselves forward?
Our guide on how to do competitor research on social media walks you through the best ways to gather competitor insights using social tools.
You won’t be able to obtain detailed audience information about the people interacting with your competitors, but you will be able to get a general sense of their approach and whether it is allowing them to create engagement online.
Step 4: Determine the worth of your product or service.
This boils down to the crucial distinction that all marketers must understand: features versus benefits. You can list your product’s features all day, but no one will buy from you unless you can explain the benefits.
The features of your product are what it is or does. The outcomes are the benefits. How does your product improve or make someone’s life easier, better, or more interesting?
If you don’t already have a list of your product’s benefits, it’s time to start brainstorming. When you write your benefit statements, you’ll automatically include some basic information about your target audience.
Step 5: Construct a target market statement.
It’s time to distill everything you’ve learned thus far into a single, simple statement that defines your target market. This is the first step in developing a brand positioning statement, but that’s for another day. For the time being, let’s focus on developing a statement that clearly defines your target market.
Identifying the target market is a necessary step in the creation and refinement of a new product.
A target market can be translated into a consumer profile to which a product is most likely to appeal. The profile takes into account four major aspects of that person: demographic, geographic, psychographic, and behavioral.