A target market is simply a group of people with something in common – things like age, gender, opinion, interest, or location, – who will purchase a particular product or service. Your market can be broad or specific in scope, and it is unique to each business or industry.
Knowledge and understanding of your target market is crucial to the viability of your business. You have to know if there is enough demand for your product, or enough interest and need for your service. You have to know how to communicate with your customers, and understand their thoughts and behaviours.
Without a comprehensive understanding of your target market, you can’t make smart choices about your front end offers, marketing strategy, pricing structure, and product or service mix. It’s like driving a car with a blindfold on – you’d be headed for disaster.
In addition to being essential to confirm assumptions and understand purchase motivations, market research is something you will need to get into the habit of doing on a regular basis to monitor trends and stay ahead of the competition.
Identifying your target market is not always easy, but I promise it will pay dividends.
Here’s an easy, step-by-step process to identify your target market.
You’ll already have an idea of who your target market is – or who you want it to be. Start by describing who you think your target market is in two or three sentences on your pad of paper.
You need to find the group of people that has these four characteristics:
- They have a particular need, want or desire.
- They have the financial ability to purchase your solution to their need, want or desire.
- They have the power to decide to purchase your product or service.
- They have access to your business, through a physical location, Internet or catalogue
First, take a look at what it is you offer or provide your customers.
To find the group of people with the characteristics listed above, you first need to answer the following questions about your product or service:
|1. What is the need, want or desire that my product or services fulfill?||2. What does my product or service cost?||3. Who makes the decision to purchase my product or service (who has the power or authority)?||4. How are my products or services accessed?|
|Does your offering primarily fulfill a desire, or serve a need or cater to a want? What is it?||Do you offer a high-end product, or low-cost alternative? Do you sell large items, like a kitchen appliance, or small items, like household cleaning products?||For example, if you provide a product or service for children, their parents are the people who make the decision to make a purchase.||Does your ideal customer need to live in the same city or region as your business? Or can they access your products online, or through a catalogue?|
Now look at the demographic and psychographic characteristics of the people that need, can afford, access and decide to purchase your offering.
Answer the following demographic questions about the people who use your product. Some of the demographic information in this table may be less important than the rest (like ethnicity or religion) depending on your product or service and the market your are trying to attract.
|Age||In general terms, what is the age range that my product or service caters to? Children? Teens? Adults? Seniors?|
|Income||How much do they have to make to afford my product? Is this single or double household income? Low? Medium? High?|
|Gender||Does my product or service appeal to men, women, or both?|
|Generation||What is the generation of my customers? Based on the age range I identified, are they baby boomers? GenX? GenY? Where do they stand in the overall family life cycle?|
|Nationality||Is nationality relevant to my product or service?|
|Ethnicity||Is ethnicity relevant to my product or service?|
|Marital Status||Are my customers married? Single? Divorced?|
|Family Size||Does my product or service cater to large or small families? Is family size relevant?|
|Occupation or Industry||Does my product or service appeal to people in a certain occupation, or industry?|
|Religion||Is religion relevant to my product or service?|
|Language||Is language relevant to my product or service?|
|Education||What level of education do my primary customers have? High school? University?|
Answer the following questions on your target market’s psychographics. Psychographics are the qualitative characteristics of your target audience, like personality, values, attitudes, interests, or lifestyle. These characteristics can give you a lot of insight into how to best interact and communicate with your target market.
|Lifestyle||What kind of lifestyle group does your audience fall into? Are they conservative or trendy, travellers or “soccer moms”? Are they thrifty or extravagant?|
|Values + Beliefs||What are their values and beliefs? Would you consider them environmentalists or safety conscious?|
|Attitude||What kind of attitude do they have? Are they positive or negative? Open or critical? Easily led or opinionated?|
|Motivation||Are your customers opinion leaders or followers? Do they tell others what products they need, or do they need others to tell them what is trendy and what works?|
|Activities + Interests||What do they do in their spare time? What are their hobbies and interests?|
|Social Class||What social class does your audience belong to? Lower, middle or upper? How much extra money do they have to spend on luxury items?|
What does this information tell you about your ideal customers?
You’ve done enough research now to create a picture of who you think your ideal customer is. Being as specific as you can, write a 1-2 sentence statement about your target market.
- My target customer is a successful young professional; a middle-class man aged 20 to 35, who is single, makes more than $50,000 per year, and is physically fit. He is university educated, and has an active interest in economics and politics.
- My target market is affluent new mothers; married women with children under five years old, between the ages of 25 and 45, and have a household income of at least $100,000 annually. She is the trend and opinion follower, and her purchase motivations are driven by her peer group.
In summary, now you can focus all your marketing with great clarity on your ideal customers or clients.