Target Market: Importance, Analyzing Market, and More
If you are starting a new website or a brand, then one of the important things you need to know is your Target Market?
Your sales team will need to know their customers and ask themselves: “Who is the ideal fit for our offerings?”. But how do you exactly find the target market and what it is?
Let’s learn more about it in detail.
Target Market and Importance
A Target Market is a group of customers for which you aim to sell your products or services. Most often you define it by industry and represent a specific subset of the broader market that an industry covers. Moreover, it depends on factors like behavioral tendencies, geographic locations, and demographic characteristics.
Let’s learn more about them.
Let’s consider that you are creating a B2B software product that helps remote construction teams.
In such a case, you will focus on companies within the construction industry.
However, defining your target market will not stop you there.
You do know your industry, however, there is no one size fits all model for the businesses within, i.e. niche.
Moreover, if you are pinning down a target market for your product, you will have to begin with business characteristics, and scale would be good enough.
It is important to note that your product will suit certain companies better than others.
Selling to a Fortune 100 company is not the same as a small construction company with less than 100 employees, Right?
Therefore, in such a case, you will need to pin down the size of the ideal business you want to target.
With that, you can start off-target market analysis.
But first, let’s discuss what is the importance of the target market.
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Importance of Target Market
Finding the right target market for your brand or website is important as it is part of a holistic marketing strategy.
It not only affects advertising but also customer experience, branding, and business operations.
Moreover, when you focus on target market segmentation, you can do the following:
Speak directly to the Defined Audience With this, your marketing message resonates with your audiences and can relate directly to the information.
Moreover, you can have large, varied campaigns, like different brands to speak directly with your audience.
As every viewer is different, few slogans or strategies can resonate with them on a personal level.
Thus, you can remove or alleviate this problem and focus on crafting messages for one specific audience.
Attract and Convert high-quality Leads When you speak directly to your audience, you are more likely to attract the right people.
Moreover, your marketing will effectively reach the people you intend to do business with and when you connect with the right people, you can get high-quality leads that will turn into paying customers.
Differentiate you from your Competitors If your customers are clearly able to identify your brand and your unique selling propositions, they will choose you.
Build deeper Customer Loyalty The ability to stand out from your competitors creates long-lasting relations with your customers.
Moreover, if your customers can identify your brand and feel like you are an advocate for their specific perspective needs, they will be more loyal to your brand.
Thus, they will continue to do business with you for a long period of time.
Improve Products and Services Knowing your customers more deeply can help to make sure you improve your products and services in a new way.
Additionally, you can put yourself in their shoes and see how you can improve your offerings.
Stay Focused Finally, with the target market, you can get more specific information about your marketing strategies, initiatives, and directions.
Furthermore, it will help you to clarify your vision and get everyone on the same page.
Analyzing Target Market
In this section, we will discuss ways through which you can analyze your target market.
In order to pin down the size of your ideal business, you first need to start with this analysis.
Let’s take a closer look at what the process looks like,
Target market analysis is the basis for identifying your target market.
The following are the steps you can take to do your own analysis.
1# Analyze your Product or Service
The first step to determine your target market is to analyze your product or service.
Take a look at what you are selling and you will understand which consumers will get value out of your product.
Moreover, the questions below can help to brainstorm the process:
- What needs is your product or service filling?
- Are there any problems or pain points that it can help solve?
After answering these questions, you might want to consider getting feedback from your existing customers.
Additionally, you can conduct a focus group or ask your service department what the common problems are.
Therefore, analyzing your product or service in such a way can better help you understand your target market.
In fact, you might learn that your current customers are not the people you are targeting.
If you notice a disconnect in this process, you may want to better align your target market with your actual marketing goals so that you can realign.
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2# Check out your Competition
One of the important factors to consider is to perform an analysis to see who your competition is targeting.
Moreover, you can consider their customer base, and see if you can find an area of the market you can focus on.
This can help find a particular segment or niche they are not specifically targeting, and thus, you can benefit from it.
One of the best ways to do this is to perform a Competitive Analysis.
For this, you will do research to figure out who your competitor is and see what they offer and even review their sales tactics.
Moreover, it will even help you to identify target market gaps that you can fill.
Are there any target markets that they are not focusing on?
Thie answer to this question will help you to expand into new markets geographically or even develop new products to target a different market.
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3# Choosing criteria to Segment by
You can segment a target market with the help of certain variables.
Moreover, consumers can be split by demographic, geographic, and behavioral factors.
This is an important process of creating a buyer persona.
You will divide your target market into a number of target customers or buyer personas in this process.
For instance, you want to target mid-sized companies that are looking to purchase marketing automation software.
With this in mind, you can divide your target customers into a number of groups like marketing department leaders, sales leaders, founders, or CEOs.
The following are some of the most common ways to segment a target market:
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4# Perform Research
As you begin to narrow down your target market, it is time to take your research further.
What marketing strategies you can use to reach your potential market?
Is the target market large enough for your product or service?
Thus, market research will help you to learn more about your target market.
Moreover, picking the right target market can help you to find a great deal about your own business.
As you looking to become a true velocity business or do you see yourself as a steadier flow of pipeline with enterprises and consumers.
Answer to these questions will help you a great deal.
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5# Track and Evaluate your Results
Another important thing to note is that target market analysis is never static.
You will not just conduct one, but a number of other analyses as well.
Make sure to be immediate with the results and stop there.
Moreover, it is an ongoing process and you will need to continuously track your results, evaluate what you see.
And iterate on your conception of the target market to more effectively appeal to it.
Let’s discuss them in the next section.
Examples and Segmentation
After understanding the market analysis steps, let’s consider the following popular examples.
These are some of these best-in-class companies, both B2B and B2C, and see how they set up their target markets. In this section, we will also discuss target customers and the process of target market segmentation.
Keep on reading.
Atlassian Target Market
Atlassian offers a suite of collaboration tools that helps developers and product leaders to take their project concepts to completion.
When you visit their “Customers” page you will understand how it operates in a number of industries.
Like many large companies, Atlassian uses target market segmentation to look at different markets.
Moreover, they break up its unique value proposition, terminology, and values.
By dividing into one segment, like retail, you can see that they are working with a number of huge companies.
This is particularly in the case of support-related products.
Thus, it tells that while they can work with almost anyone doing software development, it recognizes how its value proposition changes.
Furthermore, it also depends on the market segment in question.
Even the same product for two different types of customers creates different levels of value.
Nike Target Market
You all know that Nike offers products to athletes and other consumers who exercise regularly.
Moreover, they offer apparel, equipment, shoes, and accessories.
They work closely together with athletes and fitness-minded people, however, you know that a good target market definition cannot be that broad.
The following are two of their segments:
Young Athletes Kids who perform frequent exercise and play sports growing up are a huge and growing category to Nike.
Furthermore, Nike engages with this market through sports leagues and associations and also with endorsements with popular sports stars like LeBron James.
Runners While a new focus is on new types of shoes, Nike is targeting customers with both demographic information and lifestyle.
They also launch shoes and apparel designed to help the avid runner stay on the road a bit longer.
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Starbucks Target Market
Next time you sip onto your favorite coffee, think about their target market of the top coffee destination: Starbucks.
You might have seen a lot of remodeling of their locations and they offer a hip and contemporary look.
Surprisingly, about half of their customers are between the age range of 25 and 40.
Moreover, if you spend more than five minutes sitting and drinking your coffee, you will probably hear about the barista’s shout-out “mobile order”.
This mobile process now accounts for 24% of Starbucks transactions which also shows they are catering to a tech-savvy crowd.
The next thing to consider is the location of their shops.
By positioning their locations in heavily urban areas. they are attracting on-the-go professionals.
Their target market is:
- 20 to 40-year-olds: remodeling locations to accommodate their largest demographic base
- Tech-savvy adults: the mobile app is getting on and also lends itself to a forward-thing segment
- working professionals: urban focus tells the type of lifestyle they are catering to
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Apple Target Market
If you are looking for an example that caters to both B2B and B2C markets, then think about Apple.
Apple is the perfect example of innovation and product design.
But how do they really find a target market?
With a wide range of product offers, Apple has a little something for everyone.
The following are their two target markets:
Technology Enthusiasts, They introduced their products with a customer category, and this segment still gets attention from Apple.
Apple is still showing value for this segment by creating tech categories like wearables, Apple TVs, and HomePods.
There is also a huge ecosystem play where owning a suite of Apple products enables better interoperability among your tech.
Healthcare Another segment Apple is targeting is healthcare.
By focusing on the appeal of having information right at your fingertips with your mobile and the iPad, they are positioning workers to communicate with patients.
Furthermore, Apple does not exclude many people from its target market and is positioning itself to benefit both customers and businesses.
Its success is more about understanding the value of its different segments, rather than excluding people from them.
McDonald’s Target Market
McDonald’s target market is both broad and encompasses a huge variety of customer personas.
Moreover, young professionals represent one of the more prominent chains of the target market segments, and that trend also reflects in the location remodels.
There is a lot of revamping to a number of Mcdonald’s franchises and looks sleeker, more modern, and better for millennials.
“Full nest” families with children over six represent another key base of the chain.
The strides of the franchise take to appeal to this particular segment in the Happy Meal options they offer.
However, there is one more factor that underscores virtually every target market they try to appeal to.
Its Social Class.
They make a conscious effort to resonate with lower, working, and middle-class patrons.
It is important to note that pricing is the basis of McDonald’s value proposition.
Furthermore, it tries to bill itself as an affordable alternative to more expensive options in the spaces it attempts to sell in.
For example, while promoting its McCafe Line, the chain stressed that the brand has particularly low price points as a major selling point.
The target market of the franchise is not singular and clear-cut in terms of demographics, however, it is specific in terms of various persona’s economic circumstances.
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A target customer is an individual who is most likely to make a purchase.
Moreover, it is a subset of the broader target markets.
For instance, if your target market is to provide knowledge and support to people suffering from Autism, then your target customers will be individuals suffering from it, as well as their families.
Furthermore, you need to have a firm grip over your target customers if you intend to develop a pointed and effective value proposition.
The success and visibility of your sales messaging, prospecting efforts, and broader sales process depend on your knowledge of who is making a purchase and the mindset that makes them do it.
This brings us to market segmentation.
Target Market Segmentation
This is the process of positioning your target audience into more focused, identifiable, and approachable groups or segments.
It is a broad concept that can take a number of forms.
Geographic Segmentation This helps to divide your target market on geographical boundaries.
Firmographic Segmentation A practice specific to B2B sales where you divide the firms depending on characteristics like company size or the number of employees.
Behavioral Segmentation Divides your target market into behavioral tendencies and decision-making patterns.
Demographic Segmentation This one divides your target markets into factors like income, education, race, gender, or occupation.
Psychographic Segmentation Elements like personality traits, values, and opinions help to divide the target market.
How you choose to segment your target market depends on your needs and interests.
In most cases, you will use more than one of the above methods to define your target segment.
While identifying the customers you need to cater to and the ones you don’t, ask:
- Do my target customers have different problems that will solve with my product?
- Do my target customers get different values from my product or service?
- Is either of these things related to demographic, geographic, or lifestyle components?
In order to effectively create segments, you should have a decent way of measuring the value you are providing to the market.
Then identify if certain groups are getting more value than others.
This will help power the positioning of your product and you can have the ability to pinpoint your customers while speaking their language.
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Leveraging Target markets
Segmentation poses a number of benefits for sales teams and if you know who is going to be most receptive to your product or service, you can conduct more steps of your sales process.
Effective segmentation can be a major asset when it comes to prospecting and if our SDRs have a clear image of what type of customers tend to be interested in your offerings, cold leads can become a little warmer.
Moreover, you will need to have criteria that can help differentiate a prospect who needs your product or service from one that lacks decision-making tendencies, location, or economic circumstances.
Finally, target markets provide your sales team with the necessary information to find new markets and sell them effectively. If you are on the top, then you can have hit a wall on your sales potential and lose out on incredibly lucrative opportunities.
Therefore, knowing your target markets inside and out is one of the most fundamental tenets of successful sales efforts and if you are not analyzing, pursuing, and refining your understanding, you will lose out on sales and will paint yourself into a corner with your business potential.