How To Identify Your Target Market?
Who is the ideal customer for your business or brand? What type of people are likely to see value in your products? What interests or priorities do you target? These are the questions that every entrepreneur must answer when trying to sell a product. So how do you find your target market?
A target market is the customer base at which your products and services are aimed. Usually, it's the industry that you’re trying to target. For example, Appily App Builder's target market are businesses that want to create apps with minimum effort.
The target market of a business is usually who the product or service is designed for. Once your business sets its eyes on targeting an industry, your market starts expanding towards each business in that industry.
A target market can also be filtered by company size. For products and services that are common among industries, you can target organisations based on their size.
The success of your business depends on how well you target the specific market. To understand how you can identify and target your market successfully, here’s what you need to do.
Identifying Your Target Market
Identifying a specific target market is not the hardest thing to do. You have an ideal customer in mind while creating or designing a product around their needs. However, to accurately assess and get a more detailed spectrum about your target market, you can follow the steps described below:
Analyze Your Product or Service:
The first step is looking at your product or service. Ask yourself a few questions to understand who might get value from your product. Here are a few basic questions to begin with:
What need does it fill?
What problems does it solve?
Who would benefit from it most?
These can be followed by more detailed questions like:
Can this product be used by someone else?
How can I diversify this product in the future?
What features are stopping it from being used by others?
These questions will give you the base idea of what your product is and what it can evolve into. This addition is only possible if you and your sales team answer these questions.
One issue with product analysis is that it provides self reflection. Product analysis is incomplete if done within the organisation which is why it is required to take a detailed look at the next steps.
Study Your Competition
Study and analyze your competition thoroughly. Your competition will help you identify and discover which markets to target. You should be careful if you’re a new business, as it's likely your more established competitors also sell in markets that may be inaccessible to you.
There are other benefits that present themselves too when studying your competition. You can find out their pricing strategies and undercut them to promote your business.
Remember not to follow your competition blindly, but rather try and outperform.
Segment Your Audience by criteria
There are many variables your audience can choose from. Your audience can be divided in different sections according to their demographic, geographic or behavioural patterns.
Here are some common ways to segment a market:
Research and Analysis
Once you have narrowed down your market using the steps above, it’s time to expand your research. Which marketing strategies to use? Is your target market large enough for sustainable business?
Now is the time to begin thoroughly researching the market you’ve chosen.
Examples of Target Markets
Below is a list of some international companies and observations on how they targeted their markets and clients:
Apple targets a wide variety of audiences around the world. It can serve such a broad target market due to continuous innovation in product design. Apple may not be the most innovative in their hardware anymore, but they are still the leaders in product design and they continuously introduce an exclusive factor in their products.
Businesses prefer Apple simply because their products are more convenient and they also save time. Apple's products have a wide array of offerings to support them. They have managed to create a tech company in both the software and hardware sectors.
Nike's products are tailored for athletes and people who exercise regularly. They usually focus to these audience demographics, but when observed from another angle their target market is more well defined. They have two major segments they focus on:
The major demographic for Nike is youth between the ages of 12 to 20 years of age. This demographic is seen as more physically active. They are more likely to participate in sport activities and exercises, which form a massive market for Nike. Nike engages with this specific market through advertising, associating with sports leagues, associations and landing endorsements with sports celebrities.
Nike was started by track athletes and runners. They originally used to resell running shoes bought from a Japanese company. Even today, shoes are their most major products and nearly 60% to 70% of their shoes are meant for running. They target people who are habitual runners.
Starbucks is the prime hangout place of the current generation. From college students to business professionals, Starbucks is the one of the most successful coffee shops around. The demographic audience for Starbucks is very well defined.
25 to 40 year age group
Starbucks's shops are specifically designed to appeal to this target demographic.
Another target market for Starbucks are tech-savvy people. It is a common sight to see people working at Starbucks whilst enjoying their favourite coffees. To cater to these specific people, Starbucks provides various online services.
Starbucks tends to have outlets in urban working areas around the globe. You most likely won’t find a Starbucks in a small farming community for example, that's because Starbucks's target market are people in highly populated cities.
The above article should give you a better insight on how to identify your target market and audiance. The most important point to remember is to try and identify the target market for your business before starting a business. That is why it's key to write a good business plan.