Small businesses can effectively compete with large companies by targeting a niche market. So, the focus should be on focus…
Defining the target market for your product or service will probably be one of the most difficult and frustrating processes you will do, if you do it properly.
Did we mention it is all about focus?
What is a ‘Target Market’ ?
A target market is itself a central focus of your overall marketing plan that will determine other factors such as price, distribution and your promotional and communications efforts. It is central to your product offering. Different target markets may require tweaks to your product offering, for example, varying the amount of sugar in a range of soft drinks to target consumers with different tastes or health concerns.
Why go to all the trouble to define a ‘Target Market’?
Targeting a specific market does not mean that you are excluding people who do not fit your criteria. Rather, target marketing allows you to focus your precious marketing budget and brand message on a specific market that is more likely to buy from you than other markets. This is a much more affordable, efficient, and effective way to reach potential clients and generate business.
Reduce wastage in your marketing communications by establishing a tightly defined target market, but not so tight to make it too small to be worthwhile!
We therefore need to find a targeted set of customers as a key part of the overall marketing plan. The target market can be separated from the whole market by geography, buying power, demographics, and psychographics.
You can geographically segment a market by area, such as cities, counties, regions, countries, and international regions. You can also break a market down into rural, suburban and urban areas.
Consumer buying power refers to the capacity of an individual customer or a specific market to buy certain quantities of goods and services. In general, high consumer buying power means customers have high incomes and purchasing power relative to the supply and prices of goods available. Low consumer buying power means consumers generally don't have enough money to purchase goods at current market prices.
A statistical view of a population, generally including age, gender, income, schooling, and occupation.
Psychographics are kind of like demographics. Psychographic information might be your buyer's habits, hobbies, spending habits and values. Demographics explain “who” your buyer is, while psychographics explain “why” they buy. Demographic information includes the dry facts. Psychographics are the more personal characteristics of a person.
To make sense of all this information and to make it easy for all team members to understand who is your target market, it is advisable to create your company’s marketing persona/s.
Personas are fictional, generalised characters that encompass the various needs, goals, and observed behaviour patterns among your real and potential customers. They help you understand your customers better.
To create marketing personas for your company, put yourself in the shoes of your typical customer and determine your persona’s role, goals, challenges, company, and any other questions that you can think of that would be important to your typical customer.
Of course, the best information will come directly from your existing customer base, if you have one available. You could establish this information by simply asking customers via your website to complete a quick online survey. There are free tools available on the web for small business. All you need is the database to contact.
Creating a picture of your typical customer persona/s will assist greatly in cementing the target market for your team.
You may be asking, "How do I find all this information?" Try searching online for research others have done on your target market. Search for magazine articles and blogs that talk about or to your target market. Search for blogs and forums where people in your target market communicate their opinions. Look for survey results, or consider conducting a survey of your own.
Asking your current customers for feedback is the best research you can conduct as these are people who already buy from you. Never underestimate the value in talking to your customers.
Defining your target market is the hard part. Once you know who you are targeting, it is much easier to figure out which media you can use to reach them and what marketing messages will resonate with them.