Think of the ideal customer you would want for your business.
If you think this is a tough question or if you never thought about the ideal customers you want for your business, it is a clear sign that you need to conduct target market analysis. While many new small business owners don’t realize this, a thorough target market analysis is something that is going to make sure that you do not end up wasting large sums of money on untargeted market and a lot of time on people who might not actually be interested in buying the sort of products that you are offering. What is target market analysis, why is it important and how do you identify your target market?
When you begin selling a product or service, you need to know exactly what kind of people will be interested in buying it. This will be known as your target market, which can also be called the group of people that all your marketing campaigns will revolve around. So how do you define your target market? Here are a number of ways to do this.
This is where your target market analysis is through demographic or socioeconomic details. These will usually include segmentation according to income, age, gender, education, etc. Whether or not you go for demographic research depends entirely on the sort of product you are trying to market. Is it something that is aimed directly at females and females only? Is there a particular age group of females who would like to use it? Is there a particular income group of the age group of females who would be able to afford it? These step by step demographic questions will help you narrow your primary target market down, and then decide who to market your product to.
Are you unsure if you will be able to identify your target market through demographic details? If this is the case, you do not have to worry. Often, it is not possible to decide on your primary target market merely through such specific details. This is when your product is more versatile and does not necessarily have to be used by a small, specific group of people, but is aimed at people living in a specific area. In such a case, you can use geographic target market analysis to decide on your primary target market. Think of a small business offering cleaning services in a residential area in London. In such a case, people of all genders and ages will be likely to be interested in such a service. Your future marketing plan, therefore, will be centered on the location.
Psychographic segmentation, or psychographic target market analysis, is when your product is not aimed at a location or a socioeconomic group, but at people with similar lifestyles and values. In this target market analysis method, you reach your target market by looking at the attitudes, opinions and interests that your product is related to. For example, let us look at lifestyles. Will your primary target market be people with domestic and conventional lifestyles, or those who are free from restrictions? Consider values and opinions; do you want people who are consumers or alcohol and want a spoilt lifestyle, or those who are focused on healthy eating and staying fit? These specifications will help you with your psychographic target market analysis.
Remember this when you are wondering how to identify your target market: there is no single method. You can use a number of target market analysis methods to reach your primary target market. In fact, sometimes you might need a combination of more than one methods to make sure you include very characteristic of your primary target market in your marketing plan!