Although your business might offer services or products that are popular, not everyone will need them. It is your responsibility as a business owner to identify the people who are not only interested in your products or services but are also willing and able to buy them.
What is a Target Market?
A target audience refers to a group of potential buyers that a business has identified as the most likely buyers of its products or services.
Understanding Your Target Market
Many new owners of small businesses and home-based businesses don’t spend the time to identify their target market. This leads to them wasting time and money when they are looking for customers and clients. Home-based business owners often think their target market is “everyone,” when in reality they are looking for buyers with specific characteristics and situations.
Your target market will allow you to position your marketing messages in the right places. Use words and enticements that are specific to their needs. You could, for example, run an ad on your local newspaper that targets a million people if you are a virtual assistant who works with Realtors. Although there is the possibility that the ad will be seen by a million people, most people won’t actually need it. Even if they do, they aren’t likely to think about hiring a VA. Your audience might be smaller if your ad was placed in the local Realtor Association newsletter. However, they are all in your area and open to learning about real estate news and resources.
Segment a Market
Segmenting your market means breaking down the market into smaller segments. 2 If your target market is moms who are trying to lose weight, segments might include stay-at-home moms, working moms, and moms living in big cities.
Four common segmentation types include:
- Geographic segmentation is determined by location (state, city, or street addresses).
- Demographic segmentation is based on characteristics such as gender, race and age.
- Segmentation by behavioral factors focuses on customers’ benefits and how they use products or services.
- Segmentation psychographic that examines personality, values and attitudes. 3
The following questions will help you to segment potential customers into a market:
- What age is your ideal customer?
- What amount of money are they making?
- Are you able to offer a product or service that is most appropriate for women, men, or children?
- Are they their homeowners?
- Where is your target market located?
- Where are they located?
- What kind of education did they receive?
- What are the problems, needs, or wants that your product/service will solve?
Marketing tailored to your needs
Your marketing efforts will be more successful if you have a better understanding of your ideal customer. So you can find your ideal customer and get your business information to them, you’ll be able to pinpoint their location. Your message will be less concentrated if you cast too broad a net.
You will be able to communicate with customers using copywriting. You will be able to speak directly to customers and offer a solution.
You may have multiple markets. In fact, it is possible to target different segments of the market. 4 However, you must make sure you target each segment. Many people, such as new mothers, middle-aged moms, and women with medical issues, want to lose weight. Not all people want to lose weight for exactly the same reasons. Marketing to a mother about losing weight to prevent diabetes is not the same as marketing to her about her pre-pregnancy weight.
Target Market for Business Planning
It is crucial to have a clear target market when planning and researching your business. These are five areas where a target market is a key component of your business planning.
- Simple feasibility report: Before starting a business, ensure that it is a good idea by doing a feasibility analysis. It is important to be familiar with your target market’s buying habits before you can quickly assess your business idea. Your business will fail if you sell baby products to 30 year old college students. A target market is essential to determine if your business idea will work.
- Market research: You will save time and money by conducting primary and secondary market research.
- SWOT analysis – A SWOT analysis is a way to identify the strengths, weaknesses and opportunities facing your business. 6 This includes everything surrounding your target market. If you offer a product that is health-related to men between 55 and 70, then a threat to your target market could be a drop in income once they retire at 65.
- Business Plan: A business plan is a blueprint for your business vision that will help you achieve your goals. Although there are many aspects to the plan, they all focus on two areas: the product and your target market. A weak business plan will result if you don’t have a good understanding of your target market. This includes its buying habits, behavior, preferences, and purchasing patterns. You won’t be able to get funding, investors, or key employees if your business plan is weak.
- Marketing Your target market is the person to whom you send all marketing materials. It would be like sending a letter to your father and not getting it right. Your sister will be confused and the message won’t get across properly. Advertising and prospecting dollars will be wasted on messaging that isn’t appropriate for the right audience.
Consider the marketing messages that you are responding to on websites, on TV, or in your mailbox. What are the ones you read and what do you ignore? Which ones make you want to learn more or make a purchase? Chances are that the marketing messages you send will speak directly to your needs and interests. The same goes for your product or service.