Defining Target Markets to Improve Your Business
No matter what business you run, defining target markets is essential for its growth and improvement. A target market is a group of consumers to which a brand directs their products and services. Defining target markets has several benefits for businesses like establishing better relationships with customers and avoiding inefficiencies.
So what are some of the ways to effectively find and reach your target market? Identifying the competitor, thinking of what the business can offer, segmenting the market, and doing further research can all help determine a brand’s target market and how to effectively reach them.
Benefits of Defining Target Markets
Including target marketing in a brand’s marketing strategy can draw the line between its success and failure. There are many benefits of defining your target market, including the following:
1. Generates More Potential For the Business
When a target market is defined properly, a business can determine the people who are most likely to purchase their product which helps generate more potential for the brand. There are plenty of new markets emerging at every level of economy, so that means there are more opportunities for brands to explore the potential of those new markets.
Targeting ads and products to the right people will more likely generate more sales and help jumpstart your brand, especially if you’re new to a certain industry. To put simply, more sales equals more revenue and greater success.
2. Helps Reach the Right Audience
Since target markets are specific to a business, defining the target market guarantees that the brand is reaching the right audience. For example, a marketing strategist would want to know the people who have the power to purchase their products and services to create ads for them.
Identifying target markets also helps create customized strategies for under-served markets. Instead of making ads that are targeted to bigger audiences, it’s better to tap the potential of customers in smaller segments yet more likely to purchase your products and services.
Social media also allows businesses to advertise on different online platforms and reach more niche audiences. Facebook, Twitter, and Instagram all have a variety of users who are looking for specific products according to their interests. A great example of using social media to define your target market is LinkedIn. It’s a website dominated with professionals, so it’s more sensible to advertise products based on the profession people provide on their profile.
3. Establishes Better Relationships With Customers
Another benefit of defining a business’ target market is that it establishes better relationships with customers. Here are some ways target marketing can build a better relationship with an audience:
- Helps You Understand Your Customers: Doing more research on a specific target market lets marketing strategists understand a customer’s behavior towards certain ads and products. This also lets them determine which ads work, and which don’t. Business owners are also able to identify what customers usually tend to purchase products and when they usually buy the products.
- Engages Your Customers: Creating ads based on a target market compels customers to be more curious about the products and services you have to offer, engaging and bringing in more customers. Target marketing also allows business owners to produce more specific messages for their audiences.
- Creates Brand Loyalty: Figuring out the wants and needs of a specific target market helps brands sell products that their customers definitely like, making them purchase certain products again. Creating brand loyalty is important for businesses because it ensures that there are customers willing to purchase new products and services they plan to create in the future.
3. Avoid Inefficiencies
Target marketing allows marketing strategists to create more cost-effective strategies to promote a business. If a business doesn’t determine their target market, then chances are they are rolling out ads to people who aren’t interested which can be a terrible mistake that’s wasting time, money, and effort.
For example, if the target market is people who are interested in cars and automobiles, then it’s better to place advertisements on websites and magazines that are catered to car enthusiasts. It would be useless to place ads in fashion websites and magazines since they probably aren’t even interested in purchasing the product.
How to Find and Reach Target Markets
Knowing the basic methods of finding and reaching target markets helps businesses reap more of its benefits. Here are some methods to help find and reach the intended target market for business:
1. Identify the Competitor
When finding the target market, it is always important to identify other businesses in the industry that are considered as competitors. If the competitor has already penetrated a specific audience, those people are probably already loyal to the competitor. It would be difficult to convince those customers to buy your products, so it’s better to find another market that the competitors have not reached.
2.Think of What Your Business Can Offer
After identifying the competitor, think of the edge that your business could offer to potential customers. List out the things that are specific and special to your business and target ads and products to people who are most likely in need of it. This provides businesses with a starting point of who they want to sell their products and services.
To determine what your business can offer, here are some questions to ask:
- Does my product or service have any special features?
- What pains do my product or service address?
- What value does my product or service bring to the industry?
Though exploring niche markets can be scary for some business owners, do not be afraid to embrace them because it can help generate more sales and income. It’s a different approach to the usual marketing strategies, but the increasing diversity in the United States allows companies to stray away from only marketing to a more general population.
3. Segment Your Market
Segmenting your market is one of the most simple yet helpful ways to define target markets. Though their different ways on how to group the market, the following categories can help navigate and understand possible customers:
- Demographic: Demographics is the most basic information about a target market, but it’s essentially the most important. Age, gender, income, marital status, ethnic background, and educational attainment are some of the categories that are included in demographics.
- Geographic: Geographics refer to where customers are located so if a business offers products and services to a specific area, then only target ads and services to people in that location. Some categories included in geographics include cities, towns, states, postal or ZIP codes, or countries.
- Psychographic: Psychographics pertain to the inward attitude and behaviors of customers, including their values, beliefs, lifestyles, and opinions. You can also group the psychographics of potential customers according to their socioeconomic class.
- Behavior: This category looks into the shopping behaviors of a customer. For example, if a marketing strategist wants to determine how frequently a customer goes shopping, then they can look into whether a customer shop regularly (monthly, weekly) or if they only shop during certain seasons or holidays (Christmas, Thanksgiving).
The table below further illustrates how two different businesses can use these four categories to reach their target market more effectively. Example A is a business that sells expensive alcoholic drinks and Example B is a business that offers landscaping or gardening services.
|Segment||Example A (Alcoholic Drinks)||Example B (Landscaping/Gardening)|
|Demographic||– Since underage people cannot purchase alcohol, target the products to people who are 21 years old and above.||– Older people and people with bigger families are more likely to own houses.|
|Geographic||– It’s better to advertise expensive alcoholic drinks in neighborhoods where people generally have a higher income.||– It’s best to avoid placing ads in highly urbanized areas where people usually live in high-rise buildings.|
|Psychographic||– People who have more disposable income are more likely to buy expensive alcoholic drinks.||– People who live in houses with bigger gardens or yards and money to spare for fancier landscaping.|
|Behavior||– You may want to look into people who regularly buy alcoholic drinks when they go to the grocery store.||– Some people may prefer landscaping services during the holidays since this is a time when they welcome more guests into their homes.|
4. Do Research on Your Market
The best way to determine target markets is to do market research. Here are some of the different research methods that can help businesses learn more about possible customers:
- Focus Group Discussions: Before rolling out a product to the public, focus group discussions are usually held to ask potential customers qualitative information about their products or services. This research method can ask about what they like and dislike about a certain product. It can also ask about people’s interests, like which product they prefer over others.
- Surveys: Like focus group discussions surveys also ask about customers reactions, but leans towards a more quantitative approach. An example of this is asking customers to rate on a scale how satisfied or dissatisfied they are with a certain product or service.
- Sales Tracking: Sales tracking also helps determine target markets because it looks into who buys and purchases certain products and services. For example, after selling a certain product, a business may want to look into the demographics of the customer to determine their target market.
- Using Technology: Technology provides business owners with various tools to help decode and study their target markets like social media analytics, website analytics, and certain statistical softwares.
CRM Solutions at Commence
One of the best ways to help businesses reach their target marketing is through the use of technology. Commence CRM provides customized CRM solutions to effectively reach different target markets. We provide businesses with the technology that it needs to grow and improve.
Commence CRM helps evaluate customers’ data and compile the data into reports that you can easily access. Our team promises to help you determine the software that will best generate more sales and revenue, and we guarantee excellent service that yields the best benefits. Give us a call to know more about us and other products and services.