Find Your Target Market

Graphic target market profile

We have seen it numerous times, businesses not realizing they are missing a huge opportunity because they are either targeting the wrong market entirely or so focused on one target market they don’t notice the large chunk of people coming from another.

It’s crucial that businesses find their prefect target market. Before diving in you must first understand that a target market does not encompass your entire selling market. A target market is those who really want or need your offering, the people most excited about your product, and most likely to buy over others. These are the people you want to direct your marketing campaign towards.

Here are some tips for finding your perfect target market:

  1. 1. Gather information about your company

    Figure out what problems your product/service solves. Be as specific as possible as this will help you narrow your audience down. Once you know the problem you’re solving, find the characteristics of those that have the problem.

    Next, identify what features and benefits your product/service offers. Features are something your product has or is, while benefits are the outcomes or results that users will (hopefully) experience by using your product or service.

    The overall question here is, what will the customer get out of using your specific product or service?

  2. 2. Analyze your current customers

    The best way to find your target market is by learning who is already buying your product/service. Learn their demographics, interests, behaviors, what benefits they get out of the product/service. You want to know how they think and act.

    Once you have a general idea of your current customer base, you’ll want to highlight the similarities between them to come up with your top customers.

    Website and social media analytics are great resources to gather this information. Analytic tools help to see who is visiting, buying, and exploring your website or social media. It also shows how long they spend exploring your website, where they’re located, what industry they work in, their interests, and more. Do not be afraid to also reach out to your existing customers to survey them too.

  3. 3. Analyze your competitors’ customers

    You can find out a lot about your potential customers by researching your competitors. This research will show if competitors have been successful at attracting specific types of customers and whether or not you should be trying to attract those customers too.

    You can learn basic information about your competitor’s customers by looking at their social media accounts and searching through their followers and likes on their posts. If your competitor has a physical store you can also check out who is shopping there.

  4. 4. Conduct market research

    Conduct secondary and primary research to gain more insight. Secondary research is any outside research done about your company or industry. Gather information from other resources that will help find your target market. Primary research is research done by you. Create a survey to gather information on your current customers and everyday people. Ask about their demographics, interests, perceptions of your product and your competition, what services or products they would like to see, etc. Ask any questions that would prove helpful in finding your key market.

  5. 5. Complete your customer profile

    Once you’ve gathered all the information you can, compile a complete profile of your perfect customer. If you offer more than one product or service, you might have multiple target markets. Your profile should include both demographic and psychographic information. From here, you can work on how best to market and advertise to your target market.

The most important and toughest thing to avoid in finding your target market is making assumptions. Let the information you gather tell you who your best and most popular customers are, do not draw your own conclusions.

You must also note that your target market is flexible and always evolving. Knowing who you are targeting and continually refining it will ensure you’re on the right track.

Increase profit opportunities with STP

Segmentation, targeting, and positioning (STP), the process that can help you identify and evaluate opportunities to increase sales and profits. Defining and understanding the vision or objectives of the company’s marketing strategy and the mission of the company are key factors before starting the STP process. Using a SWOT analysis, companies can find their mission. A SWOT analysis consists of the company’s strengths, weaknesses, opportunities, and threats. Once the company mission is defined, we can go through the STP process.

Steps 1-5 STP process

Let’s dig deeper into what this process means.

  1. Segmentation

    Segmentation breaks customers into groups or market segments. A market segment includes consumers who respond similarly to an organization’s marketing efforts. Each segment will have similar needs, wants, and characteristics. This makes it possible to gear your product or service specifically for them. Developing descriptions of the different segments helps an organization better understand the customers in each market segment. One organization’s product or service can have multiple segments.

    Companies can choose to break their customers down into segments through:

    • Geographic segmentation: organizes customers into groups on the basis of where they live
    • Demographic segmentation: groups consumers according to easily measured, objective characteristics such as age, gender, income, and education
    • Psychographic segmentation: how consumers describe themselves – how they spend their times and money, what activities they pursue, and their attitudes and opinions about the world in which they live
    • Benefit segmentation: groups consumers on the basis of the benefits they derive from products or services
    • Behavioral segmentation: divides customers into groups based on how they use the product or service
  2. Targeting

    This gets even more specific than your market segments. After a company has identified the various market segments for its product/service it then evaluates each segment’s attractiveness and decides which ones to pursue. This narrower focus is called a target market and it’s where the company will spend most of its marketing budget.

    Companies use the following target markets:

    • Undifferentiated targeting strategy, or mass marketing: when everyone might be considered a potential user of its product
    • Differentiated targeting strategy: target several market segments with a different offering for each
    • Concentrated targeting strategy: selecting a single, primary target market and focuses all its energies on providing a product to fit that market’s needs
    • Micromarketing or one-to-one marketing: tailoring a product or service to suit an individual customer’s want or needs
  3. Positioning

    A company must now decide how it wants to position itself within each market. This market positioning involves defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products. The positioning strategy helps communicate the firm’s or product’s value proposition, which communicates the customer benefits to be received from a product or service and thus provides reasons to purchase.

Here are some real-world examples of using STP to identify and evaluate opportunities for increasing sales and profits.

Hertz Coca-Cola example STP's

Information gathered from Grewal, Dhruv, and Michael Levy. Marketing. 5th ed., McGraw Hill Education, 2017.