In the current competitive economy, it’s more important than ever to define what the Target Market is. Simply put, no one can afford to build a product/service that pleases everyone.
So what is Target Market? Why the right Target Market can help small businesses balance competitive efficiency compared to large corporations? Let’s find out with the article now!
What is Target?
Target is object-oriented, that is, we will analyze and select the market and customer audience to determine the target market, target customers. From there, make appropriate plans and achieve efficiency in business.
Target helps you limit the bad play from your competitors, the best way to filter potential customers will help you reduce the cost of rampant advertising.
What is Target Market?
Target Market is the segment of the market that includes all groups of customers or organizations that are most likely to buy or use a company’s products and services.
It is the desire from potential customers that will be the driving force for businesses to promote marketing campaigns. This can entice, attract and satisfy the need to turn them into regular and loyal customers. Obviously, a strategy that focuses on marketing to potential customers is much more effective and cost-effective than a generic approach to everyone.
What is the importance of identifying Target Market?
Many of us often assume that a good, quality product will be liked by everyone. But what is the truth? No matter how good the product is, it is only useful to a certain group of people.
Instead of wasting time and money on a vague, generic customer base, we can devote our full potential to Target Market. Because:
1. Target Market is the best way to perfect the product
As a manufacturer, you always want to improve your products/services to better meet customer needs.
Once the Target Market is defined in detail, you can identify the specific needs and future of customers. From there, develop their products in that direction to satisfy the needs of customers, the product will constantly develop and improve.
2. Target Market makes it easier and more accurate to meet expectations
Target Market will help businesses bring a feasible result and meet the expectations of customers. This will bring great benefits to traders.
- First, limit the situation that customers have unrealistic expectations with the product.
- Second, the business also owns a group of loyal customers. This is also an important goal of businesses.
3. Target Market helps increase advertising efficiency
Knowing potential customers well and grouping them into a target market makes advertising much easier. Get information about Target Market, ie understand customer behavior.
- Understand what they want?
- What are your buying habits like?
- What do they care about?…
And more importantly, what is the main factor that drives them to make a purchase decision?
With those search and research results, you can completely create an advertising message that is appropriate and easy to leave an impression on the market. The importance of Target Market is immense. It will determine the success or failure of the business. So what is the Target Market definition?
6 Steps to determine Target Market for businesses
To build a solid foundation for your business, you must first identify your ideal customers and adjust your marketing strategy accordingly.
In today’s economy, clearly defining the Target Market is extremely important. No one can afford to target everyone. Small businesses can compete with large companies by targeting a niche market.
In fact, many businesses make the mistake of setting goals that are too general. For example: They target “anyone interested in the company’s services”. Others are aimed at small business owners, homeowners or housewives.
You need to understand that targeting a specific market doesn’t mean you’re excluding customers who don’t fit your standards.
Instead, it’s simply a matter of getting your brand message across and focusing marketing resources on those who really need it and are more likely to buy your product. This way both saves costs and helps the process of approaching customers and running the company more efficiently.
Here are 6 basic steps to help you define your Target Market:
Step 1: Review the list of existing customers
What components does the existing customer include? And why would they choose to buy your product?
Look for common traits and interests among those guests and see which is the most profitable for the business?
From there, you can easily define many other goals similar to them, which can also benefit from the product/service you provide.
Step 2: Check the competitor situation
Who is your opponent? What are their current customers? You should avoid going down the same path as your competitors, and instead look for a market they don’t expect.
Step 3: Analyze products/services
Make a feature list of each type of product or service you offer. Next to each feature, state the benefits it offers. Then, make a list of people whose benefits can meet their needs.
Step 4: Choose a specific demographic to target
Find out not only who has a need for your product or service, but also who is most likely to buy it.
Here is a list of demographic factors to keep in mind:
- Academic level
- Marital status, family
- Religious nation
Step 5: Consider the psychology of the target customer
Psychopathology is the more personal characteristics of a person, including:
- Life style
From there, determine how your products or services fit into your target customer’s lifestyle.
- How and when will they use the product?
- What features make the best impression on those guests?
- What communication channels do customers usually receive information from? Newspapers, online or certain events?
Step 6: Evaluate your decision
The question of choosing Target Market
Once you’ve decided on your target market, consider the following questions to add some certainty to your decision:
- Are there enough people matching my criteria?
- Does the target customer really need my product/service?
- How to get target customers to make purchasing decisions?
- Will the customer be able to pay for my product/service?
- Will my message get closer to the target audience?
Select multiple Target Markets at the same time
However, you do not need to analyze too deeply about Target Market. Because when choosing a target market, you can choose more than one niche market. It is important that you consider whether each market should have different messages.
If you can effectively reach both markets with the same message, you’re making that goal important.
If the target is only about 50 people who match your criteria, it is necessary to redefine the Target Market. The key is how to create a balance for both factors.
To better understand your Target Market, first look to the research articles on those subjects that others have already done. Then, browse the blogs and forums where the target customers often visit and interact with each other.
You can also rely on the results of a certain survey or conduct a survey of your own. Asking current customers for opinions is also considered a fun way.
The meaning of determining the choice of Target Market
Indeed, determining the target market (Target Market) is not easy. However, if the selection process is successful, you will easily know through which communication channels to reach your customers and what marketing messages should be conveyed to those customers.
Instead of sending the message directly to everyone in the ZIP code, you can now just send it to those who match the given criteria. Obviously, choosing a clear target market both saves costs and earns significant profits.
Next, to make it easier to understand Target Market, I will give you an example of the following McDonald’s Target Market selection…
McDonald’s Target Marketing
According to QSR 50 of QSR magazine in 2017, McDonald’s is the leading fast food chain in terms of sales in the US. This is also one of the most successful businesses in choosing Target Market!
Specifically, the products they sell are mainly aimed at customers who are children, teenagers and young families living in urban areas by:
- Create amusement parks right at the restaurant
- Offer more party services, Arch card (rechargeable cash card)
- Free Wifi
- Special promotions
- Smart advertising campaigns
Thanks to wise advertising strategies directed to target customers and reasonable prices, in 2015, McDonald’s held a 17% share of the fast food market in the United States.
However, by 2016, millennials made up the majority of the US workforce, outnumbering the baby boomers. At this time, sales of MacDonald’s began to show signs of decline because the menu they offered did not seem to appeal to millennials.
In response, McDonald’s has changed its marketing strategy to target millennials more effectively by adding healthy dishes to the menu as well as upgrading the quality of coffee and drinks.
Target Marketing and Market Segmentation
Target Marketing is segmenting the market into many segments, then implementing marketing campaigns on one or a few segments that are the target customer needs that best match your product/service criteria. .
It can be the key to attracting new partners, increasing sales and contributing to the success of the business.
The beauty of Target Marketing is that once you focus all your marketing resources on specific consumer groups, it becomes easier to promote, price, and distribute products/services, with less overhead. more efficient.
Today, social networking sites, such as Facebook, LinkedIn, Twitter, and Instagram, all include sophisticated features that allow businesses to easily reach users based on certain market segments.
You can approach market segmentation in a variety of ways, but three of the most common are demographic segmentation, geographic segmentation, and focus segmentation. psychological segmentation.
Demographic groups are based on the following factors:
- Marital status
- Academic level
Demographic segmentation is often the most important criterion for determining a Target Market. Any business needs knowledge of demographic information.
Geographic segmentation involves segmenting the market based on geographic location. Depending on the scope of your business, you can divide the area according to the following factors:
- Postal code or ZIP code
- Area code
- Province or state
- Country (if your business is international)
Geographic segmentation is based on the premise that consumers in a particular geographic area may have specific product or service needs. For example, a lawn care service often focuses its marketing strategies on a town or subdivision with a high percentage of elderly residents.
Psychographic segmentation segments the target market based on a consumer’s socioeconomic class or lifestyle.
The socioeconomic scale ranges from the affluent, highly educated class (at the top) to the uneducated and unskilled class (at the bottom). According to a survey from national readers based in the UK, social class is classified into six categories:
|Social class||Social status||Occupation|
|A||Upper class||administration or senior professionals|
|B||Middle class||Mid-level managers, administrators, or senior professionals|
|C1||Low middle class||Supervisor, clerical, junior manager, administrative, or senior professional|
|C2||Skilled Worker Class||Skilled Worker|
|D||Working class||Time and unskilled labor|
|E||Subsistence class||Unemployed, seasonal worker|
Classify lifestyles based on users’ values, beliefs, preferences and the like. Urban people will of course have a different lifestyle from people in the countryside or suburbs, pet lovers or people who care about environmental issues.
Psychographic segmentation is based on the premise that the choices people make in the purchase and sale of goods and services reflect their lifestyle preferences or socioeconomic class.
Other Segmentation Types
Cohort – Many businesses find it easier to identify a Target Market by looking at cohorts or groups of people with similar childhood experiences, such as being raised by a single mother or going to school in the same environment.
Ages – Target Markets can also be determined on the basis of age, at different life stages, such as: graduate school, retirement, newly married, recently broken up, or upbringing children.
Behavior – Another, simpler approach, is based on usage frequency or consumer behavior. This approach can be applied to retail stores or rental services.
In short, no matter what anyone says, choosing Target Market is always one of the most important steps for any business if it wants to succeed in business.
Especially, for small businesses, choosing the right Target Market can help businesses effectively balance competition with large businesses.
Hopefully through this article, you have understood correctly what the Target Market is or what the target market is, so that you can apply it correctly and effectively in your business.