Last month we discovered the importance of identifying your strength by defining a Unique Selling Proposition for your business. Combine that with a definition of your ideal customer to bring laser-sharp focus to your business and marketing efforts.
What is meant by Target Market?
A target market is a group of people who have a need for your product or service. They are the type of people with whom you want to do business. The group is defined by one or more common characteristics that they all share, such as age, gender, geography, hobbies, vocation, beliefs, personal preferences, and much more.
For example, a fast food restaurant might define a target market like this:
- Anyone who drives within 5 miles of our location.
A family restaurant might have a more limited target market like this:
- Parents…
- with children between ages 5-12…
- living within a 15-minute drive of our location…
- with an annual household income of $60,000+…
- who care about the nutrition of the food they eat.
An urgent care center may create this definition:
- Any sick or injured person…
- within a 15-mile radius of our location…
- who does not want to wait on an appointment.
What a Target Market is not!
- A target market is not defined by general statements with fuzzy boundaries. Definitions of target markets are specific and measurable.
- A target market is not an imaginary market that might only exist in someone’s head. You need to have facts and/or research to substantiate its existence.
Why is it important to identify your target markets?
Product Development: When you have identified a target market, you will be able to develop products and services to better meet customers’ specific needs. Filling a need is one of the most powerful factors in your business’s success.
Marketing Channels: By identifying a target market, you will be able to choose marketing channels which will most efficiently reach future customers. Review the sample target-market descriptions above. Then decide which business should choose to run online search ads targeted to searchers in a 15-mile radius. Which business might post billboards near the main thoroughfares within a five-mile radius? Who might try a direct-mail campaign to neighborhood households with an annual income greater than $60,000?
Marketing Messages: There is another important reason to identify your target market. You will be able to customize marketing messages which appeal specifically to your target market’s needs and self-image. Which business could use the headline, “Next Exit, Turn Left”? How about, “Sick Today? Walk in Now!”? Or, “Eat Something Good without Feeling Bad”?
How can you determine your target market?
Begin by thinking about someone who is
- a regular customer,
- a fan of your company,
- and an easy customer to satisfy.
Why is this customer relationship a strong one? What characteristics about this customer make him a good customer? Do you have a number of other customers with similar characteristics? If so, you have identified a group of people who represent a target market. What are the characteristics that this group of customers has in common? Make a list of these similarities. You have just identified a target market you serve.
Many companies serve more than one target market. In the family restaurant example above, they might define a second target market like this:
- People living within a 15-minute drive of our location…
- ages 55+…
- with an annual household income of $45,000+…
- who care about the nutrition of the food they eat.
Couldn’t they have written a target-market description including both of these groups in the same description? Yes, they could have, but that would have been a bad strategy for three reasons. First, the combined description would have included a lot of other people who are not included in the two separate descriptions. Secondly, by isolating customers into separate groups, they are able to clearly see the differences between the two target markets. And thirdly, the more precise descriptions allow more precise targeting of marketing channels, messages, and designs; more relevant marketing = a better return on their investment.
Once you have defined your competitive advantage and your target market, communicate your new-found focus to each of your employees. Implement changes in company policy and culture to align with your goals. And, of course, evaluate all your marketing strategies from this perspective. Are you truly targeting your ideal market through your marketing efforts?