For small businesses, the target market is the utmost important point.
The vague idea is not recommended when you are doing business in today’s business environment.
Without knowing who is your target market, for whom you are offering products or services, and against whom you are having competition, no business can run successfully.
To find the target market, it’s crucial to understand what this term means, where you can find it, and how you can use it.
If you are a beginner, here is what you must be knowing about the target market before you start your business.
- What To Know About The Target Market?
- Why Having a Target Market Is Important?
- How To Identify Your Target Market?
- Factors That Can Affect Determining Target Market
- Best Examples Of Target Market To Know
- Common Mistakes To Avoid In Target Marketing
- Frequently Asked Questions ( FAQs) about the target market for small business
What To Know About The Target Market?
To understand the term ‘ target market’, it’s a group of people who you chose to make your business all about.
It means your products, services, and every action is going to serve them.
You can choose a large market or choose a niche, depending on the scale you want to run your business.
The target market narrows down the customers too. You are not selling your products and services to everybody, it would be certain people who fit the market you chose.
Why Having a Target Market Is Important?
For small companies, it’s crucial to have a target market for multiple reasons.
But the most important reason is it gives a clear focus on developing market strategies and making them effective.
When you get the target market, you can turn them into your buyers for better sales and growth of the brand.
Difference Between Target Market and Target Audience
Both terms are similar but have a difference when it comes to practical implications.
However, the Target market and target audience both denote the market segments where the business requires focus.
The target Market is a well-defined and specific segment within the business where the owners want to sell their products and put their marketing efforts toward the particular market.
The Target Audience whereas is a much more narrowed and specific term to define the segment of target customers where the products and services will be advertised.
Helps In Determining The Market
Having a target market, you have a focus on who is buying your services and products.
With this, you can know how to approach and meet their requirements.
Since the market is huge, not having your target market can make you look aimless and you don’t have a point to focus on.
It also leads to unjustified strategies and plans which fail to deliver the results you are looking for.
Help in Crafting The Message
Once you get your target market, you can easily craft your message. It saves time as it applies to everyone without letting you re-craft it.
Each market has its requirements and the messages are crafted to target and attract the audience.
When you know your market, you can easily know which kind of messages are helpful for getting more attention and also it helps in saving extra effort and risks.
Help In Reaching To Right Customers
The message needs to get tailored so it can meet the customers you are hoping to target.
Not all customers will buy from you and there is a difference between your visitors and end-users.
It gives a much easier idea about what you are selling and customers can identify if you are fulfilling their needs or not.
Help In Finding The Potential
It helps in focusing on what matters and whatnot.
As a small business, you don’t have enough time to focus on every single thing. The target market helps you in highlighting the points which are important for your business.
It also boosts the pontifical by helping to find out the potential researchers and sales funnel to reach the audience you want.
How To Identify Your Target Market?
So when you know about the market, it’s your turn to find one for your business too.
Identifying your target market is not difficult but it does need effort and research.
Here are a few steps that you can follow.
Step 1 – Start With What You Have
It can be tiring to find who can be your potential customer from fresh.
It’s better to start with what customer base you have right now. Even though you have a diverse range but still you can find some similar characteristics among your customers.
Start to identify what common interest and other things your regular customers shares. Use the information to get an idea about your customer base.
Pro Tip: When you start looking for a target market, always start with a broad option.
It will give you more space to look and you can narrow it down as you go further.
Step 2: Write Down The Basics Demographics
The market is wider than it looks, there are options under options, and it becomes difficult to pick one.
When you are starting with choosing your target market, you must know how detailed the demographics you have.
Well, the basic demographics you need to focus on are –
- Marital status
Also, the business should focus on 2 core markets which are data that shows your core market, and 1 – 3 secondary markets which fleshes the core market out.
Step 3 – Find The Reason Why Your Target Market Buy From you
Demographics tell who is buying, it helps you in understanding the group of people who fall in the category you are looking for.
On another hand, Pyschograohics tells you why the market will buy from you.
When you monitor your market, you also get information about what interests them the most. Including likes, dislikes, preferences, etc.
With the help of insightful data, you can find about –
Step 4- Analyze Your Brand, Product & Services
Write down the features that your product and services are offering.
Add benefits, for example – If you are offering certain kinds of apps, you will know whom it will benefit the most. You can use the information in finding your target market.
Think about whom it will help and who will like to buy from you. With this, you can easily cover the demographics and psychographics area.
Also, your brand has its personality and there will be some group of people who will like it, you have to find the base.
Step 5 – Evaluate What Your Research
Once you conclude who is going to be your target market, ist time to consider a few important questions too –
- Can you reach them via message? Is that easy to access them?
- Are there any other people or is that enough people fitting to criteria?
- Will your target people get benefits from your brand?
- Can they afford it?
- Do you know what drives your target market to take financial decisions?
Instead of breaking down your target market, focus on finding the balance.
The aim is to look for the market where you can offer the services. It can be more than two niches and you can explore as well.
Step 6 – Understand Benefits & Product Features
It’s also important for you to do the target audience analysis. It will help you in understanding the motivation behind your buyer’s buys from you.
It includes understanding targeting the audience and making the effort to reach your potential audience.
Image source: neocreative
The idea is to catch your audience when they are going through the buying process and make them purchase the product and services.
Showing them the profit of using your products, including the features and benefits that affect its daily lives, can be helpful to direct them to make the purchase as well.
Pro tip: Focus on writing effective, easy to understand product description and features.
Step 7 – Test Paid Ads
When you do the audience analyze you will also get an idea about the ideal customers of yours.
It’s the perfect time to use paid ads. You can use search engine optimization to get a high ROI and lots of data for future help.
Image source: referralcandy
With help of the Facebook ads manager, you can easily manage the ads on Instagram and Facebook.
You can also check the audience insight to compare and analyze the users.
Factors That Can Affect Determining Target Market
Determining your target market is helpful for your business. It guides you to know who is going to pay for your services and products. Along with where you can target your business.
However, the target market is not just for you but for the competitors as well.
Michael Poetre from Harvard Business School stated the five factors which help the business to target characteristics of the market.
He named it the “ Five Forces Model”.
You can use the factors to understand more about the target market and what can affect it as well.
The rivalry between the competitors can help in boosting the strategies and plans.
However, too intense rivalry affects the viability in the future. When the competitors are fewer and do not have any specific identification or substitution, it gives a less intense vibe.
It also affects the market and keeps it calm and disciplined.
Such a market offers the opportunity for businesses to promote their products equally to others.
However, when the situation is reversed, the competitors have intense rivalry between them which covers most of the space and makes it impossible for any other business to run.
It affects profitability and in such a situation, any business can fail.
Substitute products are those which can easily replace the need for your product.
For example, Video conferencing decreased the profit that air travel used to earn. Even though the products are different they can still do the work.
The customers don’t have to pay for tickets when they can simply do the calls.
Substitute products are not always the exact thing, but it can reduce profitability by reducing demand and need.
Numbers of Competitors
When the competitors are less in numbers, and you choose the market for you.
If you end up doing everything accurately and are able to get the urns, earn a profit, and promote the brand successfully.
It will also risk other competitors entering the market. Here you created your market but some of their competitors take advantage of the situation to get the business away from you.
The suppliers have the power too. The one who offers you the raw material for making your products, especially when you have few resources.
In such a situation, the suppliers have the power to squeeze out the best price from you as they know about your target market of yours along with competitors.
If you don’t agree, the chances of not having products to sell just because you don’t have raw material increases too.
Buyer bargaining power creates when the market has some kind of business at a small level and the same competition.
It gives buyers the most power to choose. They purchase the services and products in large quality even though the prices and products are the same as other suppliers.
It gives power to the buyer as they can force the business to lower the price to attract more people.
In some cases, the power increases so much that lots of businesses run out of profit.
Best Examples Of Target Market To Know
Let’s look at some major brands and how they nailed their target market.
Also, you can consider examples when you are planning yours.
Nike Target Market
Nike targets aspiring athletes as well as runners. They also sell equipment, shoes, apparel, and accessories to people who are either playing sports or interested in learning.
Also, they maintained their quality and price so it can be affordable to the people who are ready to invest but look for efficient results.
However, Nike focuses on pushing and motivating young athletes and runners.
Image source: rivalIQ
They make their ads, campaigns, and overall marketing focuses on motivating the people beyond their limits.
It can be seen in their ads where they aspire the viewers to keep going.
Lego Target Market
Lego is famous due to its household brand. Not just for the kids but parents also buy from them.
Image content: slideshare
Lego builds its marketing on appeasing the parents. they partnered with movies, video games, and brands, and converting into secure spaces for the children.
The company is now multimillion-dollar by targeting the audience and focusing on potential barriers.
Netflix Target Market
Netflix has its target marketing which keeps moving. It works more and more for their market.
Image source: brand24
They keep doing research on planning to decide what their audience wants from them. They started with mail-in DVD rentals to provide online streaming.
Also, word-to-mouth marketing helped in making it popular.
Common Mistakes To Avoid In Target Marketing
When you are starting your business, finding the market which can help you to grow and develop your brand is important.
However, it’s difficult if you don’t have a clear idea about where to start.
Finding the target market helps you to understand more about the business you are doing. Help in gathering more people who suit your brand the most.
But when you are choosing the market, make sure to avoid these basic mistakes as it can lead to choosing the wrong selections.
Getting Too Overwhelmed
Pretty common mistakes that happen when a business owner looks for the market. It’s easy to get distracted and lose focus when you have so many niches available.
There are lots of potential groups and selecting one is hard. Especially for the small business, it can be one of those stuck moments
To avoid getting into such situations, here are a few questions you need to answer when you choose any target for your business.
- Which market is profitable for your business?
- Which market will you love to work in every single day?
- Narrow down your options that relate to these two questions.
- Here you need the market that can help you in earning money to run the business.
But also it should be something you like to do and don’t feel bored.
Trying To Be Chase Everyone
You can’t be everything to your customers. There is a line where you can go and it’s important to learn about the line as early as you can.
Seth Godin, a marketing expert says that not every person you meet is your customer.
It means, your service is not going to be perfect or suitable for a every person out there. So, don’t get terrified with the idea of excluding the clients from your market.
When you narrow down and keep finding the people who are actually suitable for your brand, you will be able to create a stronger message for your brand too.
Assumption Too Much
Small business owners have this idea of knowing everything too often.
You might be surprised by what market stores and you don’t even know about it.
Doing market research, surveys, and other tools to find what is going in the market can help you in understanding more about your customers.
Also, feedback from your audience is important to consider as well.
It doesn’t matter if you just started or already working in the market, you must understand your customer needs and trends.
Underestimating The Competitors
The competitors help understand how to target and find the market.
You can get an idea about which market can be helpful for you by spying on your competitors.
It’s crucial to understand what and how they are functioning, so you can do it better and improve.
Take a look at the audience that your competitors have, what else stands out about them? Whom they are targeting? What needs and requirements they are fulfilling?
When you find the points, you can redefine your market strategies and approach your target market.
Not Analyzing The Data
Small businesses that already have their customers, don’t understand what goldmine they have.
You can use the existing customers to find out about the target market. Tracking your customers can help you in identifying whom you should target and what they are offering.
Analyzing your market data, you can also get an idea about –
- Are you targeting the right people?
- What is driving your people to buy from you?
- What changes do you need to do?
- Are you doing enough to satisfy them?
Defining Your Referral Group as Target Market
Collaborating or partnering with other non-competing businesses is an effective marketing strategy.
It can help you in getting attention and also drive sales. It’s one of the marketing strategies that eerie businesses should try at least in their early stage.
But, some of the time the business gets mixed up when it’s about determining the target market.
Instead of defining the type, you want to partner with, focus on defining clients that you want to attract and work with.
It’s important to focus to ensure that your clients are going to pay for the services and products.
Avoid getting mixed up and focus on the referring partner’s clients. They will have different requirements and needs, unlike your clients.
Frequently Asked Questions ( FAQs) about the target market for small business
The basic steps incur considering your customer base you have now and analyze the overall behavior. Including your product, competitors, and other factors.
Evaluate your decisions and research before you finalize it.
It includes segmentation, targeting, and positioning. These are the three activities of finding a successful market for your business.
It enables your business to use the resources and potentials to direct the people who share the same interest.
It helps in boosting the growth and loyalty toward the brand.
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I am a certified and awarded marketing expert. I’ve spent the last decade reading and writing marketing books and blogs as well as my articles helps people to start their business from scratch or boost their existing business.