"There is only one winning strategy. It is to carefully define the target market and direct a superior offering to that target market" Philip Kotler
I am sure everyone has heard of the words 'Target Market'; many use this phrase even though many do not know what it means or how to identify their target market.
Your target market is the group of people you want to sell your product or service to. They are the people that you are directing your offering to. Having a target market filled with specific people does not necessarily mean you are excluding other people, it just means that those specific people are your primary focus while everyone else is secondary.
Target markets are based on demographics - where people with similar demographics (age, gender, employment status, education level, income level, marital status, family status, ethnic background…) are grouped together. And target markets are also based on psychographics - where people with similar psychographics (values, attitudes, behaviours, lifestyles, personality, interests/hobbies...) are grouped together.
Like Philip Kotler mentioned, as quoted as, having a target market and providing your offerings to them is the single winning strategy any business can have.
Why? It helps the business focus!
Focus in terms of product or service innovations - you know what products or service innovations to introduce first based on the needs of your target market.
Focus in terms of marketing and advertising budgets - your communications is directed specifically towards your target market and speaks into their needs.
And focus in terms of distribution - especially for MSME, it is difficult to manufacture enough products or provide services to be available in every purchasing channel. By understanding your target market and where they purchase, you can focus on ensuring those channels are stocked with your products or services.
So how do you identify your target market?
If you have your product or service already in the market:
Review your current customer base and identify who is buying most of your products or services. Once you have identified these people, check to see if you can find patterns in their demographics and psychographics. This is known as Big Data Analysis
Understand why these repeat customers are buying from you; speak to them and identify the reasons why they choose you over your competitors. This will give you an idea of the needs that your product or service is reaching for this target market. This is known as Consumer Research
If you do not have your product or service in the market:
Review your competitors and identify who is buying the most from them and who they are targeting. This will help you understand who your competitors are targeting (or can potentially be targeting) and the groups of people that are not currently being targeted nor attended to. These groups of people pose as low hanging fruits for your products and services. This is known as Competitor Analysis
Review your products and services; understand the function they serve (features), the benefits they provide to people (emotional) and the value they bring to specific groups of people. With this you can start to carve out different target groups and the reasons why they would buy from you. Target markets that have a large group of people in them and receive the most value from your product or service should be your primary target group. This is known as Product Analysis
Identifying your target market and positioning your products or services for your target market is an efficient and effective process to ensure you are not losing out to your competitors and you are not missing out on opportunities for more sales.
Take a stab at identifying your target market. If you have any questions, contact Versa Research for all your research & consulting needs!