If you are struggling to meet your sale and lead goals, the most likely culprit is that you have failed to identify your target market. Narrowing your target market ensures that your brand and your products or services are seen by the right people who are most likely to make a purchase. By reading this article, you will learn what a target market is, how to create a target market strategy and some brilliant examples of how companies use target markets to create plans that boost their business.
What is a target market?
Your target market is a group of potential or current customers that are most likely to purchase your products or services. The earlier you establish your target market, the sooner you can customise your products/services and advertising strategies accordingly to reduce your marketing spend and maximise your results.
There are four key components associated with a target market:
- Demographics: Demographics include factors such as the age, gender, income and employment status of your customer.
- Geographics: Geographics is all about identifying where your customers are located this could be as narrow as a particular street or as wide as an entire continent.
- Psychographics: Psychographics focuses on the characteristics of your customers, such as their interests, personality and social status.
- Behaviour: Behaviour in target marketing is all about identifying your customers' behavioural patterns when interacting with your company.
How to identify your target market
Identifying your target market is often a much greater feat than business owners expect. You must undergo extensive research and go through a multi-step process to properly identify your target market.
Step 1: Analyse what you have to offer
You will first need to fully understand your products or services to identify your perfect target market. You need to ask yourself:
- What problem does it solve?
- What sort of need does your product fulfil?
- Why is it necessary?
- Why would someone want this?
Create a list of all of the key benefits of your product or service.
Step 2: Ask yourself, who benefits the most from what you offer?
Now that you have a list of all of the key benefits, you will need to identify a group of people who would benefit the most from your product or service. Ask yourself:
- What age group is this most appropriate for?
- Would this product or service sell better if it targeted lower-income or high-income earners?
- Does the employment status of a customer play a role in purchasing behaviour?
- What location has the highest number of potential buyers, and which location is most appropriate for your business's activities?
Step 3: Narrow down your target audience as much as possible
Once you have identified a broad target market for your product or service based on your demographic, you will need to narrow down your target market to enhance your marketing efforts. You can narrow your target market by taking into consideration psychographics and behaviour. Ask yourself:
- Who’s interests best align with this product or service and its benefits?
- Is there a particular social status that needs to be taken into consideration?
- Is there a type of personality a person could have that would make them more likely to make a purchase, if so, who meets that criteria?
- What sort of lifestyle best fits what you have to offer?
Step 4: Competitor Analysis
Find competitors that best match your product or services and take a look at how they market in the industry. Check to see:
- If they have a blog.
- What social media channels do they use most frequently
- If they use paid advertising
- If they are focused on traditional or digital marketing.
- If their marketing efforts align with the same target market that you have identified.
Analysing successful competitors can be a great way to gain insights into your target audience and help prevent any starter mistakes. Although you should develop your own original target marketing strategy, you can adjust your plan accordingly with any ideas or improvements sparked during a competitor analysis.
Step 5: Identify your target audience
People often confuse their target market with their target audience, but they are two very different things. Your target market is your ideal customer, and your target audience is who will make or influence the buying decision. Ask yourself:
- Is this product or service likely to be purchased as a gift?
- If you are in the B2B industry, would it be best to target the business owner directly or an employee such as an HR administrator or a marketing team?
- Who will influence the purchasing decisions? For example, would a spouse play a role if it is an expensive product?
Target Market Examples
Understanding and identifying your target audience will shape how you market your business and help you efficiently adjust your marketing strategy to any changes in consumer behaviour. Here are some examples of target markets for some of the largest companies and how their desired demographic shapes their marketing efforts:
1.) Target Market for Starbucks
Starbucks' ideal target audience is anyone, male or female, between the ages of 22 and 60 in the middle or upper class. Anybody with an annual income of 90,000 or more is idyllic for Starbucks because they can afford to pay a premium for a coffee and are more likely to make a purchase on a daily basis.
The company recognises that its target market consists of two main occupations, university students and employees. Students and employees both have busy lifestyles and are more likely to buy coffee on the go, i.e. between work or university and home, which is why its stores are prevalent in suburban areas, especially in cities where people tend to live more hectic lives.
Starbucks' target market also consists of a high percentage of tech-savvy individuals. To cater for this consumer interest in technology, Starbucks introduced their mobile app in 2015 to take orders and handle payments. The company also introduced free WIFI to its locations, this catered to not only the tech-savvy but also the university students and employees who can now use Starbucks like an office away from home (Increasing visits and the amount of time spent in their stores and in turn their profits).
The company also acknowledged that its target market was becoming increasingly environmentally conscious and so pledged to become a more sustainable brand. Sustainable coffee production, recycled coffee cups, and investment into farmer support were just some of the actions the company took!
2.) Target Market for Gucci
Gucci’s brand consists of premium, high-priced products, so they focus their marketing efforts on high-income earners.
Gucci’s products would be considered by many to be Veblen goods, meaning that their high price tag gives the consumers the impression that their products are of a higher quality and are exclusive to the wealthy. Because of this, Gucci is cautious in its physical store locations and avoids countries with a predominant working class, focusing its marketing efforts on the likes of North American and European countries. However, in recent years, the company has increased its marketing efforts in wealth-growing countries such as Dubai.
Around half of Gucci’s sales now come from millennials, and to cater to its growing popularity amongst young adults, the company has recruited more celebrities that are predominantly popular with the millennial demographic to endorse their brand.
3.) Target Market for Zara
Zara’s main target audience is adults between the age of 18-35, male and female (advertising to both in their campaigns). Because of their younger adult demographic, the fashion retailer has a strong focus on keeping up with the latest fashion trends and regularly updating their inventory accordingly.
Zara’s target market is the working and middle class, and so their prices ranging between 20-50 GBP. They also offer discounts regularly to remain appealing to their chosen demographic (Their products are usually priced at a quarter of their competitors’ brands).
Because of Zara’s younger demographic, the company has a strong social media presence focusing on platforms such as Pinterest, Instagram, Twitter and TikTok, all of which have a high volume of millennial users.