What is a target market and why does it matter?
It is important to note that a target audience is similar, but different. A target audience is a subset of your target market that shares particular attributes and has specific needs. Essentially, you can think of target markets as a collection of audiences that may be interested in your product or service.
How to Identify a Target Market
- Look for shared behaviors among your existing customers
- Use audience data to review demographic information about your customers
- Analyze your competitors to see who they’re targeting
A good starting point is to take a look at the people who are already customers. Do they have any common characteristics or shared interests? Even if your customer base seems diverse, it is highly likely that there will be some type of common denominator among them. Once you start to recognize these commonalities, you can begin to fine-tune these existing customers into a target market.
When exploring potential customers, it is best to start in broad terms. Once you have identified an ideal demographic, you can begin to refine, through various qualifiers – the specifics of your ideal customer. Keep in mind that it is important to consider who your customers are as people, not just numbers on a spreadsheet. How do they spend their time? What do they value?
Look at Your Competitors
- How does your product or service differ from that of your competitors?
- Is there any aspect of their platform you feel is lacking that you could improve on?
Target Market Segmentation
- Demographic segmentation is extremely common and is one of the most simple to use. This type of segmentation divides a market using elements such as age, income, family size, race, gender, occupation, level of education, religion, and nationality.
- Firmographic segmentation is similar to demographic segmentation, except that demographics look at individuals while firmographics look at organizations.
- Psychographic segmentation looks at psychological aspects of consumer behavior by dividing the market into categories like interests, attitude, social class, opinions, lifestyle habits, personality traits, and values.
- Behavioral segmentation divides markets by decision making patterns and behaviors, like purchase, consumption, benefits sought, lifestyle, degree of loyalty to a brand or product, and usage.
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