There is a big marketing buzz word: Target market. We often write it off as marketing fluff but we need to take it very seriously. It’s the basis of everything! It decides our 4 P’s of marketing, how we spend our money, where we spend it, etc.
Defining a target market should be the first step in any product development cycle. You can build an amazing product, but if you have no one to sell it to you’re screwed! And don’t say ‘EVERYONE’! Even Google has target markets. So, whether you’re a new business or an existing business trying to increase sales, start with learning how to define your target market.
What makes my product different?
I’m opening DK’s Cupcake Emporium, I know customers will come because everyone loves cupcakes, and mine are delicious! But will they? What makes your cupcakes better than any of competing bakeries in town? And don’t say “because they are made with love”!
You can help answer this question by defining your target market, and develop your product to fit their needs. For example, cupcakes made with real prune juice for our aging population! Okay I apologize, that was rude, but my point still stands.
Designing your product(s) with the end user in mind, or your target market, is key; which leads into my next topic.
Knowing your audience
This is easier for business that have already been established. They have many tools to discover who their ‘key’ demographic is. This key demographic should be their target market. When you first open, you might believe you know who your target market will be, but you could be totally wrong. In practice, initial marketing efforts may surprise you. So, you have to be willing to adjust in order to capitalize on unexpected outcomes.
For example, you start a hip new coffee shop that you thought all the young people in town would love. (Not sure why you would, are you better than Starbucks? Maybe you are. Innovation is what drives success in every market) You open the front doors and business is doing well, but it’s all middle-aged moms! You’ve been advertising on social media, targeting young people, but its moms who are keeping your business afloat!
Do you keep ignoring the moms and continue to target the youngsters? Or do you realize that the moms should have been your target market from the beginning? The answer is the latter. But be careful not to lose the reason the moms loved you in the first place. A great way to figure that out is… just ask them!
Surveys are a great way to find out important information about your customers. But, proper survey practices are a very complicated topic, so we will cover that in another post. Let’s focus on the topical concepts for now; and then next time we will dive deeper into the weeds.
This flows well into my next point: the importance of demographics. Understanding the behaviors and habits of your target market is paramount. Now you’ve learned to embrace your mom-friendly coffee shop, time to figure out the demographics of your new target market.
Are these your “typical” mom’s? Are they soccer moms? Or business moms? Kids in elementary school? High school? College? Are they in their late 30’s or in their early 50’s? By learning the demographics of your target market, you can better target them with future advertising and promotions. If these are soccer moms, you could sponsor a local soccer team. If these are business moms you could give them deals for corporate catering, etc.
But I don’t have an audience yet.
Maybe you’re still in the idea phase of your business. You haven’t opened your doors yet. Good. Now is the perfect time to develop your target market, so you won’t make any mistakes. I know you’re probably asking, “How will I know my target market before I sell anything?” Well, a good way to figure that is to look at your competition!
Now I’m definitely not saying you should target the same people as your competitors, but a similar group. You need to find your niche. Back to our Cupcake example, let’s say your competitor, Diabetic’s Desires, primarily targets a customer base made up of rich, retired women. Instead of trying to compete directly, try to find a niche. You could focus on catering events that these women attend. Let DD’s focus on individuals and you can focus on catering weddings, retirement parties, etc. Or, if DD’s is popular with higher-income buyers, offer coupons to target thriftier shoppers. You can find a niche within any market based on a number of different demographic factors.
I know; I’m sorry for contradicting myself. There could potentially be a problem with going after a niche market that is too small. Sure, you are going to dominate, but there needs to be enough customers in that market to keep you going. It depends entirely on your market. Famous entrepreneur Ryan Lee says “there’s riches in niches.” You might be surprised how much specializing on a very specific target market might boost your business.
Are their enough customers who are fair-trade, organic, vegan, diet-friendly customers to rationalize focusing my business on them? Of course you want to keep your customers happy, but are they spending enough money to pay your bills?
The key take-away here is that trying to sell anything, a product or a service, without a specific and defined target market is bad news. Focus your efforts on demographics that work. There is the old marketing saying: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half,” Minimize your lost half!