The Target Market, also known as Market Segmentation, is part of the Marketing Strategy, a crucial element of the Marketing Plan section of the Business Plan.
Target Market (Market Segmentation)
You need to appreciate the importance of customers and the importance or retaining customers. In order to determine your market, you need to list the characteristics of your market. A vital part of the Business Plan.
Who will be buying your product (or using your service), analyse your individual people (or businesses) using your product.
This is a crucial step for all future promotion of your product or service.
1. Who are your customers
Who are they?
As mentioned earlier, look at what the average age of your customers are, what are the genders, are they single or do they have a family. Are they educated people? What are their occupations? Do they have low, medium or high income? Does their ethnicity or religion have a bearing on what they do or don’t buy?
For example, say you are selling nursery furniture, who will be your target market? It is likely to be two groups, one is the mother to be is out looking for furniture for the nursery, it may be that they are just starting their first family so money may be tight as they will soon be dropping one income. The other group could be the grandparents buying the furniture for their children. They are more likely retired, or have less financial commitments, so have more money to spend.
2. What do they enjoy doing?
Look at what your potential customers like doing in their spare time. Who are they, where do they belong, what they belong to and why.
What are their beliefs and values, are they the main purchaser in the family, what social class do they belong to and what sort of lifestyle do they lead..
Do they have hobbies or participate in social activities? Where do they go on holiday?
Do any of these have a bearing on your product promotion?
3. Where are they located geographically
- Are they locally?
- Do they live in your region?
- Do they live in your country?
- Do they live overseas?
Can you think of why your customers live in these areas? For example, if you are selling woollen jumpers, you could think about seasonal temperatures, you would assume that your customers are therefore from areas that get very cold in the winter, and not those that are close to the equator where it is warmer all year round.
If your customers are local, is that because it is a more consumable product?
Can you start to see a segment of customers? Or a possible Target Market?
4. What are your customers buying
Look at what your customers are buying, can you see any trends in the pricing or how it is packaged or what the product features are?
Then have a think about what your products can do. Can you see some similarities with your product? Are these trends what you need to be aiming your advertising at?
5. What is their decision making process.
Remember – think about these from the point of view of the customer, not your own. Go out and talk to your customers or potential customers. This will help you to satisfy their needs with your products.
a) What is their decision making process?
First of all, they decide that there is a need for a product.
Then they have to have a look around and find information regarding which products/services provides them with a solution to meet their needs. What are the customers looking for, what is motivating them?
They will then process that information and decide which product will best meet their needs. They will then purchase the product. How do they make the choice to buy that specific product – is price or quality or value for money?
However, it does not end there. Remember, they will be evaluating the product they bought, assessing that it actually meets their needs, and that it does what they thought it would do. This could also be a big part of your marketing, to ensure that customers will come back and buy again from you.
Look also at the different types of customer personality. This will affect how they buy, are they quite innovative, will they try new products without hesitation or are they more reserved cautious about buying new products.
b) What are the benefits that your customers are looking for?
List what the perceived benefits of your product are to the customer. This may help to identify groups of people that are looking for different things from a product. For example, some may see that the latest technology is a benefit, others may see the colour of a product as a benefit.
To conclude, hopefully you now have a full picture of your target market and now know your customers.
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Target Market
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