Braydon is a marketing manager for a company selling meal kit delivery services. He and his team meet to brainstorm messaging ideas for a new social media campaign. Click through the quotes below to review their top contenders. Which message should Braydon pick?
LEARNING ACTIVITY READINGS
What Is a Target Market?
A target market is a specific group of potential customers most likely to buy a company’s product or service. People in a target market share characteristics: age, sex, location, income level, interests, values, etc. Review an example of the target market for a meal kit delivery service below.
Target Market for a Meal Kit Delivery Service
· Busy professionals
· Age range: 20s to 40s
· Earn a household income of $75k or more
· Live in urban areas
· Health-conscious, but lack the time to grocery shop or plan meals
A target market describes a specific segment of the total market. It does not include everyone within the market.
Why Define a Target Market?
Who is your solution for? Defining a target market helps companies channel resources to attract customers with the highest potential sales growth and brand loyalty. By contrast, marketing to anyone and everyone risks wasting resources on people who have little interest or need for your product.
How to Define Your Target Market
Imagine that your company sells water bottles. How do you identify a target market for this product? Start by examining your product, customer profile, and industry or competition. Expand the rows below to learn more.
Analyze Your Product or Service
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First, map out your solution’s features and benefits. What are your product’s unique selling points? What problem does your service solve, or how does it deliver value to customers? From there, you can reverse engineer who has the greatest need for your solution.
For example: Perhaps your water bottle contains a replaceable purifier cartridge, allowing users to turn any freshwater source into drinkable water free of pesticides, pathogens, and other toxins. The bottle also fits in the side pocket of most backpacking or hiking packs. Reviewing these benefits, you know this product benefits backpackers and hikers more than urbanites or gym members.
Analyze Your Customers
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Analyze your current customer base. Who disproportionately buys your products or services? What characteristics do these customers share? If you use sales or customer relationship management (CRM) software, check for reporting tools that identify key demographics about customers, such as their:
· Age
· Sex or gender identity
· Location
· Household income
· Occupation
· Education
Also, consider conducting interviews, surveys, or focus groups with repeat customers to explore psychographic information such as their values, interests, and lifestyle.
For example: After looking at data from your sales software, you realize that most of your customers are in their 20s to 40s, and they predominantly live in the Western region of the United States.
Analyze Your Industry and Competition
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Finally, examine industry reports and data. Research your competition as well as buyer habits and market trends. Which gaps could your company fill? What is the potential size of different market segments? Consider these questions when expanding your market or developing new products.
For example: A competitive analysis may reveal that few water bottles on the market contain a water purification system. Perhaps industry journals also report rising demand for outdoor sporting activities among younger populations. These insights might direct you to target backpackers and hikers in their 20s to 40s.
Identify your target market by combining experience with data. What is your experience selling so far? What trends can you identify in sales and market data?
Characteristics to Consider
As you research, look for defining characteristics that your customers share. Some common details that companies may use to describe their target market include, but are not limited to:
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Location
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Age range or family status
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Sex or gender identity
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Household income, education, or occupation
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Values, interests, lifestyle, or buying motivations
Summary
A target market is your most profitable customer segment. To define your target market, examine your current products and customers. Who does your solution benefit most? Who disproportionately buys your products or services? What characteristics do these people share? You can also conduct a competitor or market analysis to identify gaps or opportunities. Remember: Your solution won’t appeal to everyone. Defining a target market helps you engage and convert more customers by reaching the right people with precise messaging.
Continue to monitor your target market and track changes through ongoing research, such as customer surveys and sales data. Update your target market and marketing strategy as needed.
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