A product without an appropriate target market will not bring value to anyone. Similarly, having a valuable product without a requisite target market will also yield a negative result. This is why understanding your target market is a must-have and must-do.
Moreover, it becomes a challenge when a business owner does not understand the dynamics of his customers and how to best bring value to them. Hence, knowing the exact people to match your products or services and ensuring you understand their needs and preferences make it easy to succeed in your business.
This article is meant to bring to your consciousness the dynamics of understanding your target market as a business owner, its importance, and its operations in business planning in its simplest form.
What is a Target Market?
A target market refers to the people who are interested in the product or service that a company offers. So, in a more personalized form, a target market is the group of individuals who will likely purchase whatever you’re offering—a product or service.
Understanding Your Target Market
It is very important to conduct market research before introducing a new product or service into the marketplace. In addition, conducting market research is the key to the door that opens you to a world of business success.
Moreover, you cannot just get to the marketplace and then dump your products at the feet of supposed customers—who, by the way, you haven’t known whether they’re interested in what you’re offering or not.
If you do this, you might lose your business because it won’t go well. But I’m certain you won’t make such a mistake, right? So, to avoid unnecessary loss of products and services, you need to understand your target market.
However, some business owners often make the mistake of generalizing the reach of their products or services. Even the most generalistic product like Coca-Cola is still not for the general global audience.
Furthermore, no one business product solves every problem and appeals to everyone—not everyone will be interested in your product(s), and that’s a fact.
Hence, understanding your target market means you can narrow your market research to those who need your product or service, their demographics, age, gender, and other factors that can help you.
Another way to help you understand your market is to segment it. Segmenting your larger target market into smaller groups will help you better understand your customers and the best strategy for adding value.
It’s also important to know the four common types of segmentation that can help you understand your target market. They are:
i.) Geographic segmentation is based on your customers’ locations, such as state, city, or street addresses.
ii.) Demographic segmentation, which is based on the race, gender, and age of your customers
iii.) Behavioural segmentation is based on how customers use products and services and the benefits they receive.
iv.) Psychographic segmentation, which focuses on the lifestyle, values, attitudes, interests, and personalities of your customers
Having segmented your target market into these different segmentation types, it becomes easier to identify your customers and determine how best to reach out to them.
To effectively reach out to your customers, you must develop tailored marketing and sales strategies to help you get your products into their hands and make more profit.
Importance of Understanding Your Target Market
.Though we’ve examined what it means for you to understand your target market, we’ll also discuss some of the top reasons why it’s important for you to have a solid understanding of it. Some of the reasons are:
1. Product Description
One reason you need to understand your target market is so you can tailor your product(s) to meet their needs. Additionally, a well-defined target market will help you give your product a proper description.
Furthermore, your product must be able to answer the different questions your customers may have concerning it. Moreover, understanding your target customers will help you define your purpose in entering the market.
2. Managing Expectations
When you see a product’s ad or read through its information, you will notice that you’ll be building expectations on the product before you use it. If the product fails to meet the already built expectation, the customer will likely not use that product again.
As a business owner, you must understand your target market so that you can manage their expectations effectively. In addition, your product is designed to solve a problem, and your customers look forward to this solution when they purchase your product.
Furthermore, you need to state clearly the extent of the effect of your product. When you do so, customers with very high expectations will know what you offer and will not question the effect of your product since you’ve clearly stated it.
3. Makes Advertising Easier
Imagine your target market is women and their footwear, and then you run ads in a sports magazine. Doing this means you’ll make the best decisions for your customers and business.
Furthermore, when you understand your target market, you can effectively execute ads that yield results. This means that you need to know what kind of magazines your customers read, what entertainment they like, what social media platforms they use, and what makes them buy your product/s.
Based on your findings, you can align your message to suit their needs and create a lasting impact on them.
Target Market for Business Planning
A well-defined target market is essential when planning and researching your business. Below are five areas in business planning where an appropriate target market is a pillar of a successful business.
1. Simple Feasibility Study
First, you need to test your business’s impact in the marketplace. A simple feasibility study can determine whether your product is feasible in the marketplace and can grant you access to your customers’ buying habits.
Imagine selling a baby item to a male college student. You can already tell the idea is dead on arrival because that’s the wrong target market. Hence, your target market is essential to determining whether or not your idea will see the light of day.
2. Conducting Market Research
Another area in business planning where your target market finds relevance is when you are conducting market research.
Moreover, your market research is done so you can identify your customers. The moment you’ve identified them, you are ready to introduce your products. You’ll save time and money that would otherwise have been wasted.
3. SWOT Analysis
A SWOT analysis can identify your business’s strengths, weaknesses, opportunities, and threats. All these parameters hinge on your target market and how they respond to your products.
When you can effectively determine and track your business’s four parameters concerning your target market, you can take the necessary actions in those areas.
4. Business Plan
A good business plan reveals your mission—why your business exists—and your target market—who your business was created for. These two major concepts form the foundation of any business.
Moreover, your business plan will not make sense if it does not align with your customers’ needs. Hence, the effectiveness of your business plan depends on reaching your customers and making an impact.
5. Marketing
As discussed earlier, this is another crucial area where you have to get it right, as your target market informs all your marketing strategies.
In addition, having the right marketing strategies bring your product to your target market. Moreover, you do not want to write a message meant for your professor and then give it to your colleagues—you know it’s a waste of effort.
So, the message that is being passed through different marketing strategies must align with the needs of your target market.
Conclusion
When meeting needs and creating value, you must pay close attention to your target market because your business will not exist without them. Moreover, they form the foundation of your business and determine its success or failure.
With the information you have at your disposal, I’m certain you’ll return to the drawing board to make changes when needed. Remember that when your business goals align with meeting your customers’ needs, your business will succeed.
