Your target market sets the tone for your entire marketing strategy, from how you design and name your products or services to the marketing channels you use to promote them.
Here’s a hint before we dive in: your target market isn’t “everyone”(unless you’re Google). Your job in identifying your target market is to identify and understand a smaller, relevant niche so that you can dominate it. It’s all about narrowing your focus while expanding your reach.
In this guide, we’ll help you find out who is already interacting with your business and your competitors, and then use that information to develop a clear target market when building your brand.
What is a target market?
A target market is a specific group of people that you want to reach with your marketing message. These are the people who are most likely to buy your products or services, and they share some common characteristics, such as demographics and behaviors.
The more clearly you define your target market, the better you will be able to understand how and where to find your ideal potential customers. You can start with broad categories like millennials or single dads, but you need to get a lot more detailed in order to achieve the best conversion rates possible.
Don’t be afraid to be very specific. It’s all about targeting your marketing efforts effectively, not stopping people from buying your product.
People who aren’t involved in your targeted marketing can still buy from you – they just aren’t the focus of your marketing strategy. You can’t target everyone, but you can sell to everyone.
Your target market should be based on research, not intuition. You need to look for people who really want to buy from you, even if they are not the customers you originally intended to attract.
What is target market segmentation?
Target market segmentation is the process of dividing your target market into smaller, more specific groups. This allows you to create a more relevant marketing message for each group.
Remember, you can’t be everything to everyone. But you can be different things for different groups of people.
For example, as a vegetarian, I ate a lot of Impossible Burgers. I am definitely a target client. But vegetarians are a surprisingly small target market for Impossible Foods: just 10% of their customer base.
Here’s why Impossible Foods’ first national ad campaign didn’t exactly target me:
The target market segment for this advertising campaign was “meat eaters who have not yet tried Impossible products”.
Vegetarians and meat eaters have different reasons for eating plant-based burgers and want different things from the experience. Target market segmentation ensures that the company reaches the right audience with the right message.
How to define your target market
Step 1: Gather data about your current customers
A great first step in figuring out who is most willing to buy from you is to identify who is already using your products or services. Once you understand the defining characteristics of your existing customer base, you will be able to attract more of these people.
Depending on how someone is connected to your business, you may have little or a lot of information about them.
This does not mean that you should add a lot of questions to your order or subscription just for audience research purposes – it can annoy customers and lead to abandoned carts.
But be sure to use the information you get naturally to understand trends and averages.
Your CRM is a goldmine. UTM parameters combined with Google Analytics can also provide useful information about your customers.
Some data you might want to consider:
- Age: No need to go into details here. It hardly matters if your average customer is 24 or 27. But knowing what decade of life your customers are in can be very helpful.
- Location (and Time Zone): Where in the world do your existing customers live? In addition to understanding which geographic areas to target, this will help you figure out what hours are most important for your customer service and sales reps to be online, and what times you should schedule your PSA and posting to ensure the best visibility.
- Language: Don’t assume that your customers speak the same language as you. And don’t assume that they speak the dominant language of their (or your) current physical location.
- Ability and spending patterns: How much money are your current customers spending? How do they feel about purchases in your price range?
- Interests: What do your customers like to do besides using your products or services? What series do they watch? What other businesses do they interact with?
- Challenges: What pains do your clients face? Do you understand how your product or service helps them solve these problems?
- Life stage: Are your clients likely to be college students? New parents? Parents of teenagers? Pensioners?
If you’re selling B2B products, your categories will look a little different. You may want to collect information about the size of the companies that buy from you and the job titles of the people who typically make buying decisions. Do you do marketing for the CEO? Technical Director? Social Marketing Manager?
Step 2: Add social data
Social media analytics can be a great way to fill in the picture of your target market. They help you understand who is interacting with your social media accounts, even if those people aren’t your customers yet.
These people are interested in your brand. Social analytics can provide a lot of information that can help you understand why. You will also learn about potential market segments that you may not have thought to target before.
You can also use social listening to identify people who are talking about you and your product on social media, even if they don’t follow you.
If you want to reach your target market with social ads, Lookalike Audiences is an easy way to reach more people who share characteristics with your best customers.
Step 3. Check out the contest
Now that you know who is already interacting with your business and buying your products or services, it’s time to look at who’s competing.
Knowing what your competitors are up to can help you answer a few key questions:
- Are your competitors pursuing the same target market segments as you?
- Are they reaching segments you never thought to consider?
- How do they position themselves?
Our guide on how to do competitor research on social media will tell you the best ways to use social tools to gather information about your competitors.
You won’t be able to get detailed audience information about the people interacting with your competitors, but you will be able to get a general idea of the approach they’re taking and whether it allows them to create interactions online.
This analysis will help you understand which markets your competitors are targeting and how effective their efforts are in those segments.
Step 4. Clarify the value of your product or service
It boils down to a key distinction that all marketers need to understand between features and benefits. You can list the features of your product all day long, but no one will be convinced to buy from you unless you explain the benefits.
Features are what your product is or does. Benefits are results. How does your product make someone’s life easier, better or just more interesting?
If you don’t already have a clear list of your product’s benefits, it’s time to start brainstorming. When you create your benefit claims, you also provide some basic information about your target audience by default.
For example, if your service helps people find someone to look after their pets while they are away, you can be sure that your market will have two main segments: (1) pet owners and (2) existing pets. or potential nannies for pets..
If you don’t know exactly how customers benefit from using your products, why not ask them a question in a survey or even a social media survey?
You may find that people are using your products or services for purposes you didn’t even know existed. This can, in turn, change your perception of the target market for future sales.
Step 5: Create a Target Market Statement
Now it’s time to combine everything you’ve already discovered into one simple statement that defines your target market. This is actually the first step in creating a brand positioning statement, but that’s a topic for another day. For now, let’s focus on creating a statement that clearly defines your target market.
For example, here is the Zipcar brand positioning statement in the classic Kellogg on Marketing marketing text. We are interested in the first part of the statement, which defines the target market:
“To urban, educated, tech-savvy consumers who are worried about the environment that future generations will inherit, Zipcar is a car-sharing service that saves money and reduces carbon emissions while making you feel like you made the smart choice. a responsible choice that demonstrates your commitment to protecting the environment.”
Zipcar does not target all residents of a particular city. They don’t even target all the people in a given city who don’t have a car. They are specifically aimed at people who:
- live in an urban area
- have some education
- comfortable with technology
- worry about the environment
These are all interests and behaviors that Zipcar can specifically target through social content and social advertising.
They also help guide a company’s overall approach to its services, as evidenced by the rest of the positioning statement.
When writing your target market statement, try to include the most important demographic and behavioral characteristics that you have identified. For example:
Our target audience is [gender(s)] of [age range] who live in [place or type of place] and love [activities].
Don’t feel like you have to stick to those specific identifiers. Gender may not matter to your market, but there are three or four key behaviors you should include in your application.
If you offer multiple products or services, you may need to create a target market statement for each market segment. In this case, it is useful to determine the portrait of the buyer.
Target market examples
Target Market Nike
Despite their current market dominance, Nike is actually a great example of what can go wrong when you’re trying to target too broad an audience.
Nike started out as a sneaker company. In the 1980s, they tried to expand their target market beyond runners to include anyone who wanted a comfortable shoe. They launched a line of casual shoes and it failed.
Here’s the thing: non-runners were already buying Nike shoes to go to work or for other everyday purposes. Nike saw this as an opportunity to expand. Instead, they diluted their brand promise and the company actually started losing money.
A lesson, according to company founder Phil Knight?
“In the end, we decided that we wanted Nike to be the best sports and fitness company in the world, and the Nike brand to represent sports and fitness events. Once you say that, you will focus.”
While Nike certainly wouldn’t stop casual users from buying its shoes, the company has refocused everything from product development to marketing to its target market: athletes of all levels, from the pros to the beer league.
In fact, understanding the importance of concentration has led Nike to a very effective target market segmentation strategy. The brand has multiple target markets for different product lines.
On social media, this means they use multiple accounts to reach different target market groups. No account is trying to be everything to all customers.
The post below from Nike’s shared Instagram account is for the fashion and lifestyle segment of their audience.
But the company also has channels dedicated to specific sports. Here is an example of the content they create for runners:
And that means… the brand was able to return to marketing its products specifically for casual wear. It simply reaches the casual target market through different channels than its sports markets. This is a different target market segment and a different marketing message.
Like Nike, you can have one target market or multiple, depending on the size of your brand. Remember that you can only effectively target one target market segment at a time.
Takasa Target Market
Takasa is a Canadian home improvement retailer that specializes in fair trade organic bedding and bath towels.
Here is their target market, as identified by founders Ruby and Kuljit Rahra:
“ Our target market is the LOHAS segment, which means a healthy and sustainable family lifestyle. This group of people already lead or seek to lead a green lifestyle… We know that our targeted demonstration is very knowledgeable about what their families consume, as well as the impact of this consumption on the environment.”
In their social content, they clearly define the product characteristics that are most important to their target market: organic materials and fair labor relations.
Target Market City of Port Alberni
Why does a city need a target market? In the case of Port Alberni, the city is working to “attract investment, business opportunities and new residents.”To this end, they launched a rebranding and marketing campaign.
And a marketing campaign, of course, needs a target market. Here’s how the city defined it:
“ Our target market is young people and young families aged 25 to 45 who are entrepreneurial, family oriented, entrepreneurial, active, willing to be able to contribute to growth, well educated and skilled professionals or traders.”
In their social content, they highlight recreation opportunities designed for active and adventurous young families, even using the @PlayinPA moniker.
White House Black Market Target Market
White House Black Market is a brand of women’s clothing. This is how they describe their target customer on their website:
“Our client is…strong yet subtle, modern yet timeless, hard-working yet calm.”
This is a great description in direct communication with customers. But the marketing department needs to define the target market with some clarifications. Here is the detailed target market as described by the former president of the company:
“ Our target audience is women [with] an average age of around 45… at a stage in her life when she is very busy, mostly a working woman. She probably has one or two kids left at home [or] … her kids might be out and on their way to college.”
With their #WHBMPowerhouse hashtag, they focus on this key demographic of women in their 40s, busy at home and in their careers.