Even if you are not a marketing professional, surely you have heard about the target market, an elementary concept when it comes to marketing and promotion.
Possibly, just by having heard about it, you already associate it with a segment of the public to which a product is directed. Certainly, this perception is correct, but since it is such an important element, you should go a little further and get to know it thoroughly.
Do you think it is a good idea? If so, you are in the right place! Next we will explain what is the target marketthe importance of this segmentation, how to define it for your business plan and much more.
What is the target market?
The target market of a company is the segment to which it directs its products and services. and the different promotional and brand disclosure messages.
Although its explanation seems simple, it is a really complex element with great potential, from which Digital or traditional Marketing strategies, new product development parameters and many other aspects of a business emerge.
This concept is directly related to that of the target audience, although there is a small —and at the same time substantial— difference between the two.
What separates these factors is breadth. The target market has a much broader focus on marketing, which is why it should be considered as a starting point for a business project and included in the business plan.
Specifically, it refers to a broad set of individuals who share certain characteristics and needs, which make them potential customers.
In the meantime, the target audience is a segmentation of that marketwhich helps to specify who can be considered potential buyers of a certain product or service.
For example, in its business conception, a culinary training institute may target people from a certain region who are passionate about cooking, with a specific level of financial ability and a predefined age range.
Then, this company could segment target audiences for each of its training alternatives.
For example, for graduates I would define professional chefs and, in general, people with experience in the area as potential clients, while for basic courses I would take as a reference young people and adults without experience and who are looking to change their work environment. .
In turn, the target audience can be defined with a much more specific profile: the buyer person. It is a semi-fictional representation of the ideal client of a brand or some of its products or services.
In general, we can say that The target market is a broad and primary concept for business development and marketing.from which specific and secondary (but no less important) concepts emerge, such as the target audience or the buyer persona.
What is the importance of the target market in marketing?
The definition of the target market has a direct relationship with the success and profitability of companies.
In fact, if this concept is not taken into account in the business plan, the ventures have no direction and become unstable, improvised projects that are highly prone to failure.
When creating a business, thinking that your products and services “are for everyone” is a very serious mistakewhich you really can’t afford to commit in the competitive 21st century.
Even companies that sell basic necessities need to define a target market in order to strategically select the location of their establishments, the pricing policy and many other elements.
In addition, the identity of the business depends on the delimitation of the target market. Colors, fonts, tone of voice and even the name of a company are aspects that must be developed based on the type of public to which your offer of goods or services will be directed.
Beyond all this, the target market concept helps determine the profitability of the business idea.
By splitting a segment you will be able to answer many questions that commonly arise before starting a project, such as:
- Are there really people who are willing to pay for this service/product?
- Are there enough users for the business products/services?
- Will this idea really have value for consumers or will it be just another one?
- Is the location of the store(s) adequate?
They are doubts that we all have when undertaking, right? Luckily, you will be able to clear them through the definition of the target market, a transcendental concept in the business conception process and, later, in market management and its development in general.
What are the characteristics of the target market?
You already know that your company, or any other, can satisfy all the demands of the population, for which it is necessary to direct efforts to a specific segment.
In addition, for it to be profitable to target a certain target market, it is important to ensure that it has certain characteristics, such as:
Linking with existing resources
When it comes to segmenting the market to define your target, you have to think very carefully about the resources you have as an entrepreneur.
We are talking about human talent, technological equipment, own knowledge and any other element that allows you to carry out a commercial project and add value.
For greater use and less investment, it is necessary that your target audience has a certain connection with them.
For example, if you have knowledge about confectionery, you have some basic equipment in this area and you have partners who cook professionally, you have to take into account all these elements to carry out a market segmentation that allows you to take advantage of them.
In that case, you could target an audience of a certain economic class and age range that usually eats desserts on weekends and enjoys these types of preparations.
breadth and scope
With this we do not mean that your target market should be the entire population of a certain region or millions of users of the digital community with different characteristics.
Simply, it is necessary that your market has enough potential buyers and clients so that the business idea is profitable.
For this reason, it is important not to exceed the limit when seeding the market. An excessively specific delimitation will reduce the possibilities of expansion and growth.
Another objective of defining the target market is to connect with niches that have been abandoned or taken very little into account.
It is a great idea to target groups that, although they are willing to satisfy their needs through purchases, do not find alternatives that really motivate them.
In general, it is important that when segmenting you find opportunities within conglomerations of users that have not been fully exploited by potential competitors.
What criteria should be used to define the target market?
Despite being a general concept, which tries to cover the entire audience that a brand can reach through its messages, products and services, When defining the target market in the business plan, you should be guided by a wide variety of criteria..
Some of them are:
- socioeconomic level;
- training level;
- physicals conditions;
- consumption habits.
Also, to achieve a real connection with the public and understand what they need, it is important that you take into account their preferences, needs, problems and ailments.
What is the process to define the target market?
In addition to taking into account the above criteria, to define the target market you must carry out a process that consists of 3 major steps.
1. Market definition and exploration
Before you start collecting audience information, you need to define which market you plan to enter, for example:
- massive consume,
- automotive Parts,
- digital Products,
- Technological devices,
- among many others.
Once you delimit this aspect during your market study, you will know what types of people are recurring consumers of the segment and which ones match your resources and the business idea you want to start up.
2. Collection of information
This is the key point in the process of defining the target market. To know the public and determine what your segment will be, you must use different information gathering techniquesWhat:
This is a really specific survey, which deals with obtaining as much information as possible from each user.
Some of the questions it considers are:
- What is the first thing you consider when buying a product?
- How much are you willing to spend for X product?
- How often do you buy X product?;
- Where do you usually buy the product?
As you can see, it is a survey based on identifying consumption habits.
Personal data, such as age, educational level, preferences and area of residence, should also be obtained.
If your business idea is just getting off the ground and you precisely need a target market to make a good business plan, you can base the satisfaction survey on product lines, models or types.
Basically, try to find out how comfortable consumers feel with goods, services or proposals similar to those you hope to launch on the market.
In addition to this type of survey, you can also use the classic observation technique to study the consumer of your possible target market.
One of the common practices is to go to the establishments where these users usually make their purchases to identify their questions, the amount of money they usually spend and other aspects.
3. Market test
This step is key to determining the feasibility of the venture and confirming that the audience has been defined correctly.
For example, software and application companies employ this technique through free and basic versions of their products. In this way they determine if their products are really useful for users and, in general, how they are perceived.
Thus, organizations can analyze whether they defined the market correctly or whether they developed their products truly attached to the characteristics of the people in the segment.
That’s it! You already know what the valuable concept of target market is about and how to define it.
Do not forget that the target audience and the buyer person also start from this element, which is why it is essential to manage your business and develop strategies that allow you to get closer to the user and generate sales opportunities.
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