How to Define Your Target Market & Target Audience
Do you know who your target market and target audience are? In order for your business to be successful, you'll need specific answers to this question. If you answered something along the lines of "we target a wide range of people" or "our business caters to everyone," you could be in deep trouble here.
When you target everyone, you're really not targeting anyone. You can't be everything to everyone. While there are large companies, like Amazon, that do cater to everyone, it has taken them decades to get to that point. You have to start small and work your way up over time.
In this article, we'll go over what target markets and target audiences are and how to define the market segment that your business should be focusing on to grow and be successful.
A target market is a specific segment of people that a business plans to serve its products or services to. Figuring out your target market is essential when it comes to developing your products and services and the marketing efforts used for promoting them.
A target market contains the end-users of a product or service and the aim of marketing is to understand your customers well enough that your products and services sell themselves.
In order to stand out amongst the competition, you need to build your products and marketing campaigns for a specific and defined group of consumers. If you don't, your products most likely won't fully meet the needs of your customers, and these people will turn to your competition for what they desire instead - meaning you won't make any money.
Several different things can define your target market. Here are some examples:
One great example of demographic marketing is McDonald's. While the company has grown over time and targets numerous markets and audiences, they have created dedicated products and marketing campaigns for different segments.
For example, one of their primary target markets is children. For this market, they provide Happy Meals with toys, play areas, and promotions featuring Ronald McDonald and Disney characters.
However, times are changing, and with the change, McDonald's sales have been on the decline, leading them to make necessary changes in reaction to the changes in one of their target markets. Millennials have become the largest generation in the United States, and they care more about healthy foods than the previous generations.
In response to this change, McDonald's has updated their products and services to include fresher, healthier menu options.
Your target audience is narrower than your target market - it refers to the group of people targeted by marketing messages. While your target audience may not be the end-users of your product, they are the people you plan on directing your marketing to.
If you want to communicate with your target audience effectively, you first need to understand who they are and what they need and want.
No matter what your product or service is, you're ultimately trying to educate your customers. Your customers need to be continually educated on the advantages of doing business with you over your competitors, they need to be trained to use your products effectively, and they need to learn how to make improvements in their lives with what you have to offer.
While one of McDonald's primary target markets is children, there is a problem with this - children don't have any purchasing power, the parents do.
So, McDonald's created their Happy Meals to serve the target market of children but create advertisements promoting these Happy Meals aimed at the target audience of parents.
In their ads, McDonald's mentions things such as "no artificial colors, flavors, or preservatives," which may not be all that interesting to children, but are extremely important details to parents. Kids care most about the fun little toy they get with their meal, but these are just briefly mentioned at the end of ads - because when concerning Happy Meals, children are the target market, but they are not the target audience.
Difference Between Target Market & Target Audience
While target market and target audience are similar, there are some important differences between them and the implications each of them has on your business.
The target market impacts every decision a business makes.
- Products and services are created to meet the wants and needs of your target market.
- Sales processes are built around the target markets' shopping preferences.
- Pricing is set to appeal to the target market.
- Packaging is made to appeal to the target market.
The target audience, on the other hand, only impacts decisions related to marketing messages. Because of this, target markets are usually comprised of the end-user of a service or product, while target audiences might or might not be.
Target Markets & Audiences can be the Same
Most of the time, the target audience for a marketing message is the same as the target market. For example, a yoga sportswear brand may identify their target market to be single women between the ages of 25-35, who regularly go to the gym and demonstrate an interest in yoga.
In this particular example, the target audience is the same as the target market. However, marketers can hone in on their target audience even more. Marketers may choose to use Instagram advertising to reach their target market, meaning the target audience can be further defined as Instagram users who follow specific yoga-inspired accounts, have recently made online purchases, live in particular places, and value fair trade items.
The Effectiveness of Targeting
A lot of people believe that casting a wide net is the best way to capture more customers. But the most successful businesses recognize their targets ahead of time. They take the time to research who these people are, where to find them, and when to advertise to them.
When you have a clearly defined target market, every little detail of your products or services can be tailored to meet their wants and needs, resulting in happy customers and positive feedback.
Also, with a clearly defined target audience, all the details of your marketing campaigns can be tailored as well, to appeal to their emotions, interests, and views.
Identifying Your Target Market
Now that you know what target markets and target audiences are, we'll go over how to define the market segments you should be looking at.
#1: Figure Out what Benefit Your Business Provides
Start by figuring out what your end goal is, like satisfying your customers' wants and needs.
You need to be able to answer these three questions:
- What problem are you trying to solve?
- What desires do you want to fulfill?
- What needs are you trying to meet?
Rather than defining what you do or how you do it, identify the outcomes you provide for your customers.
Rather than saying that you sell home exercise equipment online, tell people how they can benefit from your company. "We strive to help people lose weight and get in shape, improving their confidence, self-esteem, and overall mental and physical health. We allow them to buy equipment conveniently online and do all this within the comfort of their own homes, so there's no need to feel self-conscious!"
Once you've identified what your benefits are, it should be pretty clear who's in the most need of your products or services. So, ask yourself whose needs and wants you are fulfilling.
#2: Narrow Down Your Target Market
Now that you have a basic understanding of who your products and services are benefiting, you need to refine your target market and be as specific as possible in doing so.
Step 1: Define your target market's demographics. Demographics are a section of a population that include things such as:
- Marital status
- Family status
- Income level
- Education level
Step 2: Figure out the psychographics of the people that will benefit most from using your product. These include:
Once you've identified these things, you should have defined your buyer's persona.
#3: Remain Objective
It can be hard to avoid assumptions, and a lot of people unintentionally end up searching for, interpreting, and recalling information that confirms their pre-existing hypotheses or beliefs. This is known as confirmation bias.
You need to be careful when defining your target market and target audience - don't let bias get in the way, as it can derail you and lead to disaster for your business.
Did you know that over 40% of startup companies fail due to a lack of market need, not funding? These businesses fail because the entrepreneurs behind them are so passionate about whatever product or service they are offering, that they forget to validate whether there is even a true need for it in the marketplace.
Another mistake businesses tend to make is conducting plenty of research, but not actually testing. Sure, tons of people can tell you they would use your product or service, but it doesn't matter unless people actually purchase it.
So, rather than asking people if they like your product or if they would buy it, create a minimum viable product (MVP) and sell it to them right there and then. Testing is the only way to know for sure if there is a real need for your product in the market.
#4: Evaluate Your Markets
Now that you have insight into who you plan on selling your products or services to, you need to make sure that the market is even worth serving. Here are some questions to ask yourself:
- Are there enough people in this target market to sustain my business?
- Does this market segment have enough money to purchase my products or services?
- Is there a lot of competition for this market segment?
- If there isn't a lot of competition, why?
- If there is a lot of competition, what will separate us from them?
- How accessible is the target market?
- Will this market segment buy repeatedly, or will we continuously have to find new customers?
Research can only get you so far. To truly answer these questions, you'll need to conduct real-life tests where you engage with your prospective target market.
If you want your business to have long-term success and growth, you need to define your target markets and target audiences. Take some time to figure out and understand who your business serves and why these people should care. Remember that research can only take you so far and that the only real way to know who you should be targeting is through testing.
Once you've identified your target market, make sure your products or services fit their wants and needs. Next, identify who your target audience is, which will be the specific group of people you plan on marketing to.
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