Target Market Review - Part 2

In our last blog we discussed the importance of clearly defining your target markert.  This blog will cover how to determine your target market.

To start, first determine why someone would buy your product or service. Why did you create the product or service you did? Once you know this, there are three categories you need to look at: the geographic, demographic and psychographic profile of your target market. Let's look at each one of these separately.

The geographic profile is more easily determined. Where do your current customers live and how far are they willing to travel to buy your product or service? Are there any climate considerations for your product? What cities, regions, states and/or countries will your target market be in? If you are in a regulated industry, where is your company licensed to do business? Bottom line, where is the best place to spend your marketing dollars to attract your primary market customers?  For some businesses, with new technology, internet and phone, geography does not have the boundaries it used to have.

Next, let's look at the demographic profile. Things to consider here are different depending on if you are business-to-business (B2B) or business-to-consumer (B2C).

If you are a B2C, age, gender, education, income, marital status, ethnic or religious background and family lifecycle (newly married, with or without children, expecting, married 10-20 years, etc.) of your target market may all come into play.  For example a local residential house cleaning business would most likely be looking for home owners with a higher household income where husband and wife work full time, are college educated and have children.

If you are B2B the following considerations should be thought about — company size, whether it is an established or start-up business, is your target market B2B or B2C, how many employees does it have, do they sell a specific product or service, where is your own expertise and what companies could you best serve with that expertise?  For example, a freelance graphic designer who was employed most of their career in the retail environment would most likely target a B2C company who does not have a graphic designer on staff, perhaps has no marketing department, up to 100 employees and does advertising in print media.

Finally, let's look at the psychographic profile of a customer. Understanding this is most interesting. What things are important to your customer? What are their hobbies and interests, are they active, are they status seekers, what is their lifestyle, are they conservative or liberal, are they sports enthusiasts, are they environmentally conscious, socially responsible, trendy, fashion conscious, fun seeking, family oriented, thrill seekers, the list goes on.  For example, a high-end maternity shop would be looking for fashion conscious, trendy women, who want to look good while they are pregnant and don't mind spending money doing so. They still want to be comfortable and are possibly status seekers.

If your target market is other businesses, do they know they need your help, are they open to help, what is their business style, are they innovative, are they conservative, do they belong to trade associations, what is their management style, what other outside services may they use to run their company?
For example, a consultant may be looking for a business owners who know they need help and are willing to pay for good help that will get them results. There target market is willing to learn, has a complimentary management and business style to the consultant.

Now that you have a clear picture painted of who your target market is, you can now analyze your competition.  Our next blog will cover competition analysis.

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