Businesses are all about developing a product and service valuable enough to sell in the market. But selling a product or service to anyone and everyone in the market is a waste of resources. Moreover, it will not bring enough leads and would decrease the conversion rate, thus decreasing the overall sales.
Hence, selling the product or service to an ideal customer is essential to streamline your marketing efforts. Moreover, this will help you determine whether the market has enough ideal customers to make your business idea viable and stable for profit.
In simpler words, you need to define your target market before selling your products and services in the market.
Target Market: What does it mean?
A large group of ideal customers who will be willing to buy your product or service is known as your target market. You can have more than one group of ideal customers as your target market. However, one target market segment will dominate and have the largest share of buyers. The dominant target market is the group to where you will direct your marketing efforts and budget.
The target market depends on two things:
- Whether there is a need for your product or service
- Are the ideal customers able and willing to pay for the said product and service
Three Steps to Define Your Target Market
- Basic Segmentation: When defining your target market, you need to segment every consumer into different segments based on certain factors
- Demographics: Age, gender, income, and occupation are critical characteristics to determine your ideal customer. For example, you might provide a service or product that appeals to women with higher incomes who are in their fifties. Or you might provide a product or service that appeals to younger men in their twenties with lower incomes. Demographics allow you to segment your ideal customer and build your target market effectively.
- Geographical Location: Where does your target market live? Where do they work? Where do they like buying groceries or getting critical products and services? All this can help you spot your ideal customer.
- Media: Where does your ideal customer get information on new products and services? Do they use social media? If so, which social media platform do they prefer the most? Do they follow any micro- or macro-influencer? Do they listen to the radio or read the local newspaper? If so, which radio channel or newspaper outlet is heard or sold in most houses? Answering these questions will help you choose the right media to target your potential audience.
- Psychographics: This helps you segment your ideal customers based on their values, interests, and opinions. A group of customers might buy products and services from brands that practice environmental sustainability. However, some might buy products and services from brands that work for social causes. And more such interests and opinions will determine your market segment.
These four types of market segments are usually important for B2C businesses. Such businesses have a large pool of customer bases. Hence these four types of market segments can bring remarkable results.
But if you have a B2B business, you will have a smaller target market as compared to B2C businesses. In fact, some B2B businesses might have a few large companies as their target market. In such a case, they also need to focus on fifth type of market segment, namely the firmographic segment.
- Firmographic Segmentation: This is very much similar to demographics but for B2B businesses. This segment will include determining characteristics such as industrial classification, years in business, legal and ownership status, number of employees, customers, products, location, and market size.
- Competitor Analysis
It is of the utmost importance to keep an eye out for your competitors and their current target market. Not only will it give a basic idea of how your ideal customer should look like, but it will also help you determine a gap in the market.
There might be a chance your competitor doesn’t provide a feature or service in the market, but your ideal customer demands it. You can use this gap to make it a unique selling point for your business. For example, you and your competitor provide meal kits in the market. But your competitor doesn’t offer vegan meal kits. In such a situation, you can provide vegan meal kits to your vegan customers. This will get you a step ahead of your competitor.
- Determine the Benefit of Your Product or Service
More than providing a product or service to your target market, you must focus on determining the benefits of the said product and service. Most people buy a product or service because it helps them solve a problem or issue and benefits them in terms of saving money, time and effort.
For example, if you run a house cleaning service, you can provide your customers with a spotlessly clean house. But the benefits you provide are immense. You provide your customers the benefit of saving money and time, peace of mind, and reducing stress.
Knowing the benefits of your product or service will help you highlight them in your marketing efforts.
Wrapping it Up
To effectively sell your product and services and to streamline your marketing efforts, defining your target market is critical.
If you want to learn the basics of defining your target market, performing market research, and boosting your sales, get in touch with us at Keystone Executive Coaching. We offer training courses to entrepreneurs of different industrial sectors, helping them learn and implement strategies for critical business functions. We can guide you in marketing, human resources, finances, sales, and more.
Contact us now to learn about our business coaches and training courses.