How to identify your target market as a marketer

Let me begin by saying this: if you wish to be successful in business, you must know who you are selling to. You must understand that you cannot sell to everyone, nor should you want to. When you try to tailor your services or products to everyone, you end up selling to no one.

So, one of the first things you do in business as a good entrepreneur and great marketer is understand your target market. This is paramount to the success of any offering you intend to promote.

Your target market is a specific group of potential customers most likely to be interested in and purchase your offerings. It is to these people that you laser focus your marketing efforts- from start to finish.

In identifying your target market, you achieve a solid product-market fit, helping you strategically convert the most of your market (and increase your market share).

Well, you can’t try to sell your stuff to the entire market in which you operate. Imagine if Apple tried to sell their Mac laptops to every person, no matter the age, the income bracket, the location, the personal values.

There’s a reason Apple focuses on a specific market of customers for each of their products. Can you guess which audience they target their Macbook Pro to and why? 

The U.S. Bureau of Labor Statistics reported that approximately 20% of new businesses fail during the first two years, 45% during the first five years, and 65% during the first 10 years. Only 1 in 4 new businesses make it to 15 years or more. The top reasons for business failure included not investigating the market, business plan problems, too little financing, bad location, internet presence, and expanding too fast.

Identifying your target market isn’t just a luxury—it’s a necessity for business success. Do not make the mistake of green or egotistical founders, who think they can get away without proper customer research. Warning: these types of businesses lose money quickly and unnecessarily, eventually leading to failure.

Even if business owners believe they have a clear understanding of their ideal customers, they should still conduct this research. Upon investigating their actual audience, dangerous biases are often revealed- which, left unchecked, would have caused significant harm to the company from the resulting poor decision-making.

Through systematic market research and segmentation, businesses uncover these blind spots and gain an accurate understanding of their audience. This process helps avoid the common pitfall of trying to appeal to everyone, focusing instead on the individuals most likely to convert. This, in turn, helps businesses allocate resources more efficiently.

By honing in on a specific group of people most likely to find value in their business, entrepreneurs tailor their efforts at every touchpoint to better meet customer needs. Naturally, this drives customer satisfaction and loyalty, ultimately achieving long-term growth. 

In short, identifying your target market helps businesses in boosting conversions. 

Benefits of Identifying a Target Market

Knowing your target market is an important, core ingredient to business strategy, marketing strategy and overall business success. In short, the most immediate impact is informed decision-making because you now have the required insights to effectively manage and grow your business. You now know who you’re talking to, so you can:

• tailor your messaging for them by using their language
• create images and visual assets that attract them
• meet them on their own playing field (i.e. the physical and digital channels they most engage with)

All these things mean you attract qualified prospects, convert those prospects and achieve business success much more efficiently than you would otherwise (if at all).

Here’s a more detailed picture showing how having a good, accurate idea of who you’re marketing your business’s offerings to drives business success: 

• Customer-Centric Approach
  • Since you’d know what drives customer purchases, you will create marketing campaigns that connect, resonate and convert with your audience. Result? Sales boosts and loyalty. 
• Effective Marketing Strategies
  • You are better equipped to develop tailored marketing strategies with messages that resonate with your audience, leading to more effective campaigns. 
• Focused Resource Allocation
  • You now know which channels to invest capital and time into so that you acquire the the highest possible conversions.

The Business Case For Accurately Identifying Your Target Market

Increased Sales and Affordability

An accurate understanding of your customers means you’re able to market to the right group of people: those willing to pay for your offerings. Consequence? More sales and a more cost-effective marketing approach.

Improved Customer Acquisition and Retention

An improved customer acquisition processes by focusing on those most likely to buy your products or services.

Increased Marketing Effectiveness

Your marketing plan is now focused on targeting specific customer segments, leading to increased engagement and conversion rates.

Competitive Advantage

The data acquired effectively informs product development and improvement strategies. You’re better equipped to tackle specific customer needs, refining your offerings and boosting loyalty. 

Understanding the specific needs of your target audience allows you to develop products and services that cater to their requirements, ultimately enhancing customer satisfaction, loyalty and conversions.

The Risks of Failing to Accurately Identify Your Target Market

Wasted Resources

Without a clear target market, businesses may invest resources in marketing efforts that do not effectively reach potential customers. Result? Wasted time and money. Not the best outcome for small business owners who’s resources are often already constrained. 

Missed Opportunities

Not targeting a specific market means you’re more likely to miss opportunities to connect with the right audience for your business. That means you’ve lost the chance to capitalize on potential sales (and long-term relationships (aka returning business)).

Negative Brand Perceptions

No target market = poor brand focus, brand relevance. Result? Poor brand perception in the consumer eye. 

Difficulty Competing

Without a target market to focus your attention to, you’d struggle to effectively compete in your industry. After all, you don’t know how to accurately tackle their needs. Any marketing efforts you make will go over the consumer’s head- if it even reaches them at all. That’s because you lack a distinct understanding of your customer base and how to differentiate yourself from competitors. 

Risk Management Challenges

By targeting the wrong market, you’ll struggle to adapt and thrive in your industry. That’s because you’re more exposed to risks such as low demand, high competition, legal barriers, or environmental changes. 

Now that you understand why it’s so important, let’s dive into one of the founding pillars of marketing strategy.

To identify your target market, you need to know who they are. To know who they are, you need to know what’s currently running in your market. That means you need to conduct thorough market research. If you sell sports shoes, you need to look at what existing sports footwear exists; who sells them, who’s buying them, and where the market gaps are. Then you need to look at your own offering and determine which of the existing buyers in that market would be most interested in your shoes. 

Make sure you have a valid Unique Selling Proposition or Value Proposition: the differentiating factor between you and competitors in the industry. These are the feature(s) you have that make you more appealing to your target audience (usually that’s because you’re effectively tackling a pain point and solving a problem for the customer).

Using Demographics

To define a target market, we generally start with demographics. When you research your market, you’ll identify basic identity information such as age, gender, and occupation. This often includes:

• income brackets,
• education,
• household size, family structure,
• language(s) spoken,
• ethnicity, health status and religion (if relevant to your business).

By leveraging demographic data, you can accurately identify the characteristics of your potential customers and tailor your marketing efforts to address their unique needs.

Examples of Target Market Definitions  

For instance, a b2b company specializing in software solutions may identify small to medium-sized businesses as its target market. Meanwhile, an innovative fitness company may target tech-savvy millenials. On the other hand, a luxury fashion brand may define its target market as affluent individuals with a high income level. Below are more detailed descriptions of target markets for each example.

Example Company 1: Accounting Services | Target Market: Small Business Owners

Consider you’re launching a cloud-based accounting software solution. Your target market could be small business owners and entrepreneurs who require efficient financial management tools to streamline their operations and drive growth. These individuals may prioritize affordability, user-friendly interfaces, and scalability in their software choices. By offering customizable subscription plans, intuitive dashboards, and seamless integrations with popular business platforms, you can address the specific needs and pain points of small business owners, positioning your software as a valuable asset for their success.

Example Company 2: Smart Fitness Devices | Target Market: Tech-Savvy Millennials

Imagine you’re launching a new line of smart wearable fitness devices. Your target market could be tech-savvy millennials aged 25-35, who are health-conscious and embrace technology to enhance their fitness routines. These individuals likely prioritize convenience, connectivity, and data tracking in their workout regimens. 

Example Company 3: Boutique Travel Agency | Target Market: Luxury Travel Enthusiasts

Suppose you’re starting a boutique travel agency specializing in luxury vacations. Your target market might consist of high-income professionals aged 35-55, who value personalized experiences, exclusivity, and luxury amenities in their travel adventures. These discerning travelers seek unique destinations, VIP treatment, and bespoke itineraries that cater to their refined tastes and preferences. By crafting tailored travel packages and cultivating partnerships with luxury resorts and concierge services, you can attract this affluent clientele and create memorable experiences that exceed their expectations.

These examples showcase how each business can have a different target demographic based on their products or services.

Diving Deeper: Customer Personas

Identifying the target market doesn’t end with just surface level data such as demographics and immediate preferences. That’s what old marketing used to be. Now, with an endless ocean of information available to customers combined with choice overload, you need to get a lot more specific about your target market. Your understanding of target markets relevant to your business is what makes the difference in being able to market effectively. That’s because you can effectively pinpoint the perfect product-market fit for your business, allowing you to successfully reach your target audience and convert them.

That’s when you delve into customer personas.

Creating a Target Customer Profile

A good product-market fit is when your business’s offering effectively targets a customer’s need. 

Developing a detailed buyer persona helps in crafting a strategy to appeal to your customer base. It provides a comprehensive understanding of your perfect audience. 

Below is a comprehensive and effective guide to creating customer personas that properly aid in developing a successful marketing strategy: 

Demographic Information	Age, Gender, Income level, Education level, Occupation, Marital status, Family size and structure, Ethnicity/Race
Geographic Information	Location (country, region, city), Urban vs. Rural, Climate considerations (if applicable)
Psychographic Information	Personality traits, Values and beliefs, Lifestyle choices, Hobbies and interests, Attitudes towards products/services
Behavioral Information	Buying habits, Spending patterns, Brand loyalty, Product usage frequency, Media consumption habits (TV, social media, etc.)
Technographic Information (if relevant)	Technology adoption level, Device preferences (mobile, desktop, tablet), Social media usage and preferences
Challenges and Pain Points	Problems or issues they face in their daily lives, Needs that are not currently met by existing solutions, Frustrations with current products/services
Goals and Aspirations	Short-term and long-term goals, Desires and aspirations, What they hope to achieve personally or professionally
Purchase Motivations	Reasons behind their purchasing decisions, Emotional triggers that influence buying behavior, Benefits sought from products/services
Influences and Decision-Making Factors	Sources of information they trust (friends, family, online reviews, influencers), Decision-making process (who is involved, what factors are considered)
Communication Preferences	Preferred communication channels (email, social media, phone), Frequency of communication, Preferred tone and style of messaging
Past Interactions and Feedback	Previous interactions with your brand (if applicable), Feedback or reviews they have provided, Areas of satisfaction and dissatisfaction
Customer Journey Insights	Touchpoints they encounter during the buying process, Pain points or friction encountered at each stage, Opportunities for improving the customer experience

Steps To Create A Well Defined Target Market

1. Define Your Ideal Customer Profile.
   1. Develop a detailed profile of the customer who aligns best with your product or service based on the insights gained from competitor analysis and market research.
2. Evaluate Customer Needs and Desires.
   1. Identify the specific needs, desires, and pain points of potential customers to understand how your offering can effectively address their requirements. This involves understanding the customer experience (Petrovski & Kano, 2017). 
3. Segment Your Market.
   1. Divide the market into distinct segments based on demographics, psychographics, behaviors, and preferences to pinpoint the group that resonates most with your product or service. 
   2. This step will help you highlight different benefits your business offers the customer profile, allowing for better conversions in all your marketing messages, especially in emails. 
4. Assess Market Demand & Ensure Market Viability.
   1. Confirm for a product-market fit.
   2. Analyze trends, consumer behavior, and purchasing patterns in this market to confirm demand.
   3. Hootsuite recommend that you confirm that there are enough potential customers in your target market to sustain your business and drive sales growth.
   4. Even if an existing market is small, check if there is an upward trend for it (with various research tools for a well-informed analysis), which suggests that there is room for market growth and an increase in your business’s share. 
5. Align Their Values With Yours.
   1. Choose a target market whose values align with your business values to establish a strong connection with customers and build long-lasting relationships.
   2. If it’s relevant to your business, make sure you check political, education and family values as well. 

By following these steps and considering the insights gained from competitor analysis and market research, you can effectively choose your target customer segment to focus your marketing efforts and tailor your offerings to meet their specific needs and preferences.

That way you can target consumers more effectively, which in turn drives conversions. 

Market segmentation is the process of dividing your target market into smaller and distinct market segments based on specific criteria from the customer persona.

Often, you’ll note that the target market is broad, especially with a substantially sized market. So, you’ll stumble across the need divide your market into smaller groups, often based on your range of offerings. 

8 Examples of Successful Target Market Segmentation

5 Small, Independent Businesses That Successfully Identified a Target Market

1. TOMS Shoes: TOMS revolutionized the shoe industry with its “One for One” business model, where for every pair of shoes purchased, another pair is donated to a child in need. By targeting socially conscious consumers who value philanthropy, TOMS created a loyal customer base and grew rapidly.
2. Warby Parker: Warby Parker disrupted the eyewear industry by offering high-quality, stylish glasses at affordable prices, directly to consumers online. By targeting millennials who were seeking fashionable yet affordable eyewear options, Warby Parker quickly gained traction and became a household name.
3. Dollar Shave Club: Dollar Shave Club identified a gap in the market for affordable yet high-quality shaving products. By targeting men who were frustrated with the high cost of razor blades from traditional brands, Dollar Shave Club offered a subscription-based model that provided convenience and value, ultimately challenging industry giants.
4. Etsy: Etsy provided a platform for independent artisans and crafters to sell their handmade and vintage goods online. By targeting consumers who value unique and personalized products, Etsy built a community-driven marketplace that appealed to both sellers and buyers looking for one-of-a-kind items.
5. Patagonia: Patagonia positioned itself as a leader in sustainable outdoor apparel and gear. By targeting environmentally conscious outdoor enthusiasts, Patagonia not only attracted customers who shared its values but also differentiated itself from competitors by prioritizing ethical and eco-friendly practices in its manufacturing processes.

3 Large Companies That Successfully Identified a Target Market

If you’re looking for bigger companies that successfully identified their target markets, take a look at Apple, Nike and Chobani below:

Apple

Apple revolutionized the technology industry by targeting creative professionals, students, and early adopters who sought user-friendly, innovative, and aesthetically pleasing products. Through its sleek design, intuitive interface, and focus on creativity, Apple differentiated itself from competitors. For example, Apple’s MacBook Pro targets professionals, creatives, and power users who demand high performance and reliability in their computing devices. With its powerful hardware, sleek design, and advanced features such as Retina display and Touch Bar, the Pro caters to individuals in fields such as graphic design, video editing, programming, and music production. By consistently delivering products that catered to the needs and aspirations of its target market, Apple cultivated a fiercely loyal customer base and became synonymous with cutting-edge technology and design.

Nike

Nike identified its target market as athletes and sports enthusiasts who were passionate about performance and style. Through strategic marketing campaigns and partnerships with top athletes, Nike positioned itself as a brand that empowers individuals to push their limits and achieve greatness. For example, the “Just Do It” campaign, launched in 1988, resonated with consumers by promoting a mindset of determination and perseverance. Nike’s collaboration with basketball legend Michael Jordan led to the creation of the iconic Air Jordan line, which became immensely popular among basketball fans and sneaker collectors alike. By consistently delivering high-quality athletic apparel and footwear that combined cutting-edge technology with fashion-forward design, Nike solidified its position as a market leader in the sports industry.

Chobani

Chobani identified health-conscious consumers who valued natural ingredients and Greek yogurt’s nutritional benefits as its target market. By offering a product that was higher in protein and lower in sugar compared to traditional yogurt, Chobani appealed to individuals seeking healthier snack options. Additionally, Chobani differentiated itself by emphasizing its use of only natural ingredients and avoiding artificial additives. For example, the brand’s “Real Love Stories” campaign highlighted the authenticity and craftsmanship behind each cup of yogurt, resonating with consumers who prioritized transparency and quality in their food choices. Through innovative flavor offerings and packaging designs that catered to on-the-go lifestyles, Chobani successfully captured market share and became a dominant player in the yogurt industry.

Market Segmentation Techniques

The process of creating market segments involves utilising various techniques. Marketers use these to refine their strategies and improve conversions, especially when engaging with niche markets. In turn, it informs the creation of different marketing campaigns per segment, which helps the overall conversion rate of a business.

Below are three techniques used by marketers to divide their target market and audience into specialised groups. 

Psychographic Segmentation

• Divide the market based on psychological traits, attitudes, lifestyles, values, interests, and behavior of consumers.
• Focuses on understanding the mindset and motivations of different consumer segments, allowing businesses to tailor their marketing strategies accordingly. 
• Helps your identify your target market’s inner workings and how to influence them
• For example, a luxury watch brand may segment its market based on consumers’ aspirations for status, prestige, and luxury experiences. By targeting affluent individuals who value exclusivity and sophistication, the brand can develop personalized marketing campaigns that appeal to their desire for luxury goods and lifestyle aspirations.

Demographic Segmentation

• Divide the market based on demographic variables such as age, gender, income, education, occupation, marital status, and family size.
• Focuses on understanding the basic characteristics and traits of different consumer segments, allowing businesses to identify patterns and preferences associated with specific demographic groups. 
• Helps you identify the social trends relevant to certain groups. 
• For example, a children’s toy company may segment its market based on age demographics, offering age-appropriate toys and games tailored to the developmental stages and interests of children. By targeting different age groups, the company can create products and marketing messages that resonate with the unique needs and preferences of each demographic segment.

Geographic Segmentation

• Divide the market based on geographic variables such as location, region, climate, population density, urban or rural areas, and cultural factors. 
• Focuses on understanding the geographic differences and preferences of consumers, allowing businesses to tailor their marketing strategies to specific geographic regions or locations. 
• Helps you narrow down regional trends to look out for in your marketing strategy and offer more personalized offerings. 
• For example, a beverage company may segment its market based on climate differences, offering hot beverages such as coffee and tea in colder regions and cold beverages such as iced tea and lemonade in warmer regions. By targeting consumers based on their geographic location and climate preferences, the company can better meet the needs and preferences of different regional markets.

Implementing target market strategies involves several steps to ensure that your marketing efforts are effectively reaching and engaging with your identified target market segment. Here’s a structured approach to applying them in your business’s digital marketing and general marketing strategy.

Segment Your Audience 

As described, divide your target market into smaller segments based on shared characteristics or needs. These different market groups ensure every marketing message you send out that promotes your brand or offerings resonates with the group of customers it’s aimed at. 

Develop Relevant Marketing Campaigns Per Segment 

Build tailored marketing campaigns that speak directly to their interests and preferences.

Use of Customer-Favoured Marketing Channels 

Use their favoured online (specific social media platforms, email marketing, video content, etc.) and offline (billboards, direct mail, etc.) channels to meet your audience in their home court.

Messaging & Language Choices 

While you want to keep things on brand, ensure your marketing campaigns use the language your audience resonates with most based on their customer profile. Resonate with their needs, desires, and pain points as you communicate your value proposition. This enables clear and convincing marketing efforts. 

Utilizing Focus Groups to Understand Your Target Market

Conducting focus groups provides valuable insights into the preferences and perceptions of your target market. By gathering feedback directly from potential customers, you can refine your offerings and tailor your messaging to better align with the expectations of your audience.

Target Market Precision Drives Marketing Efficiency

Finding a target market with a good product-market fit for your business helps inform successful marketing strategy. It allows for more efficient resource allocation and focused marketing efforts that drive conversions and, in turn, sales and profitability. 

Customer-Centric Approach Enhances Brand Loyalty

By identifying different target markets and segments relevant to them, and appropriately addressing their unique needs and preferences, companies create meaningful experiences. This consumer-centric approach improved the customer journey at each touchpoint, driving customer satisfaction and encouraging repeat business with a business’s ideal target market. 

Mitigating Risks Through Target Market Identification

When a business fails to accurately identify and target a specific market, they unnecessarily waste resources, miss profitable opportunities, and induce a negative brand perception. It’s like shooting themselves in the foot multiple times due to the never-ending repercussions. So, businesses can mitigate these risks with thorough market research and segmentation, positioning themselves for success.