How do you know if your product or service is a good fit for your customers? It’s an important question that you can answer easily by understanding how to identify your target market, so you can reach them with the right product at the right time and place.
Before you identify your target market, it’s important to have a clear understanding of what a target market is. It’s defined as a specific subset of consumers that would be a good fit for your product or service. In other words, your target market is the group of people that is most likely to buy from your business.
Targeting or marketing your product to everyone can be time consuming and cost draining—especially if there’s no guarantee it will work. But what you can do is establish a target market by homing in on a specific group of consumers with similar characteristics. Choosing a specific target market allows you to aim your products or services at customers who would likely purchase from you, taking your organization down a successful path.
Confused on the difference between target market and target audience? You’re not alone. It’s common for these two terms to be used interchangeably, but they have different meanings. Target market and target audience are similar. They're both groups of people with similar characteristics. However, your target market is a broader group of people or consumers, while your target audience is a subgroup of that target market.
A target audience is also used frequently to describe the recipients of ad or marketing campaigns. For example, when running an ad campaign, it’s key to decide which group of people should be seeing your ad. The target audience is really important to a successful campaign.
Want to know how your ad creative will perform against your target audience? Use SurveyMonkey Ad Creative Analysis to measure the effectiveness of your ads before you go to market.
Now that you understand what a target market is, you can take the necessary steps to identify your target market. Let’s use a hypothetical example to make it easy. Assume your business sells shoes that are great for trail running. Who would most likely purchase these shoes? How can you be certain you can reach these consumers? Let’s find out:
Start by performing a target market analysis, which is just analyzing your product or service while taking a deeper look at your customers. This will help you better understand your customers’ wants and needs. More importantly, this will help you articulate how to target your product specifically to people who would actually make a purchase. Going back to our example of your shoe company, start by answering the following questions:
By gathering the information we know about our shoe company and analyzing the results of our market research survey, we’re able to fill in some of those blanks.
Here’s another hypothetical of what we know about our shoes:
Here’s what we’ve discovered about our customers:
Gain transparency in the industry by knowing who you’re up against with a competitor analysis. Knowing your competitors can help you get ahead by identifying potential target marketing gaps. Furthermore, you’ll gain more insight into pricing, trends, forecasting, and how to improve customer targeting.
More specifically, a competitor analysis can help you determine:
Let’s use our sneaker example again:
By performing online research and sending market research surveys, we learned that we have two main competitors who sell similar shoes. One competitor appears to be targeting and using language on their website (including images) that aim to reach consumers in the 50+ age range. The other competitor targets consumers under the age of 30.
We also know that both competitors sell hiking and trail running shoes with features that utilize waterproof material. Competitor A claims to use an updated, new technology that allows for optimal comfort during long runs. Competitor B focuses more on style and new, up-to-date designs with neon colors and shoelace options.
This information helps us conclude that we could gain a competitive edge by targeting consumers ranging from 30-50 years old. Additionally, our marketing should focus on comfort and sole technology for runners who enjoy short or long runs.
Also, we now know that waterproofing isn’t a priority for this group. Therefore, we don’t have to promote running in the rain as part of our market strategy. We can also let our customers know that we offer a free shoe consultation for coming into the store.
Now that we understand our competition, we have concluded our competitive research and we can move on to the next step.
The third step is completing the actual market research. This step includes segmenting your customers in order to start building specific buyer personas—analyzing their challenges, needs, and overall characteristics.
Market segmentation involves bucketing existing and prospective customers into segmentation types that include a shared commonality.
Segmentation types and examples of each segment include:
Remember our shoe example? By compiling competitive research with our product analysis, we can conclude that our customers can be segmented into the following buckets for our trail running shoe:
Now that we have combined all of our research and understand each segment, we can begin our target market analysis for our trail running shoes.
Target market analysis decides how your product fits into the real life marketplace. It’s a key component for recognizing the necessities your customers desire.
Industry markets are constantly changing based on consumer needs. With target market analysis, you have the ability to stay ahead of these changes and the competition.
In order to accurately perform target market analysis, an unbiased audience and watchful analysis is key. By conducting a survey and looking at the results with a close eye, you will be able to see how customers behave and what is important to them. Eventually, this leads to a marketing plan that will show how your products or services fit into the marketplace.
When you complete target market analysis, you’ll be able to gain the following benefits:
Let’s revisit our shoe example:
Our shoe business would benefit from target market analysis by being able to decide the best location for future stores, an ideal price for the sneakers, and design advertisements that would catch our consumer’s eye.
Based on our research, we know that placing or targeting stores in Portland, San Francisco, and San Diego would help draw our consumers considering they are based in these areas and would prefer to purchase in the store. We can assume, based on competitive analysis and our consumers’ income, that a price point between $75-110 is what our customers would expect to pay.
However, a more thorough analysis can be completed with a target market survey that would help narrow down the price point and how and what to place in our advertisements.
Creating and launching a target market survey is a quick and easy way to get to know your target market. You can gather more details about your prospective target market which will further define your strategic efforts.
A survey that includes the right questions in the right order can make all the difference in conducting accurate target market analysis. Begin your target market survey by including the following:
Now that we understand how to complete a target market survey, we can begin to use the target market information to build our marketing strategy for our trail running shoes.
Once you’ve identified your target market, you can create marketing campaigns for that specific group. By combining what you have learned during the segmentation exercise and how to stand out from the competition, your marketing efforts can be fine tuned to cater and grab the attention of your targeted consumers.
In summary, for our trail running shoes, we know that our target market:
Now that we know who our target market is, we can work on catering our products to these specific customers and beat the competition!
Aside from benefiting from target marketing, there are many takeaways and advantages. Two specific advantages include getting ahead of the competition and gaining customer loyalty.
Since part of target market analysis is researching your competitors, you can take advantage of various ways to market your product that your competition hasn’t tapped because their product or service doesn’t have the features that your business can provide.
The more you know your customers, the more likely they will want to get to know you. Target marketing and its outcome of a specific customer base is like a friendship. By specifically addressing customer needs, customers will be more inclined to be loyal to your business and products. They will likely feel like they are a part of your business and will refer others as well.
Here are a few specific examples of target marketing and how it can be used effectively:
Our shoe company is a great example of how target marketing was used effectively. By performing market research, sending proper surveys to prospective customers, and analyzing the competition, this company will be able to see exactly what their customers want. Also, the business can look at how they can differentiate themselves from the competition and use that in their messaging strategy to drive their target market into their stores.
SurveyMonkey customer, Elevate My Brand, is a woman-led, award-winning digital marketing agency that performs market research on a regular basis. They often need to create a client’s brand from start to finish. This requires target marketing analysis. Elevate My Brand goes directly to their client’s prospective customer base and gains feedback that eventually launches new, targeted campaigns. Once the analysis is complete, the agency collaborates with their clients—on the development of the surveys and the outcome. They can form an analysis and build a targeted brand strategy from the research that has been conducted.
This is a unique example in that the products this company sells are only relevant to a select audience. When a company offers products or services to a niche audience—like people that are gluten-intolerant—then they need to have a good understanding of their target markets. This target marketing strategy might mean selling gluten-free products in specialty stores, offering different promotions, or even communicating ingredients on packaging, much differently than other food products.
Finding your target market is key to finding how your product or service will benefit your customers and, more importantly, whether or not they will purchase your product. Learning more about your target market requires analyzing your product, customers, and competition while also performing market segmentation. Doing this will help your business cater to your customers—not to mention, build loyalty and success.
Read more about how to identify and reach your target market with surveys by asking screening questions to estimate your sample size.