Dennis Hung, Negosentro | So, a lot of hours have gone into designing or selecting a product or service that is definitely going to be a hit in the market. However, just before you present your product to the market, there is one more crucial step: identifying the target market.
Target market analysis helps to narrow the business’ focus to who the potential customers are and how and when to market the product to this particular segment of the market. By identifying the target market, you are able to put systems in place that will help to increase sales, as opposed to simply marketing the product indiscriminately.
This article will identify and discuss three key steps in the process of target market analysis:
- Evaluate Your Product / Service:
Critically examine the product or service that you’re offering in terms of its key features and the value it adds. This will help you determine who specifically would find these features and benefits useful. Next, you will analyze how much your product costs and who this would be affordable to. This will be your potential market.
This information will help you in the following ways:
- To determine the most suitable marketing methods for your product or service. Depending on the specific characteristics of the market segment, you could use email marketing strategies, social media marketing or TV and radio, among others.
- To determine whether the targeted segment is large enough to meet your targeted profits.
- To determine whether the product or service is really going to be valuable to the niche market.
- To determine whether you will need to alter or redesign the product or service to increase its appeal and effectiveness.
- Narrow In On Your Target Market
In order to create an effective sales and marketing strategy, you will need a deeper understanding of your target market. By doing this, you will be able to allocate adequate resources to your marketing efforts and increase sales faster.
You can analyze your target market on the basis of:
- Geographic location – What is the location and size of the market where you intend to sell your products? How is the climate? How developed is it infrastructurally?
- Behavioral Traits – Conduct an analysis on the features and benefits that the customers require from the product/service, how often they shop for the product, their readiness to buy and how do they pay for the product.
- Psychographic Attributes – Here, you will zero in on the personality, character, social status and lifestyle of your chosen market segment. This will help you develop an effective marketing plan.
- Demographic Traits – This is concerned with the age, gender, education level, income, religion and occupation of the potential customers.
- Study Your Competition
The second step will be to take a closer look at the businesses which you will compete with, in regards to; who their customers are, what their customers purchase the most from them, their pricing and the feedback their customers are giving about them on social media.
This analysis should help you identify potential gaps in your target market. You can then position your business strategy on your competitors’ weaknesses. For example, you may decide to offer a flexible payment plan if your competitors aren’t.
On the other hand, if your target market is completely satisfied with the existing product or services, you may want to pursue a different market segment.
In today’s competitive business environment, it would be imprudent to market your product or service without identifying your niche market. Shoppers have a wider array of options to choose from, therefore you cannot risk using a bland one-method-fits-all marketing strategy to reach them. You must make the effort to understand their needs, wants and behavior; and in turn, you have increased sales and satisfied customers.