How do I find a target market
Market Segmentation And Audience: Everything You Need To Know Now
Who is your target audience? What is market segmentation and why is market segmentation important?
If you don't have exact answers to these questions, you could go to big trouble stuck.
If you even answer them with statements like “we speak to everyone” or “we serve a wide range of people”, you are in even bigger Difficulties!
If you address everyone as a target group, you will ultimately not reach anyone. It is simply impossible to be everything and to address all people equally.
Now you are probably thinking this: “But what about Amazon? Amazon appeals to the whole world as a customer. "
Let's take a closer look at Amazon.
Between 1994 and 1998, Amazon sold for four years just Books. And even during this time, the offer was only available online. Back in 1994, this was still a relatively new niche, with a correspondingly clearly defined target group.
In other words, Amazon had done its homework in terms of market segmentation and served a well-defined and very specific target market.
First after four yearsJeff Bezos began hard work growing Amazon into the successful organization we know today. Today - twenty-four years later - Amazon has earned the ability to really address everyone.
Unfortunately, this does not apply to you (yet).
You are still a little short of the success of Amazon. You're Amazon like it was 24 years ago, and you have to start small - just like Jeff Bezos did.
How exactly can you do that?
In this article, you will learn what market segmentation, identifying your target market and your target audience is all about. We'll also show you how to identify the market segment your company needs to focus on in order to be successful.
Don't wait for someone else to do it. Set yourself up and take the reins in hand.Start for free
Market segmentation: what is a target market?
A target market is a certain, defined segment of consumers that a company wants to serve with its products or services.
Initial market segmentation and identification of the target market is an essential step in developing products, services and the marketing measures used to promote them.
In addition, a target market usually includes the end users of a product or service.
That is why the famous consultant Peter F. Drucker said: "The aim of marketing is to know and understand the customer so well that the product or service suits them and sells itself".
Understanding this is one more crucial Point.
To get noticed, you need to create products, services and marketing campaigns for a specific, well-defined group of people.
Because if you don't, at best it will be bad products or services that don't fully meet the needs and wants of your customers.
However, it is even more likely that no one will buy it.
As marketing author Philip Kotler once said: “There is only one successful strategy. It's about carefully defining the target market and developing a superior offer for this target market. "
Market segmentation can be done for this target market, considering things like geography, demography and psychography.
Market segmentation goals: Example of a target market
McDonald’s is the world's most valuable fast food brand and a fantastic example of demographic driven marketing.
Although McDonald’s is now geared towards several markets and target groups, the company has developed its own products and marketing campaigns for each market segment.
For example, B. one of the company's core target markets is younger children. For this segment, McDonald’s offers playgrounds, happy meals with toys and marketing campaigns with Disney characters and Ronald McDonald.
Targeted marketing and aggressive pricing have helped McDonald’s consistently hold the largest share of the fast food market in the United States.
However, everything is in constant change.
McDonald’s sales have declined in recent years. The group also had to react to changes in its target market.
Let's look at what exactly happened.
In 2016, millennials surpassed the baby boomer generation to become the largest generation in the United States. This avocado-obsessed generation is far more mindful of healthy foods than previous generations.
In response to this change in its target market, McDonald’s has continued to develop its products and services.
Today, McDonald’s offers healthier, fresher menu options and relies more on high-quality coffee products.
Let us come to the next important point of our consideration.
What are target groups?
The term “target group” is more narrowly defined than “target market”. In particular, it refers to the group of consumers targeted by marketing messages.
In this context, advertising specialist Tom Duncan explains: "A target group is a group that has considerable potential to react positively to a brand message."
Target groups in e-commerce may or may not be the end users of a product. In any case, it is the people that you will target your marketing to.
To communicate effectively with the members of your target audience, you first need to understand who they are (socio-demographic) and what their real needs and wants are.
As Robert G. Alen said: “No matter what your product is, in the end you are in education. Your customers must be constantly informed about the many advantages of your range of services, trained in the effective use of your products, and informed about the ever new possibilities for optimizing their lives. "
In this context, I also like to think of a quote from author and marketing guru Orvel Ray Wilson: "Customers buy for their own reasons, not yours."
How do you actually define target groups? To answer this question, let's take another look at the example of McDonald’s.
Example of a target group
Although children are one of McDonald’s most important target markets, there is one major problem with this type of market segmentation: Children have no purchasing power.
In other words: It is not the children who buy McDonald’s products - it is the adults in their lives.
So McDonald’s creates the Happy Meal to serve the target market of children. However, the company designs advertising that advertises the Happy Meal and is aimed at the target group of parents.
This can be clearly seen in the video advertising below.
The advertising highlights things that children are not interested in but that are important to parents: For example, the statement “no artificial colors, flavors or preservatives” and donations for charitable organizations.
What is most important to children?
The toy, of course! But that's only mentioned in passing at the end of the video.
When it comes to happy meals, kids may be McDonald’s target market - but they are clearly not the target audience.
The main differences between target market and target group
Target market and audience are similar, overlapping terms. However, there are important differences between them, largely related to the practical implications for your business.
A target market influences all Decisions a small business has to make.
Products or services are developed to meet the needs and wants of the target market. Packaging and pricing decisions are made to appeal to the target market. And the sales processes are structured according to the purchasing preferences of the target markets.
However, a target audience only influences decisions related to specific marketing messages.
For this reason, the target markets usually consist of the end users of a product or service. This can also apply to the target group, but it does not have to be.
The target market and target group can be identical
Often times, the target audience for a marketing message is the same group that was identified as the target market.
For example, a yoga leggings brand may serve a target market of single women aged 24-34 who regularly attend gyms and have an interest in yoga.
In this example, the target group is the same as the target market.
However, the target group can be further refined. For example, social media marketers can B. decide to reach their target market through Instagram advertising.
In this way, a market segmentation according to target groups can ultimately be carried out and the target market defined more precisely: Instagram users who follow accounts such as Yoga Girl and Yoga Inspiration, who recently bought products online, live in Berlin and are interested in fair trade products.
Now let's look at Why Targeting (that is, targeted marketing) is so critical to success.
The power of targeting
Many people believe that casting a wide net is the best way to catch more fish.
However, the most successful fishermen already know in advance what type of fish they are trying to catch. They make nets that are tailored to that specific fish size. And they know exactly where to find these fish and when to strategically cast their nets to catch them.
Because of this, targeted advertising (with appropriate targeting) is on average almost twice as effective like non-targeted advertising.
The identification of clearly defined target markets and the target group analysis work like a magnifying glass that focuses the sun's rays.
"It's hard to get a message across to a generic 35-year-old working mother of two," says Elizabeth Gardner. “It's a lot easier to get a message across to Jennifer, who has two children under four, works as a paralegal and is always looking for quick but healthy dinners, and who wants to spend more time with her children and less time doing housework . "
With a clearly defined target market, every detail of a product or service can be perfectly tailored to the needs and wishes of the customer. The result is extremely satisfied customers and positive feedback.
In addition, with a clearly defined target group, every detail of a marketing campaign can be perfectly tailored to their interests, emotions and values.
If you know how to create marketing messages that really resonate with your target audience, you will get higher conversion rates and build a stronger brand for yourself.
Because as advertising legend Howard Gossage said: “Nobody reads advertisements. People read what interests them. Sometimes that's an advertisement. "
But that's not all.
Targeting also enables marketers to "harness the massive data stream of the digital age to get better results in digital marketing," said Ray Velez, former CTO of advertising agency Razorfish.
And that amount of data is huge.
You only have to spend five minutes creating a Facebook ad to be amazed by the targeting capabilities of today's digital marketing tools.
So how can you use this power for yourself?
Marketing strategies and market segmentation: this is how you identify your target market
Now that you understand exactly what market segmentation is all about and what target markets and target groups are, let's take a look at how market segmentation for online shops can work out in practice.
Step 1: Identify the main benefit your company offers
If you do this correctly, your ideal target market should reveal itself on its own.
Start with the end result you want: the successful satisfaction of customer needs and wants.
"Authentic marketing is not the art of selling what you do, but of knowing what to do," said marketing master Philip Kotler. "It is the art of identifying and understanding customer needs and creating solutions that bring satisfaction to customers, sales to producers and benefits to stakeholders."
You should be able to answer the following questions clearly:
- What problem are you solving?
- What need are you addressing?
- What wish do you fulfill?
The economist and Harvard professor Theodore Levitt said, “People don't want to buy a quarter-inch drill. You want to buy a quarter-inch hole. "
Describe functions, sell advantages. So don't define what you do or how you do it, such as For example: "We sell home exercise equipment online".
Instead, define what results you will get for your clients, such as: “We help people lose weight and get fit, which will help improve their self-confidence and well-being. We also enable them to do this in the comfort of their own home, where they feel comfortable, with exercise equipment that they can easily buy online. "
A good example of a company selling the benefits of a product instead of the features is the first iPod advertisement.
The main feature of the iPod was that it could store 1GB of MP3 files.
But Apple didn't advertise this feature. Instead, it emphasized the usefulness that this function offers: "1,000 songs in your pocket" (1,000 songs in your pocket).
Once you've clearly identified the benefits, it should be pretty obvious who is most dependent on your product or service.
In the Apple example, the target market obviously includes the early adopters of new technologies who have a large collection of music and enjoy listening to music on the go.
Whose needs or desires do you meet?
Are You Helping Middle Aged Men Lose Weight? Do you help older people with gardening? Are you helping young fathers save time in the kitchen with innovative cooking utensils?
Step 2: Refine Your Target Market
By this point, you should have a basic understanding of who will benefit from your product or service. In the next step, you should further narrow down the market segment you want to address.
Be as specific as possible.
As part of this expanded market segmentation, first define the demographics of your target market.
Demography simply describes a specific population group. When segmenting your market, you can use demographic data such as age, location, gender, marital status, occupation, income level, educational level, etc. as a guide.
Next, you identify the psychographics of the people who will benefit most from your product or service.
Psychography describes the psychological attributes of consumers, such as attitudes, values, interests, lifestyle and behavior.
Once you've done this, you should have a well-defined buyer persona.
Here is an article where you can learn more about creating buyer personas.
Step 3: stay objective
That is perhaps the hardest part of the process.
Avoiding assumptions can be extremely difficult. In addition, many people inadvertently seek and interpret information in a way that confirms their pre-existing beliefs or assumptions. This is also known as confirmation bias or confirmation bias.
In the worst case scenario, this bias can ruin any attempt to clearly define your target market and audience. And that, in turn, would be a real catastrophe for your business.
Unfortunately this happens quite often.
According to CB Insights, 42% of startups fail not because of a lack of funding, but because of a lack of it Market demand.
In other words, they fail because the entrepreneurs behind this startup are so blindly passionate about their product or service that they forget to validate whether there is a real demand for it or not.
The other common mistake companies make is doing a lot of research but not doing actual testing.
The research is perspective. Tests are proof.
It doesn't matter how many people tell you that they would use your product or service. It also doesn't matter how many people say they would buy your product or service.
It just matters how many people are indeed buy your product or service.
So don't ask people if they like your product or if they would buy it. Create a Minimum Viable Product (MVP) and offer it to your interested parties for purchase.
That's the only way to make sure there is a real market need.
Conclusion: One should always initially assume that no target market cares about your company, your brand, your products or your services, unless it is clearly proven otherwise.
Step 4: evaluate your market segments
So now you have real insight into who exactly you want to sell to. In the next step, you should check whether this market is worth serving by you.
Ask yourself these questions:
- Are there enough people in the target market to keep our business going?
- Does this market segment have the money to buy our product or service?
- Will our customers keep buying or do we have to keep winning new customers?
- Is there strong competition for this market segment?
- If not, why is that?
- If so, what makes us different from the competition? Why should customers buy from us?
- How accessible is this target market?
Here, too, research can only help to a limited extent. To finally answer these questions, you need to set up real-world tests in which you actually interact with your future target market.
Market segmentation and audience: summary
Well-founded market segmentation as well as clearly defined target markets and target groups are decisive for the long-term success of any company.
The approach of a large network described at the beginning will only be successful to a very limited extent - and only if you manage to get beyond the starting line.
So try to understand who your company serves and why it should play a role for that audience. Remember, the only real way to find out who to target is through real testing.
Once you have defined your target market, you should make sure that your products or services meet the needs or wants associated with them. Then it's time to target audience definition - the specific group you want to target your marketing message to.
Remember, casting a wide web can be a small business death sentence. So get as specific as possible.
What is the most important benefit your business offers consumers? Let us know in the comments below.
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