How to identify a target market and prepare a customer profile

If you run a small business, maybe you have an idea of your target market. However, a vague idea is not enough lớn compete in today’s ruthless business environment. Without detailed knowledge of your target market, you could be losing business khổng lồ your competitors or missing out on opportunities khổng lồ increase sales.

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Just don’t target your customers with a compound hunting bow.

In today’s post, we’re going to lớn look at what target markets are, how lớn identify them, examples of target markets, và how khổng lồ refine and develop target markets by segmentation. There’s a lot of ground to cover, so let’s get started.

What Is a Target Market?

Simply put, a target market is a specific group of people you have decided to lớn target with your products or services. It could be a large market or a nibít market.

Sounds simple enough, right? Well, the concept of target markets can become much more complicated if you offer a hàng hóa or service with wide appeal, or you have a diverse customer base. If you sell khổng lồ “everybody toàn thân,” then how are you supposed khổng lồ define your target market?

The Difference Between a Target Market and a Demographic

Although target market and demographic are closely related terms, they are not interchangeable.

Compared lớn demographics, target markets tover khổng lồ be much broader. This is because, for many businesses, their products or services appeal khổng lồ a wide range of individuals. Target markets can also be affected by considerations such as buying cycles, hàng hóa shelf life and other elements that may not be driven by people who might be interested in buying what you’re selling. In addition, marketers often take the long-term profit potential of a target market inlớn consideration when developing their models và sale strategies, meaning that they have sầu to focus on the bigger picture.

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Demographics, on the other hvà, are subsets of a target market that chia sẻ particular attributes. For example, many television advertisers purposefully target the coveted (và notoriously fickle) 18-35 age demographic. That does not necessarily mean that people who are older than 35 fall outside of the advertiser’s target market – it just means they are part of a different demographic.

In other words, you can think of target markets as a collection of demographics that may be interested in your hàng hóa or service.

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How to Identify a Target Market

So, now we know a little more about what a target market is (& isn’t), how vì you go about identifying one for your business?

Start with Your Existing Customer Base

One of the first steps khổng lồ identifying a target market for your business should be to take a long, hard look at the people who already buy from you. Even if your current customers seem like a diverse bunch, the chances are pretty good that they will chia sẻ at least one or two comtháng characteristics. If they don’t, perhaps a shared interest is the common thread.

Once you begin khổng lồ identify commonalities between your regular customers, you can begin to lớn use this information to lớn refine your existing customer base into lớn a target market.

When researching target markets, it’s vital that you start broad, but become increasingly granular as you progress. For example, you might start by identifying homeowners as a potential demographic, but then drill down deeper and discover that homeowners with older children, earning a certain annual income who work in a particular sector are your best customers. This level of granularity makes it easier to tailor your messaging to lớn appeal lớn these individuals, even if your customer base is actually much broader.

A cảnh báo on Demographic ‘Gray’ Areas

One of the most common mistakes made by businesses of all sizes is a failure khổng lồ recognize that not everyone fits inkhổng lồ neat little demographic boxes.

For example, you can use gender as a starting point when conducting research into your existing customer base. However, gender isn’t always binary & some people, such as transgender individuals, may not be easily categorized inkhổng lồ narrow demographics. It’s important lớn be as inclusionary as possible when looking at potentially sensitive sầu demographics, especially in the imagery & language used in your messaging, otherwise you risk alienating members of your community and prospective sầu customers.

Examples of Target Markets

So, now that we’ve sầu talked about how to lớn begin identifying target markets for your business, let’s take a look at how some brands apply these principles to lớn their marketing campaigns.

In each of these examples, we have sầu lớn rely on a educated guesswork. However, if we examine each brand’s messaging closely, and back this up with some research, we’ll be able khổng lồ infer a great giảm giá about their target markets.

Scotts Miracle-Gro

When it comes to lawn care, few brands are as well-known as Miracle-Gro.

The Miracle-Gro homepage tells us practically everything we need khổng lồ know about Scotts’ target market for this particular product. Note the inclusion of information about Scott’s new line of Sync System power tools.

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Alongside this, you’ll see a banner announcing that Ortho, a manufacturer of lawn care & pest control products, recently became a sponsor of NASCAR championship driver, Greg Biffle.

Finally, you’ll see a slide with a links khổng lồ “Scotts Garage,” a section dedicated khổng lồ content featuring lawn care tips, videos, articles and more.

So, what does all this tell us about Scotts’ target market?

It’s obvious that Scotts’ target market is predominantly male, as evidenced by the messaging, visuals và content available on their site. We can also infer that another demographic within Scotts’ target market is homeowners, as individuals who rent are much less likely khổng lồ be responsible for taking care of their property’s lawn. The NASCAR sponsorship indicates that many men belonging to lớn Scotts’ target market enjoy sports, & are likely lớn use at least some of their disposable income khổng lồ purchase new power tools to keep their lawn tryên ổn.

However, we can use easily obtainable data to learn even more about Scotts’ target market. For example, according to lớn data from Bankrate.com, we know that the average U.S. mortgage is approximately $235,000. Let’s assume that a homeowner has a trang chính of this value, và a 30-year mortgage. Excluding interest, we can determine that the monthly repayment on this mortgage is roughly $1,121, or $13,463 per year. Based on an interest rate of 4.5%, we can then calculate that to lớn qualify for this kind of mortgage, the homeowner would have to earn at least $51,000 per year.

Scotts Miracle-Gro Target Market Profile

So, with a little digging & some basic math, we now know that Scotts’ target market consists of individuals who:

Are maleOwn their own homeEarn at least $50,000 per yearEnjoy sports

Yes, there’s an element of guesswork involved in these assumptions, but this is much more valuable information than “people who want to take care of their lawn,” right?

Lush Cosmetics

Lush Cosmetics’ quality selling proposition is that all of its products are environmentally friendly, & have not been tested on animals. Lush’s range of products is extensive, and if you’ve sầu ever used them (my wife loves Lush, so I can atdemo to their quality), you know how good they are.

At the risk of playing into lớn gender stereotypes, women are more likely khổng lồ spover more on cosmetics and beauty products than men (though the male grooming industry is worth an estimated $6 billion annually). However, take a look at the Lush homepage – there are some very telling signals here.

For starters, look how much screen real estate is dedicated to lớn advancing Lush’s charitable initiatives. This tells us that, as a brvà, social & environmental responsibility is one of Lush’s core values. The homepage even tells us about an entirely new product line centered around the notion of giving bachồng lớn community and conservation projects.

Something else that reveals a great khuyễn mãi giảm giá about Lush và its target market is its products. Many Lush cosmetic products – 81% in fact – are vegan, meaning they are made entirely without the use of any animal byproducts. All Lush products are suitable for use by vegetarians. Lush products are also made by hvà by actual people, not mass-produced in factories, and many adhere khổng lồ fair trade commerce practices and their ingredients are ethically sourced directly from communities, which improves local economies.

Now it’s time to play detective sầu again.

We already know that women are more likely to lớn buy cosmetics products than men. Based on Lush’s commitment to its manufacturing processes, we can assume that many people within Lush’s target market are either vegetarian or vegan. We can also infer that a substantial part of Lush’s target market is under the age of 30, as individuals in this age group are significantly more likely lớn purchase goods from socially responsible brands.

Lush Cosmetics Target Market Profile

So, based on the above sầu research & information, we can guess (with a reasonable amount of accuracy) that Lush’s target market is primarily:

Women30 years old or youngerVegetarian or veganValues socially responsible trade

Again, this doesn’t describe all of Lush’s customers, but as a brvà, it’s clear that these characteristics are shared by many individuals within Lush’s target market.

Refining Market Segmentation

So, if a target market doesn’t encompass all of your prospective customers, what can you do? Segment & refine your target market.

Market segmentation can help you underst& how your products or services appeal lớn individuals across several demographics within your target market.

Market segmentation typically falls into four distinct categories:

GeographicDemographicBehavioral

Let’s take a look at each of these categories in more depth.

Geographic

As its name implies, geographic segments can be used khổng lồ target people living in a specific area. This could be as large as an entire continent, or as regionalized as a specific bus stop.

Geographic segmentation typically includes at least one or two of the following criteria:

ContinentCountryCountry regionCityCities/towns of a specific population densityClimateAreas with specific population thresholdsLocalized areas (neighborhoods, specific retail outlets)

Demographic

Yes, we’ve sầu been talking about demographics throughout this post, but demographic targeting is an important part of market segmentation. Since we already know what a demographic is, let’s look at the most commonly used demographics:

AgeGenderFamily sizeHousehold incomeOccupationLevel of educationReligionRaceNationality

Psychographic

Psychographic segmentation categorizes people by their personality, interests và other factors. This can be a powerful way of kinh doanh the same hàng hóa to people from seemingly radically different demographics, and plays a crucial role in the target marketing of businesses lượt thích Lush.

Psychographic segmentation can focus on:

PersonalityAttitudePersonal valuesLifestyleSocial classAIOs (Activities, Interests, Opinions)

Behavioral

Behavioral segmentation refers to – yep, you guessed it – how people behave sầu. However, this type of segmentation refers specifically to lớn what potential customers expect from a hàng hóa or service, and how their actual experiences influence their behavior.

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Behavioral segmentation includes factors such as:

Benefits soughtBuyer readinessDegree of loyalty khổng lồ a brand/productUser statusOccasions

Hitting the Target (Market)

You thought I was going lớn get through a whole blog post without using a tired target metaphor, didn’t you?

Well, although I can already feel your disappointment, I hope that this information has been useful. Just because your sản phẩm or service appeals to a broad range of people doesn’t mean you can’t learn more about them and market your business more effectively as a result.