Finding a target market is a critical step for all organizations to take.
Locating the proper target market greatly increases the likelihood of long-term success and frequent customers. Once a target market is established, organizations can then cater to this group with tailored marketing strategies, offerings, and so on.
To properly identify a target market, market research is essential. This becomes even more important as a business grows and further develops its offerings.
In this post, we’ll discuss how to determine your target market, the major benefits, and the research methods used.
Establishing a Target Market
A target market refers to consumers that are most likely to buy or engage with your products and services.
By defining a target market, organizations can operate more effectively and develop better offerings. Below, we’ll review some key starting points when it comes to establishing a target market.
Understanding the Basics
At a minimum, organizations will informally have an idea of what their target market looks like.
This is based on an initial business plan, preliminary research, and/or interactions with existing customers. Initial definitions for a target market often start broad and focus on basic demographics shared by a customer base.
For example, a business might recognize its product is most suited for males aged 21 to 39, and then use that knowledge to develop offerings and marketing messages tailored to this audience.
However, as businesses grow and develop their offerings, their approach to identifying a target market must become more sophisticated.
Importance of Customer Insights
Looking beyond basic demographics, businesses will also want to understand more about what drives their customers, what they prefer, and common pain points. This is where conducting market research becomes even more important.
Research studies can provide businesses with a better understanding of their target market.
This includes:
- Focus groups
- In-depth interviews
- Online surveys
The insights from this type of research pay dividends when it comes to strategic planning, product development, and developing effective communication strategies.
Key Benefits of Identifying the Target Market
Correctly identifying the target market leads to enhanced products, better communication strategies, and provides a competitive edge for a brand.
Improved Product and Service Development
Conducting research with a target market is the first step to understanding customer needs and preferences when it comes to what a business offers.
Obtaining these insights allows an organization to develop products that are much more appealing to its target market. This ensures that the products will resonate with consumers, which can lead to increased sales and loyalty rates.
Enhanced Communication and Marketing Efforts
The more you know about your target market, the better you can communicate with them.
In addition to knowing what demographics to target in your marketing, research insights will allow you to understand what words and messages resonate most and where consumers are most likely to see your messages.
By focusing on consumers most likely to purchase your products and tailoring messages to the target market, marketing initiatives will have a much higher return on investment (ROI).
Gaining a Competitive Advantage
Targeting a more defined market allows your business to better differentiate itself from competitors (who may be targeting a much more general audience).
Identifying your target market ultimately allows you to stand out from the competition by attracting customers based on their specific needs.
By continuously positioning your brand as one that adapts to evolving customer needs, you become a top competitor in the industry.
Research Methods to Determine Target Market
A variety of research methods can be used to help businesses learn more about their target market, ranging from analyzing data you already have on hand to conducting more advanced statistical analysis.
Below are a few research options to help you identify and better understand your target market.
Customer Database Analysis
As a first step, you’ll want to look at the data you have on hand by analyzing your customer database. You likely already have some basic information on customers which helps you identify the types of consumers purchasing your products or services.
Conducting more in-depth analyses using existing data is also possible by partnering with a market research company.
A more in-depth CRM or customer database analysis can provide customer profiles, expand on the existing data already collected, and help with developing segments of customers.
Customer Surveys
Conducting customer surveys with your existing base is another easy starting point for businesses to learn more about their target market.
By asking key demographic questions, you’ll better understand customer interactions with your brand.
Other topics covered in customer surveys include:
- What factors are most important in the decision-making process
- How customers heard about your business
- What competitors were considered (if any)
- What sort of media or information was consumed before the purchase
This information will help businesses understand what drives their customers and ultimately, how they can better target a similar market audience going forward.
Here are some of our favorite customer survey questions we recommend including:
Market Surveys
While customer surveys can provide great information at a low cost, it’s also important to recognize there may be some bias in terms of how the business has previously marketed itself to obtain these customers.
Research with the broader market is a key step for businesses to truly understand their target market. A market survey allows brands to explain their offerings and test interest in their products.
They also collect a variety of insights into the competitive landscape, consumer decision-making, and potential marketing channels to utilize.
PS: With these types of surveys, it’s important to broadly target respondents (versus screening respondents to match your existing definition of your target market).
Qualitative Research
In-depth interviews and focus groups are another excellent way to learn more about your target market.
This type of research can be conducted with both existing and potential customers. Qualitative research allows for much more in-depth conversations with consumers to understand motivations and the decision-making process related to your products/services.
The research can also be used to obtain detailed product and service feedback or feedback on existing marketing campaigns to understand what elements resonate most with the target market.
Final Thoughts
Identifying a target market is a fundamental step all businesses must take to progress in a competitive marketplace.
Gaining insights into a target market through research allows businesses to make informed decisions and expand upon opportunities in the marketplace.
Furthermore, target markets change over time as businesses grow and products and services evolve. Because of this, businesses should continually revisit their target market to stay on top of these changes.
Staying ahead of the curve with research (conducted by a market research company like Drive Research) will set your business up for success.
Contact Our Market Research Company
Conducting research to identify your target market has numerous benefits for your business, from better products to happier customers.
With years of combined experience in the field, our team of researchers will partner with your team to uncover key insights about your market. We’ll guide you through the entire process, ensuring you receive the highest quality results.
Reach out through any of the four ways below to learn more about our market research services.
- Message us on our website
- Email us at [email protected]
- Call us at 888-725-DATA
- Text us at 315-303-2040
Chris Coville
As the Director of Research of Drive Research, Chris has 10 years of experience in the market research field and has completed projects with organizations across the globe. He was also named a 2017 40 Under 40 Award winner.
Learn more about Chris, here.
