Published by Gary Taylor on 4/8/2016, updated by Baris Zeren on 6/20/2022
So you've got this business idea. You know what it is, how it works, and you're ready to start. But one question remains: Who are you going to sell it to?
The answer isn't as apparent as it seems if you're like most people. You might have an idea of your target audience—maybe it's "moms" or "college students"—but that's only half the story.
Identifying the right target market for your new or old business is about knowing who they are. You also need to understand why people buy things in the first place. And this is something that can take some time and research.
But don't worry! We've got some great tips for identifying your target market for old or new business in this blog post. We'll even answer common questions about target market identification along the way.
What Is A Target Market?
A target market is a group of people you want to sell your products or services to. You can think of it as a giant dartboard: you're aiming for a particular demographic, and you want to hit that demographic in the bullseye.
For example, suppose you're selling a new brand of peanut butter. In that case, you might focus on young mothers looking for a healthier option than what's currently on the market. Or, if you're selling an online course on making money from home, you might focus on people interested in starting their own business but don't know how to get started.
The target market is about knowing who you want to sell to. You will also need to learn how many people are in that group and what they have in common (e.g., age range, gender, geographic location).
So now that we've covered what a target market is let's learn how to find one for your business.
How To Identify Your Target Market: Step-By-Step Guide
When it comes to marketing, the general rule is that you want to target your customers on a particular level. This can be done through demographics, psychographics, or even geographic location. However, if you're not sure where to start, here's a step-by-step guide on how to identify your target market:
Step 1a: Gather information about your current customer base.
If you're lucky enough to already be in business with an extensive array of customers, study them and see what common characteristics many have.
Here is some demographics marketers measure:
- Geographic locations (e.g., the Northeast or the U.S.)
- Age range (e.g., 18-24 years old or 55-70 years old)
- Gender (e.g., male, female, or transgender)
- Income level (e.g., 30,000 per year or 500,000 per year)
- Education level (e.g., those with PhDs or those with a high school education)
- Ethnicity (e.g., African-American, Asian-American, or Caucasian)
Here is some psychographics they measure, usually evaluated in some sort of test:
- Purchasing habits
When you're done, it's important to note that you're not describing a person that exists but an ideal audience(for ex: a dentist mailing list). An ideal audience is people you're confident will be interested in your products.
Step 1b: Use focus groups.
As a new business owner or entrepreneur, you must start with customer research to identify your target market.
You can do this by holding focus groups where you ask questions about what people like, dislike, and need from your product or service. Focus groups are a great way to get insight into what kinds of customers and what they would like from your company.
Focus groups can be conducted in person or online. They can be scheduled in advance or conducted on-the-spot as part of a marketing campaign. They allow you to see how people react when presented with different options for products or services. You can use that knowledge to make intelligent decisions about where to spend money on advertising campaigns.
One way to conduct an online focus group research is to reach out to specific groups using targeted email contact lists. For example, you can send questionnaires to audiences in different niches using an email list. Bookyourdata has a database of teachers' email lists, retail email databases or oil and gas contacts lists to target the specific professions and demography.
The goal of a focus group is to gather qualitative data about how people feel about specific products, services, or brands. They are handy for identifying needs and desires that customers may not even realize they have yet.
How to use focus group for target audience Identification
Focus groups are an excellent way to identify your target market, especially if you're a small business with a limited budget.
Here are some tips for using focus groups to identify your target market:
- You should have at least 5 people in each focus group session (the more, the merrier!)
- Pick topics for discussion that will get everyone talking about their experiences with similar products or services (this will help with creating products that cater to their preferences)
- Ask open-ended questions like
- "What's important about X?"
- "What does Y mean to you?"
- Instead of yes/no questions like "Do you like X?". Open-ended questions will get more information from participants than simple yes/no questions.
- Find out who is most likely to buy your products or services by asking questions about what they do daily and what they like doing in their spare time.
- Ask them why they use certain products or services instead of others so that you know what makes one business stand out from another in their eyes.
- Ask them how much money they would be willing to spend on specific products or services at different times of year (e.g., Christmas vs summer). You can then gain insight into how much each customer has available for spending on additional items throughout the year.
- Ask them how often they buy certain products or services (e.g., every week vs once per month) so that you know how often each customer needs a product or service.
Step 2: Study your competitors.
You can determine your target market and how best you can reach them by
- studying your competitors
- analyzing their marketing strategies and then
- tailoring your own strategy accordingly.
For example, if you want to start a bakery with vegan baked goods, look at other bakeries that offer vegan options. See which ones are getting the most attention from customers.
This insight will give you an idea of what kinds of people are buying their products. You can use the information to decide pricing and advertising strategies for a particular target market. It ensures you know where to focus your marketing efforts.
Are they successful?
The first step in this process is to study your competitors' websites. Look at their products and services to identify trends in their marketing strategies. Are they targeting a specific demographic or geographic region? What types of offers are they using? What kinds of advertisements do they run?
What works for them might not work for you.
While finding out what works for them is crucial, don't assume that everything they do will work for you too. You may find that certain aspects of their marketing campaigns are irrelevant or unimportant to your business model.
Step 3: Look at the product.
When you're desperate, instead of a top-down approach, try a bottom-up one. That is, analyze the product itself and gather who would be interested in it based on psychology.
The idea behind this method is that the most important thing is to understand how people think. In other words, if you know more about human psychology and how it relates to your product, you'll be able to figure out who might be interested in it.
First, consider the "psychological segmentation" of your target market. That means that instead of grouping people by age or income bracket, you group them by their personality traits.
For example, suppose you're selling a new clothing line to teens in high school. In that case, you might categorize them based on their level of conformity and rebelliousness. Or perhaps you're selling a new app for iPhone users. You might classify your users according to whether they're more "extroverted" or "introverted."
If you're selling a new operating system for computers. You could create ads targeting people with specific personality traits like:
- Sceptics — People who have tried every other operating system and still aren't satisfied
- Geeks — Computer programmers who need something powerful yet easy to use
- Techie moms — Women who are tech-savvy but still want an easy-to-use interface for their kids' laptops
Once you've identified these psychological segments within your target market, focus on how they think and feel. For example, if you're selling an app geared toward introverts, you need to know what kinds of things they like. Maybe it's reading books or listening to music on headphones while riding public transportation.
You must understand how different types of people think and feel so that when they come across your product or service, they will immediately recognize its value.
Step 4: Conduct a campaign.
Once you have identified your target market, it's time to conduct a marketing campaign. This can be done through direct mail, email, social media, and other digital channels.
For example, you can buy an email list of people by occupation (especially useful when B2B marketing) on Bookyourdata.com. Bookyourdata also has a list-builder tool that helps you create a marketing list based on filters relevant to your identified target market.
For example, suppose you are looking for home buyers in California and have identified them as your target audience. In that case, you can use this tool to generate a list of all the people who meet these criteria and contact them via email or phone.
You can also use Facebook and Twitter to create targeted ad campaigns for your exact groups. You can also do more "classical" advertising, but that may be likely to not result in complex numbers, so be cautious when spending a lot of money.
When considering how to reach your target audience, think about what they do daily. If your target audience works in an office environment, sending them an email could be effective. However, sending them an SMS would be more appropriate if they were on their phones all day.
Ensure your message is clear and concise so it doesn't get lost in the noise. Your goal is to get people interested enough to click on your link (if applicable) or fill out your form (if it's for a lead gen campaign).
Step 5: Evaluate and narrow your focus.
Sometimes, marketing feels like throwing darts at a wall after covering your eyes, then opening them and asking, "Did it work?" You should have enough data now to measure your campaign and see if it's successful or not.
If you went in the right direction, perhaps your next campaign can target your audience even more. You can also leverage Bookyourdata's constant updates like the insurance agents' email database update to get more data to refine your target market further. After assessing your previous campaign. You may need to use the list-builder filter to change the age range and specific locations or narrow it even further.
It is essential to understand that identifying your target market isn't just a one-time event. Your target market will change over time based on technology, competition and economic changes. As such, it's essential to regularly check in with your target market and ensure that your messaging remains relevant and appealing.
This step is essential: Lather, rinse, and repeat! After a few go-rounds, you'll have a clearly defined audience.
How Important Is Identifying Your Target Market?
Identifying your target market can be an essential part of your business strategy. By identifying and understanding the needs of your target market, you can create a marketing plan that will increase customer engagement and drive sales.
Here are some reasons why it is crucial to identify your target market:
Identifying your target market is essential to maximizing profit potential. Targeting the right market will help you make more money. The more narrowly you can define your target audience, the easier it is to market to buy your product or service.
You don't want to waste time and money on marketing strategies that won't work. You can streamline your marketing effort by identifying your target market before developing a marketing strategy. The target market data will allow you to focus on the right people rather than wasting time and resources on those who are not likely to buy from you.
Knowing your target market makes it easier to understand what they need from you and why they buy from other businesses in the same space as yours. You can use this knowledge to create unique selling propositions (USPs) that resonate with customers. Your USP distinguishes you from competitors who are also targeting this demographic segment.
Increase Customer Engagement
Identifying your target market will help you focus all of your marketing efforts on this specific group of people. With the target market information, you can reach them more easily through social media, email marketing, direct mail campaigns and other methods designed specifically for this audience.
Save Money on Marketing Costs
Targeted campaigns have lower costs than mass-marketing campaigns. This is because they're more focused on specific groups of people who are likely to respond positively to relevant offers and incentives. You can also save money by avoiding spending on ads that aren't relevant for a particular group of people or aren't well-targeted enough.
Why Is Identifying The Target Market Important in email marketing?
Identifying the target market is vital in email marketing because it helps you craft your message and make it relevant to your audience. It also allows you to segment or group your subscribers based on their needs and interests.
The best way to kill an email campaign is using a prebuilt email list like a CFO email list without knowing your business's real target audience.
Sure, demographics, psychographics, geography, and profiling might sound wishy-washy and strange. Still, these studies are done by the best in the business for a reason. Take the time to understand your market now, and your marketing team will thank you.
In addition to understanding your target audience, knowing how they want to be communicated can help create an effective email campaign. This is especially true when setting up an email nurture series.
Suppose you know that a subscriber wants information about a specific topic or product. In that case, you can use this information to send them relevant emails that answer their questions and address their concerns. Otherwise, you might send irrelevant emails that don't solve any problems for your subscribers.
This misinformation can lead them to unsubscribe from your list altogether because they're tired of receiving irrelevant information from you.
What is target market Identification?
A target market is a specific segment of consumers with common characteristics, such as age, income level and interests. Target market identification is defining a target market. It can be used to identify potential customers for your product or service.
Is it necessary to identify the target market?
The answer depends on your business goals. If you're looking to sell a product to everyone, it's not necessary to identify a target market. However, specifying your target market is critical to selling your product to a specific group of people. It allows you to focus on building relationships with those most likely to buy from you. It saves you from wasting time trying to convince people who aren't interested in what you have to offer.
What factors must be used in selecting a target market?
The following factors should be taken into account when selecting a target market:
Demographics: Customers' age, sex and location can be used to predict future sales trends. Your advertising campaign should reflect this demographic profile if most customers are young professionals living in large cities.
Income level: The level of income is another critical factor in selecting a target market because it affects purchasing power and demand for products or services.
Psychographics: Psychographics refers to lifestyle and personality traits associated with specific groups of people. This kind of information is usually obtained through surveys or focus groups.
Buying behaviour: Buying behavior refers to how consumers react to certain stimuli like advertising messages and other promotional activities.
Geography: Geographic location also plays a vital role in selecting the target market for your business. For example, suppose you are selling office supplies. In that case, it makes sense to focus on companies within driving distance of your store or warehouse.
What does Identifying the target market involve?
Identifying the target market involves many elements. The first step is understanding what customers want and need and how they make buying decisions.
The second step is to determine who your competition is, and the third step is to figure out how to position your product or service in a way that makes it stand out.
Once you have identified your target market, you need to create a marketing plan to help you reach them. A well-crafted marketing plan will help you identify where your customers are located. What they're interested in and how much they're willing to spend on your product or service.
How can I identify the target market for a new business?
You may not have enough data if you are just starting your business. Still, you can leverage other available data to identify your target market. Here are some ways:
Industry research: Researching which companies are doing well in an industry can give an idea of who might be interested in buying from you. Especially if those companies have similar products or services.
Market Survey: Surveying existing customers about why they bought from your company can provide valuable insights into who else might want to purchase from you. You can ask them questions like "Why did you buy this product?" or "What do you love most about the product?"
Demographic Data: Demographic data is an excellent tool for identifying your target market as it gives information about age, gender, income level etc. For example, if your target audience is women between 21-24 years old, it would make sense to advertise online or on social media sites, they visit often.
What is a target market example?
A target market is a group of people most likely to purchase your product. For example, suppose you were selling makeup. In that case, you might want to focus on women between 18 and 24 who are interested in fashion.
The best way to find your target market is by doing research. This includes asking your friends or family members what they think would be a good target market. You can also ask them about their experiences with similar products or services.
You should also conduct some basic research on your own. Look at demographic information for your location and other areas where you plan to sell your product or service.
What are the types of target markets?
Target markets are classified by their segmentation. Market segmentation is the process of dividing a market into different groups of customers, who have similar needs, wants and behavior.
Market segmentation can be based on demographic, psychographic, behavioral or geographic criteria.
Demographic segmentation: A target market can be segmented by age groups (children, teenagers, adults and the elderly), gender (male and female) and income level.
Psychographic segmentation: A target market can be categorized based on social class (upper class, middle class and lower class), lifestyle (urban, suburban or rural), personality type (risk takers vs. risk avoiders), etc.
Behavioral segmentation: A target market can be differentiated based on their behavior (buyers vs. nonbuyers) or buying habits (high maintenance vs. low maintenance buyers).
Geographic segmentation: A target market can be split into regional groups such as North America (Canada, Mexico and USA), Western Europe (Germany, France and Italy) or Eastern Europe (Russia and Poland).