How to identify your business' target market: A complete guide

13 July 2020

Identifying your business' target market is a crucial element of any marketing strategy, helping to create a foundation with which you can build on in all manner of ways – from developing and naming products or services to knowing which marketing channels through which to promote them.

The greater your understanding of a target market, the better you'll be able to target them through content, ads and communications. Fine-tuning your approach through implemented systems, as opposed to random marketing tactics, can result in higher conversion rates and ROI as your business grows.

Here, we'll walk through the processes you can use to define your target market and reap the benefits of these more specific demographics.

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What is a target market?

A target market is the specific group of people you're aiming to reach with your products, services and marketing. They are the people who are most likely to buy your product or service, and who all share common traits such as demographics or behaviours.   

Broad categories such as single parents or homeowners would be examples, for instance, but to better understand who your best prospects are and how to reach them, you need to dig a little deeper. And when it comes to knowing who your target market is, your approach should be based on audience research as opposed to instinct.

It's also worth noting that while people outside of your target market will still buy from you, they won't be your top focus as you create your marketing strategy.

target market planning

How to identify your target market

Compile data on your current customer base

Identifying who is already buying your products or services is a great way of figuring out who your focus should be. Once you've gained an understanding of your existing customer base, you can then go after more people who fall in line with what you've found.

Gather whatever information you have about your current customers and compile them into a database to track any trends or averages that may stand out. Certain segments you might want to focus on include:

  • Age – which age range or generation do your customers fall in?
  • Location – as well as knowing which geographic areas to target, it also helps to know when to schedule your social ads to allow for greater visibility.
  • Spending patterns – are there any trends in the amounts of money your customers spend?
  • Interests – what hobbies and interests do your customers have beyond your product or service? Do they watch specific TV shows or interact with other businesses?
  • Stage of life – are your current customers students, parents or retirees, for example?

These last few things, known as psychographics, are something we'll go into in more detail later on in the guide.

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See what your competition is doing

Without gaining a sense of how your competition interacts with their customers, you won't be able to create detailed audience research for your target market. Researching your competition can serve to illuminate certain things like whether your competitors are also going after the same market segments, how they position themselves, and whether they're going after customers you hadn't considered yourself.

Identify your own value

List out the features of your product or service (i.e. what they do) and the benefits, or results, of each of those features. In doing so, it'll help to explain what it is about your product that makes the lives of your customers easier or better.

As you list these benefits, it will also provide further information about your target demographic. For example, say your business provides a service that allows mobile users to back up their photos remotely; this provides us with two clear facts about them: that they own a mobile phone, and use it to take lots of photos.

And if you aren't entirely sure how your customers benefit from your products then you can always ask them through emails or social media posts. You might find that they're using your product in creative ways you didn't initially intend them for; this may alter how you perceive your target audience for further sales.

audience research

Look into their psychographics

Similar to demographics, psychographic information includes things like your customers’ hobbies, interests, spending habits and values. They explain "why" they buy your product, and the combination of both demographic and psychographic data can define your target market more effectively.

A psychographic profile might include specific things like:

  • Concerned with health and appearance
  • Wants a healthy lifestyle, but lacks time to commit
  • Enjoys using social media
  • Finds fulfilment in their career and family
  • Values time with a small group of friends

Demographics alone don't provide the full picture of your target market. Psychographics provide more insight into them as people. Since customers are often influenced by their own perceptions and attitudes, the more qualitative data that psychographics reveals can help clue you in on aspects of the buying process. This allows you to greater leverage those all-important conversions.

Say, for example, that your customers do yoga and your brand offers a health or nutritional service; you could incorporate images of yoga in your marketing, or advertise such products at yoga studios.

Define what you want your target market to be

With the information you've gathered thus far, you can now create a statement that defines your target audience. You might follow a format similar to the below:

"Our target market is [gender] aged [age range], who live in [place or type of place], and like to [activity]."

However, you don't have to stick to these exact identifiers. It might be that gender isn't particularly important to your target market, and there are other traits of behaviours you might want to include. What's important is including the most salient points which are then going to guide your marketing efforts going forward.

Additionally, if you offer multiple products or services, you can always create a target market statement for each product category.

target market research

Evaluating your target market research

Once you've decided who your target market is, reflect on your decisions by asking yourself these questions:

  • Are there enough people who fit my criteria?
  • Will my target audience benefit from my product/service?
  • Do I understand what makes my target audience reach a buying decision?
  • Can they afford my product or service?
  • Can I reach them with my message? Are they easily accessible?

Defining your target market is the hard part, but once you know who your customers are, it becomes much easier to figure out how you're going to reach them and what marketing messages are going to prove most effective.

Of course, you may need to revisit your findings after you've tested out your marketing strategy. Revising your target market statement as necessary is important to ensure that it still accurately describes your most valued customers, and provides you with greater focus on what you need to do and how you're going to do it.

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The views, opinions and positions expressed within this article are those of our third-party content providers alone and do not represent those of Gazprom Energy. The accuracy, completeness and validity of any statements made within this article are not guaranteed. Gazprom Energy accepts no liability for any errors, omissions or representations.

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