Target Market: Definition, Objectives, and How to Define Them

Target Market: Definition, Objectives, and How to Define Them

To determine the right marketing strategy for developing your business, you must first know the target market for your business.

Knowing your target market will help you make products according to their needs and wants, create the right marketing content, sell your products on the right platforms, and many other benefits.

Then what is the target market? What are the benefits and how to determine it? see the description below!

What is Target Market?

The target market is people who have been grouped and identified because of the same characteristics to become the most likely and potential target customers for a product.

Generally, the process of determining this target market begins with determining market segmentation, which is the process of grouping people based on their segmentation, such as:

  • age
  • gender
  • residence
  • income
  • lifestyle

From the segmentation above, you can process the data obtained and determine which segment best fits the characteristics of the business you are building. So, this selected segment will be your target market.

Benefits of Knowing the Target Market

In general, the target market aims to ensure that the marketing strategy that you do can be right on target. This is important for increasing sales as well as measuring the success rate of the strategy you use.

Following are some of the benefits if you can know your target market well:

  • Increase Sales
  • Building Communication with Customers
  • Anticipating competition
  • The product adjustment process and marketing strategy are more focused
  • Able to target wider market opportunities but remain focused
  • Organize products for the better
  • Put your marketing ideas in a clearer light
  • Creating traction in the field of marketing
  • The company is in a better position
  • Find and compare market opportunities
  • Grouping the budget that is owned appropriately

Types of Target Markets

So, after knowing what the target market is, now is the time for you to know the types so you can choose the right target.

In general, the types of target markets are grouped into 3, namely: 

  • Mass Market. Kind of target market which means everyone. That is, businesses do not need to implement special segmentation for their consumers. Because, the products sold are general and intended for everyone. 
  • Broad Market or Differentiated Market. A more specific type of target market.
  • Niche Markets. A narrower type of target market because it is related to specific consumer characteristics.

How to Determine the Target Market

Let's go through the steps to correctly define your target market one by one:

1. Start with Market Research

The first step in how to determine your target market is to find out who will buy your product by doing market research. In this process, apart from identifying customer data, you also need to find out existing competitors.

2. View current customer data

If your business has been running for some time and has customers, take a look at the data. Who are your current customers and why do they buy the products or services you offer? Through this data, you can look for common characteristics or interests. It is very possible that people with similar characteristics like the product or service you offer.

3. Communicate with Your Customers

To convince customers to buy the products or services you sell, you must be able to go out into the field to meet your customers. By communicating with customers, you will find out their needs and how your product impacts them.

4. Study the competitor's target market

The next way to determine the target market is to look at the competitor's target market, whether in a similar field, product or industry. Approximately, who is their target market? You can pursue the same target market, but you can also take opportunities by pursuing a potential target market but being ignored by competitors.

5. Analyze the product or service you offer

Next, you can analyze the product or service that you offer. Write down and list the features and benefits of the product you have. You need to know what are the advantages of the product you offer and find out which segment needs it the most. Apart from that, by understanding the features, benefits and advantages of the product, you can also take advantage of this for appropriate and effective marketing. 

6. Perform segmentation

To make it easier to determine the target market, you can do segmentation or grouping. These segments include demographic, psychographic, geographic, and behavioral segmentation. Here's the explanation:

  • Demographic segmentation: each person is identified as belonging to a group of age, income level, gender, occupation, marital status and education level. 
  • Geographical segmentation: this segmentation also needs to be taken into account, whether you want to reach a target market in urban, rural areas, or somewhere in between.
  • Psychographic segmentation: this segment includes lifestyle, beliefs, attitudes, interests, hobbies and values.
  • Behavioral: is a segment based on the behavior or specific actions they perform. 

7. Creating Buyer Personas

Buyer persona or buyer persona is a representation of your customer. This means that you describe potential buyers based on their physical characteristics, demographics, and other factors.

To build a buyer persona, you can start by determining your gender, age, lifestyle, education level, income level and more. With specific data, the target market you get will be more unique.

You can get data for buyer personas from a variety of analytics tools. If you have a website, Google Analytics is one of the right tools. This tool is able to record information on visitors to your website starting from their location, the duration of accessing your website, even the visitor's profile.

8. Take advantage of Analytics Tools

You can take advantage of technological advances to get the expected results or even better. By using data processing devices or analytics tools, you can find out your target market. 

For example, you can use Google Trends to find out what people are frequently searching for on Google.

9. Do an evaluation

After successfully determining the target market, the next step is to do an evaluation to see what has been achieved and what needs to be improved.

Reporting from Oberlo, you can consider the following questions to evaluate:

  • Is the target market enough to sustain this business?
  • Does the specified target market really benefit from the product or service you offer?
  • Can they buy the product or service offered? 
  • Will my message reach them?
  • Is the target market easily accessible?
  • Do you understand what drives the target market to make decisions?
  • Will they make repeat purchases or will they have to keep looking for new customers?
  • Is there a lot of competition for this target market? If so why?
  • And other questions.
  • You can do this evaluation with the whole team to get multiple perspectives and understanding.