There is a popular saying that states“You can please some of the people some of the time, all of the people some of the time, some of the people all of the time but you can never please all of the people all of the time.”Knowing and defining your target market can be argued to be one of the most fundamental steps in business.
The reason? Trying to cater for too many markets brings a number of challenges. Targeting everyone is an unrealistic expectation of any business; it requires a lot of investment both in terms of time and financially. Yet the risk of a low return on investment is much greater, particularly for smaller businesses that don’t have the funding to please the entirety of the market.
Furthermore, if you market to the wrong people, there is a threat of weakening engagement with them. We’ve all had our fair share of experience being spammed with inappropriate email offers which only lead to an immediate search for the unsubscribe request. This would ultimately lead to negative perceptions of your brand image.
Lynda Falkenstein suggests:"Smaller is bigger in business, and smaller is not all over the map; it's highly focused."
So how do you define your target market? In my opinion, there are 4 key steps which can be followed - whether you are embarking on a brand new venture or re-evaluating an existing one.
Step 1: Know Your Offering
Whether it is products, services, experiences or something entirely new, if you don’t know what you are offering, its strengths and weaknesses, how can you ever really begin to understand who will use it? Good business knowledge is crucial here.
SWOT analysis is a great way to learn more about your business, the market you operate in and existing competition in the industry. In other words, your:
Strengths– how will your offering benefit your customers, is your product unique?
Weaknesses- are you using the best distribution channels?
Opportunities- is there a gap in the market?
Threats- who are your competitors, what do they do well?
With this knowledge, you can start identifying your market and understanding the type of audience you could market to. Market Research can provide the perfect complement SWOT analysis. Satisfaction surveys, brand association studies, competitor analysis, market sizing and retention studies are just a few of the research methods you can use to find out more about your market.
Step 2: Looking Beyond the Credit Card
Ultimately, you want to be able to build a strong marketing strategy and a solid advertising campaign for your product or service. But without knowing your target demographic and their purchasing patterns, the effectiveness of even the best campaign would be low.
With a lot of existing sources already available, secondary research is an ideal first point of contact to understand key demographics. However, this brings its own challenges. The data can often be time-consuming and difficult to interpret. Demographics alone also only allow you to make assumptions about behaviours. What you really want to do is understand the lifestyles, behaviours and motivations of shoppers to identify your target market. Just because someone lives in London, doesn’t mean we can infer they have access to the latest technology gadgets available.
Understanding more about shoppers and their motivations can be achieved through cost-effective primary research methods such as online surveys, focus groups or interviews and diary studies. We often use segmentation studies as a way to clearly define groups based on their purchase intent and motivations.
Here, you would choose a sample that is representative of the market overall and group consumers into segments based on their common needs, interests, behaviours, geographic location to name a few. As a company, you should then identify the segment that you are best equipped to handle in terms of meeting their needs and this helps you to identify your target market.
In turn, you can start to create a more targeted approach when it comes to your marketing, whilst also satisfying the desires of your customers and giving you a greater competitive advantage.
Step 3: Test, Test, Test!
At this point you should know what exactly you are offering, who you face competition with, how your product or service will be used and who is likely to use it. But before you continue to develop your marketing strategy, it’s important to check that your product or service and the target audience you have identified are truly compatible.
When launching a new product, service or experience, it’s a bold and risky move to launch without testing it first, especially when an extensive financial investment has been made.
To reduce the risk before launching a new campaign, test your offering with a sample of the identified target audience. If it’s a product, for example, a prototype or concept test should be used - allowing consumers to interact with the product, share their expectations, perceptions and experiences. You may just find that the way consumers interact with the product brings to light a new angle for how it could be marketed.
If you’ve already developed part of your marketing strategy, you can even test this as well to see if the messages you’re trying to convey truly fit with what the consumer is looking for.
Marmite is a great example of how it’s easy to confuse your target market based on your expectations of how the product will be used. Originally Marmite was marketed as a nutritious food for children and even tried to target health professionals. With low turnover, the company took the time to think outside the jar and research perceptions of their product, looking specifically at how it was being consumed. This led to a shift in positioning towards a multiple use family favourite for use in soups, sauces, savouries and sandwiches. Following this, the brand also acknowledged that it was the type of product that caused a lot of controversy regarding the taste, eventually leading to their most memorable campaign ever. Love it or hate it.
Step 4: Keep Up With Market Changes
At this point, you will have spent a lot of time and effort getting to know your target audience. But a common mistake is thinking that’s where the hard work ends.
Customers’ needs, wants and behaviours are forever changing. Whether it’s as a result of changes in the economy, advances in technology or even new competition from up and coming brands. As consumer behaviour changes, businesses have to evolve to ensure they are still able to cater for their target market. In some cases it is even necessary to change their offerings entirely to retain their current customer base. We have seen more than a few examples over the years where leading brands have struggled to keep the pace.
Kodak, for example, have often been cited as a company that lost their way following a significant change in the market. They were a leading player in the technology market for successfully commercialising the camera better than any other brand. Yet they fell behind following the development of digital photography. As technology advanced, so did their customers who were looking for more from their cameras and photography, something that Kodak could no longer offer. Although Kodak has now made advances in digital imaging, the time taken to implement change has led to them following the pack rather than leading as they once did.
I would argue, similar to many other researchers, that understanding customer opinion and constantly re-evaluating your position is key to widespread success. Evaluation of your brand’s position is an ongoing cycle and co-creation plays a vital role. Onlineresearch communities help companies to keep up with their current customer base and enable them to recognise potential changes early, be proactive in making changes and stay ahead of the game.
See how our online research tools helped the Channel Islands' largest telecom provider get closer to their target market. Or, book a free demo of our online market research platform.