How to Do Target Market Research

Many businesses make the mistake of trying to appeal to everyone with their marketing efforts. But the truth is, you can’t be everything to everyone.

Think about it this way: if you’re a clothing store that focuses on trends, are you going to market to teenagers or senior citizens? The answer is probably the former because those are the ones most likely to buy your clothes. The same principle applies no matter what business you’re in.

But with the vast array of marketing strategies out there, it can be difficult to know where to start. So, how do you go about finding these ideal customers? The answer is target marketing. Keep reading to find out everything you need to know about target markets and how to identify yours.

What Is A Target Market?

A target market is a specific group of people you have identified as your ideal and best customers. This can be based on factors like age, gender, location, interests, or income level. They represents the intended audience for your product or service, meaning the specific group you want to reach and serve. Once you have identified your market, you can then focus your marketing efforts on reaching them; not all marketing efforts are equally effective.

For example, if you’re targeting teenagers, you’ll likely have more success using social media than traditional methods like print ads or direct mail. On the other hand, if you’re trying to reach senior citizens, you might have more success with traditional methods like television commercials or newspaper ads.

The bottom line is that knowing your target market saves time and money by using the most effective marketing strategies to reach them.

What Is Target Market Segmentation? 

Target market segmentation is one of the building blocks of effective marketing research and strategy. It is the process of dividing your target market into smaller, more manageable groups called market segments. This involves identifying your target market’s different characteristics and then creating smaller segments based on those characteristics, often focusing on a specific segment to tailor marketing strategies more effectively.

Marketing professionals use a variety of techniques to segment the consumer market. One common approach is to divide consumers into four major segments: demographic, geographic, psychographic, and behavioral.

1. Demographic Segmentation

One of the most common ways to define your market is by demographic segmentation, such as age, gender, location, and income level. This process relies on quantitative data—numerical information like age, gender, and income—to create clear and measurable segments.

For example, if you sell women’s clothing, your target audience would likely be women between the ages of 18 and 65 who live in developed countries with moderate to high-income levels.

2. Geographic Segmentation

Geographic segmentation involves dividing the market based on factors such as region, climate, and density. For example, if you sell snowboards, your target market would likely be people who live in cold climates where it snows often.

Analyzing where your customers live using web analytics, social media insights, and census data helps you better target your marketing efforts to specific geographic communities.

3. Psychographic Segmentation

In addition to demographic data, you can also define your audience by psychographic characteristics such as lifestyle, personality, interests, values, and attitudes. Psychographic data includes insights into customers' interests, values, attitudes, behaviors, and lifestyle preferences, which help businesses understand what products customers value and how to tailor marketing strategies accordingly.

For example, if you sell organic food products, your target audience would likely be health-conscious individuals who are interested in eating healthy and environmentally-friendly foods. Research allows businesses to segment broad markets into micro-segments based on lifestyle and emotional motivations, enabling more precise and effective marketing.

4. Behavioral Segmentation

Another way to define your target audience is by behaviors such as purchasing habits and online activity. Buying behavior, including factors like purchase frequency and brand loyalty, is often analyzed to identify segments with specific consumer trends and preferences.

As an example, if you sell luxury handbags, your target audience would likely be individuals who have a history of buying luxury items and who are active on social media platforms like Instagram and Facebook.

Why Is Target Marketing Important?

Target marketing is important because it allows you to use your resources more efficiently. Utilizing relevant data informs your marketing decisions and ensure your strategies are based on accurate insights rather than guesswork.

When you know who your target market is, you can focus your time, energy, and money on reaching them instead of trying to reach everyone.

For example, let’s say you own a small business with a limited advertising budget. Understanding the overall market helps you allocate resources effectively, ensuring your efforts are targeted where they will have the most impact. If you try to reach everyone with your ads, you’ll quickly run out of money with little to show for it. But if you focus on reaching just your market, you’ll get better results because your ads will actually be seen by people who are interested in what you have to say.

How to Define Your Target Market

Identify your current customer base.

You need to know who you’re selling to before you can figure out what they want. Where are they? What do they value? Look back to your current customer base and create detailed buyer personas that combine demographic, psychographic, and behavioral data.

This helps you better understand and target your audience. Put some thought into it, and you’ll be able to determine your target market.

Look into existing consumer behavior.

If you already have a customer database, look at your website analytics and data that’s already there. For example, if you have a website, you might look at who visits it and what pages they view or click on most often.

Using analytics tools, you can gather valuable demographic and psychographic insights from your website and ad data to better understand your target market. If you’re running ads on Facebook or Google AdWords, you can see which ads get the most clicks and traffic from potential target customers.

Check out your competition.

Your potential customers is likely already being served by your competitors, so conducting a competitive analysis is essential. This process looks into your competitors to see how they’re marketing themselves, what strategies they use, and what kind of results they’re getting. It also highlights gaps and opportunities in the market, helping you differentiate your offerings and identify underserved customer groups.

Analyzing the competitive landscape can also help you spot industry trends and set benchmarks for future growth potential.

A competitive analysis will examine data from primary and/or secondary data sources to identify target audiences. Additionally, understanding your weaknesses relative to competitors can help you offer a better customer experience.

Research, research, research.

Next up? Research! A lot of people get scared off by the word “research,” but it just simply means looking up relevant information online and seeing if there’s anything that will help with your target market.

Effective target market research uses a mix of qualitative and quantitative methods such as surveys, interviews, focus groups, and social listening. Surveys are a great way to gather demographic and psychographic information for use in your target market analysis, and surveys and questionnaires are scalable tools for gathering quantitative data on demographics and purchase intent.

In addition to primary research, leverage secondary research by gathering information from secondary sources like published industry reports, government publications, and online analytics to inform your decisions and identify market trends. Content analysis is also valuable for extracting insights from open-ended responses, social media data, and public opinion to better understand your target audience and market trends.

Check out social media platforms like Instagram and Facebook for current trends in their respective industries, read articles on niche blogs, look at what similar products are selling well right now (and why), go through Google Trends over time, and search Google Maps for local businesses that might be a good fit. There’s no shortage of information out there, and the more you know, the better equipped you’ll be to identify and reach your target market.

Find the perfect customer persona.

Next, research the demographics and psychographics of your customers. This will help you develop the perfect avatar for them in mind. Building a detailed customer profile by analyzing demographic, psychographic, and behavioral data allows you to create accurate buyer personas that represent your ideal customers. You’ll want to know what kind of person they are, how old they are, where they live and work, their income level, their interests (and passions), and more.

Building clear customer profiles and market segments reveals who you should target, how they make buying decisions, and which channels, price points, and messages will resonate most with them.

Then find the perfect target customer avatar: someone who fits all the above criteria perfectly! Make sure that this avatar isn’t just some idealistic version of yourself—there’s no point in making something if no one will buy it!

Optimize marketing strategies for increasing sales and revenue.

Once you have a good understanding of your target market, you can start developing marketing strategies designed specifically for them. This may involve using different channels such as print, online, or word-of-mouth. It may also involve tailoring your marketing messages to resonate with your target market, ensuring your communication style and tone align with their preferences.

Leverage insights from target market research to design effective marketing campaigns that attract attention, build trust, and establish your brand as a thought leader. Additionally, a thorough target market analysis helps you understand which advertising platforms to use, allowing you to allocate your advertising dollars more efficiently and convert customers through organic marketing efforts.

Whatever strategy you choose, make sure it will reach your target market and encourage them to buy from you. With the right approach, you can maximize your sales and revenue in no time.

Target Market Examples

Now that we’ve gone over what target marketing is and how to define your target market, let’s look at three businesses that have successfully targeted their audiences as a target market analysis example.

1. Lululemon Athletica

Lululemon is a popular fitness apparel company aimed at young adults who lead an active lifestyle. The company has built its brand around community and wellness, which appeals to its target audience of millennials looking for more than just workout clothes.

Lululemon tailors its service offerings—such as in-store yoga classes, personalized shopping experiences, and exclusive product lines—to meet the specific needs and preferences of its target market, further strengthening its connection with this audience.

2. Apple

Apart from its many target audiences, Apple has successfully tapped into a specific target market: creative professionals. Apple has positioned itself as the go-to brand for people in fields like design, fashion, music, and photography.

Their product or service offerings, such as the MacBook Pro, iPad Pro, and creative software, are tailored to meet the high-performance needs of these professionals, making them especially appealing to this target market. And their marketing efforts reflect that, from their sleek ads featuring beautiful photography to their partnerships with trendsetting fashion designers.

3. Amazon

Amazon appeals to a wide range of people with different needs, which is reflected in its massive selection of products. By offering everything from electronics to groceries, Amazon effectively targets more than one market segment, catering to specific groups such as tech enthusiasts, families, and small business owners. They have successfully defined their target audience as busy adults who appreciate the convenience of online shopping.

FAQs

What is target market research?

Target market research is the process of gathering and analyzing information about a specific group of potential customers for a product or service. This research helps businesses understand their ideal customers' demographics, behaviors, needs, preferences, and purchasing habits, enabling more effective marketing strategies and product development.

What are the 4 main types of target markets?

The four primary target market categories are demographic, geographic, psychographic, and behavioral. Demographic segmentation uses measurable characteristics like age, income, or education. Geographic segmentation is based on location, such as country, city, or climate.

Psychographic segmentation focuses on lifestyle, values, and personality traits. Behavioral segmentation analyzes consumer actions, usage patterns, and brand loyalty.

What is the best targeting strategy?

There is no single "best" strategy as it depends on your business type, resources, and goals. Common strategies include mass marketing, which targets the entire market with one approach; differentiated marketing, which targets several segments with tailored strategies; niche or concentrated marketing, which focuses intensely on one specific segment; and micromarketing, which customizes efforts for individuals or very small groups.

Most modern businesses find success with a differentiated or niche approach, as these allow for more personalized messaging and efficient use of resources in competitive markets.

How do I identify my target audience?

To identify your target audience, begin by analyzing your existing customers to understand who already buys from you and why. Conduct market research using surveys, interviews, or focus groups. Analyze your competitors to see who they target and identify any gaps in the market. Create detailed buyer personas that represent your ideal customers.

Evaluate the specific benefits of your product or service to determine who would benefit most. Consider both demographic facts and psychographic lifestyle insights. Finally, test your assumptions through small marketing campaigns, refine your audience based on the results, and remember to monitor continuously as audience preferences can evolve over time.

Knowing your target market is a core requirement of any good marketing strategy!

When you know who your target market is, you can easily create marketing and advertising campaigns that appeal to your business, which leads to better overall results. Monitoring consumer sentiment and economic trends through feedback, reviews, and surveys helps you stay attuned to changing preferences and attitudes, ensuring your strategies remain effective. Continuous research allows firms to maintain relevance in a rapidly changing landscape.

If you’re not already targeting a specific market with your marketing efforts, Let us know how Evolv can help you!

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