Why using a target market is important in advertising
What is a Target Market?
When it comes time to draw up a marketing plan, you have lots of factors to consider. While some factors may be more important than others, they all contribute to the final goal: getting your product seen (and purchased) by the right people. That group of people is known as your target market. A target market is a group of people that share certain characteristics and have been considered potential customers for a company’s services or goods.
Some of the characteristics that place potential customers in these markets are as follows:
- Gender
- Age
- Income
- Race
- Education Level
- Religious Beliefs
- Geographic Location
This list of characteristics allows your company to place existing customers (and those you would like to reach) into specific groups. Having your target market defined will make the process of reaching your audience easier and help you stop spending money on advertising to the wrong people. Now that we know what makes up a target market, how do you find it?
How To Find Your Target Market
One of the best ways to begin to find your target market is to analyze the data you have collected from sales. If you're new to collecting sales data, don't worry - it's not hard! Some of the most effective methods of collecting data are either surveys or emails. These forms of data collection require little effort but get big results.
According to Grenis Media, about 76% of marketers fail to use behavioral data to target customers online with relevant advertisements. By simply collecting data, you will be a step ahead of most of your competitors and not waste money advertising to the wrong group of people. Surveys and emails will also allow your customers to give you feedback on how your business or your service has treated them.
Once you have your data, you must look for characteristics your buyers have in common. Finding these characteristics and grouping them allows you to easily narrow down and see which one of these groups are buying the most of your product, or which is buying the most often. It also allows you to see how much money your average customer spends on your product and if that average varies between certain groups.
Both ways of collecting data will help greatly in finding your market. Now that you have a good idea of what your customers have in common, you now can see which of your group of customers will be the most profitable to target. Understanding which customers you would like to target is key to finding out what type of target market you are after.
Types Of Target Markets
Now that you’ve collected data, you must decide what type of target market would be the best fit for your product. There are four different ways you can segment your customers. The types are as follows:
- Geographic (Location)
- Demographic (Population)
- Psychographic (Lifestyle)
- Behavioral
These different types of target markets can be decided based on what type of business you have and who your customers are. Take this example:
You and your competitor both own landscaping businesses in Florida. Both of you are looking to offer another service for current customers and also attract new customers.
Your competitor does not use a target market and decides to offer a new snow plowing service. However, you used a target market based on your location and know that there is no demand for snow plowing in the area. Instead, based on responses from surveys you collected from existing customers and knowledge of local weather, you decide to offer weed whacking.
By recognizing the needs of your target market, you are creating a better opportunity for your company to succeed by meeting the needs of the people who live there. Using a certain type of market will help you continue business with your current customers as well as attract new customers to your business.
Next Steps…
Now that you know your target market, the next step is putting your new knowledge to use. One step that can be taken is to create an advertising strategy specifically for your desired target market. This allows you to now advertise to the right people without wasting time and resources in other markets.
According to HubSpot, marketers who use segmented campaigns note as much as a 760% increase in revenue. Not only will you be saving more money, but you should be making more as well.
However, to maximize profit, it is best to find out what type of advertising is best for your target market. OOH advertising may receive better results for some industries, while streaming audio may work better with others. Remember, digital and traditional tactics can work in tandem.
