What are target market strategies?
A target market is a group of people that have been identified as most likely to want to buy a company’s products or use their services. This group is connected by a specific need, and is usually determined by age, location, and gender. There are many methods companies employ to determine the right target market for them. Most begin by conducting a Market Opportunity Analysis, which reveals the size of the company’s competition in that sector, the size of the market itself and its profitability. The results of this analysis often determine the target market strategy a company chooses. Usually it comes down to three options, which are: using one marketing mix on all markets, focusing on one market segment or using multiple marketing mixes on multiple market segments.
Why is target marketing so important?
Targeting the specific group of people who you are marketing your products to is more effective than marketing to the general public. In fact, it is even cost effective. Based on people’s interests and demography, target marketing allows you to carve out a certain segment of your market where you will concentrate all your marketing efforts. You have a higher chance of converting these prospects into paying customers as your marketing messages will be more personalised. It also allows you to strengthen brand recognition, as you will be seen as an authority in your industry. Consequently, you will be recording higher customer loyalty and higher customer retention.
What are the 4 types of market segmentation?
The four types of market segmentation are:
- Demographic segmentation: Companies divide the population based on certain variables like location, age, gender, income, and so on. This allows them to focus their marketing efforts on those most relevant to their objectives. For instance, a car company will focus its marketing on people who are old enough to even drive. Automobile companies will also segment according to income, based on the kind of car they manufacture.
- Behavioural segmentation: This strategy divides people based on their decision-making patterns. It is more common in our smartphone age since, it is easier to pick up on people’s interests. Marketing campaigns that focus on festivals are also a type of behaviour segmentation.
- Geographic segmentation: Here, companies market their products based on geography. Even with the internet, which increases reach, this method is still popular, as some locations have specific needs like air-conditioning for hot areas and heaters for cold areas.
- Psychographic segmentation: Like the behavioural method, this takes into account the psychology behind people’s buying styles. Social standing and lifestyle, generally, affect what and how people buy. Companies also take this into account when marketing.
What factors are important in selecting the target market?
Deciding on a target market is informed by several factors, including:
- Resources: how well could you succeed in this segment?
- Distribution channels: will you be able to get across the appropriate distribution channel?
- Goals/objective: does the target market align with your company goals and objectives?
- Profit: how much profit will the competitiveness of the market allow?
- Growth: how fast will the market grow in the future?
Which social media platforms will help me understand my target market?
This depends on your target audience. Different social media platforms appeal to different people. This can be because of each platform’s unique features, the things the user is interested in generally and the ones they find most of their friends on. Therefore, you will need to study the demographics of every social media platform to pick the right one for you. Facebook, for instance, is the most popular as it has over a billion users. It should always be among the platforms you use in understanding your target audience.
If I’m doing a consumer-targeted online survey, how large a sample do I need for statistical reliability?
It is really about finding a balance between cost and error margin. Optimising for a more reliable survey will require as large a sample as possible. A larger sample will afford you the confidence and reliability needed to determine and understand your target market. However, it comes at a higher cost than a smaller sample. Smaller samples, on the other hand, leave a wider margin for error and so cannot be relied upon. Between these two extremes is your ideal sample size.
Is there any need for benchmarks?
Yes. You need to set benchmarks to see how well your leads are converting into paying customers. While setting benchmarks for what you are reaching for, also set for what you will benchmark against. Be sure to not only track your results, but also which strategy is working and where your leads are coming from. Understand what works and how effective your target market relates with your products and services.
How effective is niche marketing?
The internet has made it possible for people to enjoy a personalised viewing experience. Focusing your target market on a small group of prospects will put you in the right position to get more and more referrals. Digital marketing allows you to deliver personalised products and services to a smaller market within a larger target market. Therefore, you can start to segment your market even further to market to the middle-aged upper class, or a certain geographical area, or focus on a particular profession in a particular area.
What am I likely to get wrong?
When choosing a target market, most businesses make the mistake of targeting non-buyers. These are people who are either willing or unable to buy. A good understanding of your market should not only take into account those your product and services appeal to, but also those who can pay for them and are willing to do so. It is easy to come up with the right demographic and psychographic profile of your target market, but you should also know if they are willing and disposed to invest in you.
How ideal is it to target a small market?
Even though it is recommended to make your target market specific, it is counterproductive to have a target market that is too small. This will affect the size of your prospect group and consequently the leads you get. Having a target market that is too narrow is only manageable if you are selling products and services that are highly priced. Apart from that, you should be watchful about being too specific.