Target Markets and How to Define Them
Updated: May 1, 2018
Before an idea can walk, it must first crawl. For us, the crawling stage consists of answering two absolutely critical questions; Does the concept solve a problem? And is there a market for the concept? You can only confidently go on to develop your product and look to establish a business model, once you know for sure that there is a market for it.
But how do we work that out? Surely everyone will want to buy this revolutionary product, right? It solves one of mankind’s deepest problems and the inventor behind it is insanely intelligent, dashingly handsome and an all-around champion. Surely, we’ll have lines down the street the second we open our doors to sell the product.Well therein lies the problem. As humans, we are innately overconfident in ourselves and our own ideas. And that comes in handy for us on a regular basis.
On a psychological basis, we’re actually much more likely to be successful at achieving something, if we believe that it will happen. Makes sense, right? If I don’t believe I’ll achieve something, I’ll more than likely not put in my full effort to make it happen. And so, we often need unbridled self confidence in ourselves and our ideas. But when it comes to new product concepts, our potential customers don’t have that same overconfidence in the idea. In fact, they’re more than likely going to even less confidence in the concept than your average Joe; after all, it’s their money they’ll be using to buy it.
So, we need to conduct rigorous analysis of the market to be absolutely certain that if we invest all the time and money to make the concept a reality, it won’t just fall on deaf ears.
Start with what You’ve Got
Without a doubt, the best starting point for your market research is with your existing customer base (if you have one). Unless you’re starting a new business from scratch, chances are your new product will be in some way related to your existing products. And that means that your existing customer base can tell you a lot about your potential target market for your new concept.
Start there. Gather as much information you can about the characteristics of your existing base; maybe that means running a competition or conducting a survey. Either way, ground your research in what you already know about the market.
And What Your Competitors Have Got
Remember the phrase ‘Keep your friends close and your enemies, closer’? That will come in handy here. Now, we’re not saying you have to be arch-rivals with all of your competitors, but there is plenty to learn from them about your potential target market. After all, your target markets will likely be very similar.Of course, you can’t just send them a friendly email asking for their entire marketing plan, but that doesn’t mean there isn’t anything to learn. The way in which their public marketing is presented can tell you a lot about who they’re targeting. If the language is quite formal they’re more likely to be targeting the older working professional. Or if the language is extremely conversational and colloquial, they’re more likely to have their eyes on the millennial hipster.
How Specific Do You Want to Be?
Before we go any further, we need to take the time to consider how defined you want your market to be. If you really wanted to, you could narrow down your target market all the way down to one person if you apply enough parameters. So, the relative size of your target market will be dependent on the nature of the product you’re developing. If you’re developing a new Dive Computer for deep scuba diving depths, your target market is likely going to be much more niche than if you were selling umbrellas. And that will affect how specific you need to be in your research.
Do Your Market Research
There’s no set amount of market research you need to do before you’re ready to start developing your product. If you’re so inclined, you can keep researching your target market forever. If you’re not interested in spending the rest of your days researching, there are a few things you need to focus on. Perhaps the most crucial is knowing who your customer are in terms of their personal characteristics; age, occupation etc.
Next you need to understand their current buying habits as well as you possibly can. Try to go beyond the simple question of what they’re buying, and try to understand why they’re buying it. That can be incredibly difficult to find out; some social psychologists devote their entire lives to that exact question. Yet, it is insanely useful to not just understand the what, but the why. It’s your best chance to be able to develop a product that they’ll want to buy.
Tap into the inner psychologist within you. Look at the current products they’re buying and ask yourself ‘what makes that product so superior?’ Is it the price point? Is it the more enjoyable user experience? Can you develop a product that will be cheaper or easier to use that will convince them to make the switch to your product?The key here is that you can’t just sit back at your desk and hope to find everything you need for your research. Maybe you need to get out and run a survey or speak to business owners about their customers. There’s no set formula, but chances are you won’t find everything you need on the internet.
Construct Your Ideal Customer Profile
To collate your market research, consider creating an Ideal Customer Profile as a scaffold for your target market. By narrowing your target market down to its key characteristics, you can develop a clear idea of your direction. You can find a bunch of different templates online to assist you in establishing your customer profile. How specific you develop the profile is up to you. If you think your market will be quite niche, you’ll likely have a much more specific customer profile.
You don’t have to limit it to the demographic of your ideal customer. Think about the attitudes and perceptions that they have too. Of course, this is most effective when you can back it up with your research data. Educated guesses can be useful, but there’s no substitute for accurate and reliable research.
And Act on It
So, you’ve established your target market, now what? Don’t stress, you can rest assured that your marketing strategy and product development will be much more effective with the backing of an ideal customer profile. Use your profile to put yourself in the shoes of your customer; try to think the way they would, given the attitudes and perceptions you’ve identified. Doing so, will greatly improve your user experience and allow you to develop the best possible product. And the same goes for your marketing strategy.
You should tailor your marketing avenues and content to your target market. There’s no point in using Snapchat as a marketing tool if you’ve identified your target market to be the elderly. From here on out, your target market will inform your decisions. Because at the end of the day it is still all about your customer. #startup #targetmarket #marketing #marketingsrategies #consumerbehaviour