What is the target market and why its study is critical to your business plan.
Studying the target market is one of the basic procedures for starting a new business but also a great idea for many startups. In our market analyses, the study of the market is a central aspect, and in the next few lines you will find out why…
The target market, in English target market , is the specific market to which a company should direct its offerings. Its very definition makes us realize how indispensable it is to the fortunes and growth of a brand.
But what does this study, which is a key component of any company’s business plan, consist of?
How to find the target market?
Studying the target market is basic so that you can focus your marketing efforts and strategies toward a specific group of consumers.
Consumers interested in your market, thus in your company’s products and services, are called target customers , or reference customers.
Studying the target market requires a thorough market analysis conducted by amarket research agency such as CMI.
Such analysis, through the interception and sifting of a large amount of dai online, can determine:
- The profile of your target customers.
- A sketch of your competitors (not surprisingly, the study of your target market must always be accompanied bycompetitive analysis).
- Current and future trends in your industry.
- The trend and growth opportunities in your target market.
- The extent of your target market.
- The topics most discussed in reference to your industry.
- The products/services you should focus on.
- Nascent innovations in the target market.
The study of the target market also enables us to divide it into segments.
Read also: 3 tips for a tourism market analysis capable of providing the right answers
What the market segment is and why it is critical for companies to establish themselves. That is, all of them.
The market segment is the result of dividing the target market into homogeneous groups of consumers, each of whom responds differently to a stimulus (e.g., communication, prices, advertising, etc.).
These groups are precisely the segments; therefore, their distribution is done on the basis of well-defined parameters that unite consumers in the same group.
Segmenting the market is extremely important for devising effective marketing and business strategies.
Segments, when precisely defined, allow us to fine-tune the ideal marketing mix for the needs of individual target customers.
The study of market segments also enables companies to make important decisions regarding the manner and intensity of marketing operations according to different segments.
The consequence? A successful, well-defined, focused and effective business strategy.
How does the target market study and segmentation take place?
The most classic methods of conducting a target market analysis are surveys, focus groups, and interviews.
These are procedures that we at Central Marketing Intelligence avoid applying because they could lead us astray, produce false and tainted results and, therefore, result in counterproductive analysis for client companies.
But what, then, is our method?
At CMI we use only the best professional software for studying online data, including specific tools for listening (“listening to the network”) that are able to intercept a large amount of online public data on social media, forums, blogs, and online news outlets.
Authentic, unfiltered information that can undermine its value; millions of data that, when contextualized, can give you a whole new insight to understand, even more deeply, the market in which your company operates every day and learn more about your target customers.
That’s right, because your market is made up not only of competitors, but also of customers and potential customers who search for your products or services online every day. You must and can know much more about them.
The first mistake is precisely to consider them generically as customers. Each of them has characteristics that led them to seek out your products/services to find the solution to a specific need. But to find out about them you have to implement segmentation criteria . There are a thousand variables that you can take into consideration, just to mention the main ones, here are some examples below:
- Geographic variables: the place or region of birth, whether this area is rural or metropolitan.
- Demographic variables: age, gender, education, employment, income, religion, nationality, marital status.
- Psychographic variables: social status, lifestyle.
- Behavioral variables: brand loyalty, intensity of use of a product/service request, purchasing behavior, price sensitivity, use or non-use of technology.
Of course, the variables that are useful to your company may be only some of these while others may not be significant for the purpose of the survey, which is why each of our market analyses is always tailored to each individual company and does not use pre-packaged schemes depending on the target industry.
Read also: Market analysis? Here is the CMI method
In conclusion
An entrepreneur who thinks he or she already has all the answers about his or her target market probably did not understand the question. And certainly it only takes amarket analysis to realize how much useful and totally unknown information you can get about your market up to that point.
Do you want to discover, before your competitors, the most hidden aspects of your market through online big data?
Contact us now : we are at your disposal!
