Week Three: Determining Your Target Market
Have you ever looked into a box of a dozen glazed doughnuts? If you have, you’ve gone through the process of choosing the perfect one that you want to eat, even though they’re all pretty much the same.
But they’re not the same. There will always be the best one. You need to zero in on that doughnut and put all of your effort into making sure it’s yours.
This week you’ll establish who your ideal customer is and find out how many of them there are. The more clearly defined your target market is, the more clearly defined your marketing strategy will be.
Target Market Selection
The target market is the specific group of customers who you want to direct your marketing efforts towards. It’s important to figure out who you want to market to before you actually start marketing. Here are three questions you can ask yourself to select your target market:
- Who’s problem does this product or service solve? As previously discussed, your business should solve somebody’s problem. This will be the end-user of your product or service.
- For example, the type of person who buys a Toyota Corolla is probably the type of person who needs to get from one place to another on a relatively cheap budget. Perhaps, the young professional who finally has a small budget to buy a new car.
- Who is most likely to purchase this product or service? The end-user is probably, but not necessarily, the person who purchases the product. You want to choose the type of person who is able and willing to buy from you.
- For example, Verizon’s BlackBerry Storm allows the user to make phone calls, reply to emails and surf the web. This phone is intended for business people who are on the go or need to stay in contact with their employers. Verizon’s advertising must appeal to business people, more importantly, it must appeal to business owners and managers who buy them in bulk for their employees.
- Who do you have access to in terms of consumers you could reach with your promotions? It doesn’t do any good choosing a group of consumers who would be impossible to market towards. You must have access to them and they must have access to you.
- For example, the ideal consumer for a Subway might be a particular neighborhood in Fort Collins, CO. But that doesn’t mean a Subway in Denver should advertise to them.
In selecting your target market, the more specific, the better. What is their gender, age, location, hobbies, education-level, family status? What do they eat for lunch? What do they watch on TV? Who are their friends?
- For example, the target market for the Toyota Corolla is U.S. young professionals between the ages of 20-29 who have a job with a salary between $30,000 and $40,000.
- For example, the target market for Verizon’s BlackBerry Storm is U.S. small business owners with 20-100 employees who are traveling around the country but need to stay in contact with their managers and clients.
- For example, the target market for Subway franchises is on-the-go moms between the ages of 40-50 who have to shuffle their kids back and forth from the local high school.
You need to be able to describe your target market in one sentence.
Target Market Size
To determine the size of your target market you need to do some research. Start with the U.S. Census to figure out how many people are in your demographic. Then proceed to look up other statistics to narrow down that number to fit your other criteria. Here are three examples of how to do this:
- Toyota Corolla – U.S. young professionals between the ages of 20-29 who have a job with a salary between $30,000 and $40,000.
- According to the Census Demographic Statistics there are about 33 million people in this age bracket.
- Verizon BlackBerry Storm – U.S. small business owners with 20-100 employees who are traveling around the country but need to stay in contact with their managers and clients.
- According to the Small Business Administration there are about 536,000 businesses with 20-100 employees.
- Subway Franchise in Fort Collins, CO – on-the-go moms between the ages of 40-50 who have to shuffle their kids back and forth from the local high school.
Remember, just because you’ve selected a target market and have determined the size of that target market, doesn’t mean that that’s the maximum number of customers you could have. For instance, you’re probably not a mom between the ages of 40-50 but you’ve probably had Subway.
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