Define Your Target Market

As a kid I did a bit of target shooting, mostly .22 rifles and the odd air rifle. As I grew older I did more, joining the school’s clay pigeon shooting club and later firing the GP rifle in the cadets. Finally I joined (briefly) the archery club at University.

One thing that struck me about every newbie who joined the clubs was that they all knew, without being prompted, that they were supposed to aim to hit the target and ideally to hit it in the centre.

So why, if we all instinctively seem to know to aim a gun (or bow and arrow) at a target do so many businesses, fail to aim their marketing at a target market? If you’re guilty of that, or don’t know what a target market is, read on.

The definition of a target market is: the specific group of potential customers at which a business aims its products and services. You goal as a marketer (or entrepreneur doing your own marketing) is to work out who you are aiming your product at and to use demographic information such as age, income level, or interests to precisely target a segment of the market that is “everyone”.

Why do you need to identify your target market?

The reason you should identify your target market is that doing so allows you to aim your marketing specifically at the target market. Typically that allows you to do less, but more highly targeted marketing (i.e.: send out fewer letters, make fewer sales calls and so on) which saves you both time and money. Both of which are limited resources in the typical small business.

For example, when I started my first business in web development, we set out to target every business within 30 miles of us. Which was a lot of businesses. Subsequently we wasted a lot of time and money marketing to businesses that were not really the ones we wanted. Even when the marketing did “work” it generated leads for business that we didn’t really want, i.e. they were more graphic design oriented than the software development we had expertise in.

How to identify your target market

There are a number of ways to do this, but my preferred method is to try and write a description of the members of my target market. What we eventually came up with was a more precise description along the lines of:

Established businesses turning over in excess of £100K. These businesses already have a website and a corporate brand. They now need to add some bespoke or customised off-the-shelf software to the site in order to provide additional functionality.

Ideally these businesses will be based within 30 miles of us.

We created this description by both describing who we thought we could help and looking at the customers we had for and picking out the ones that had been profitable and enjoyable to work with. This more precise description of our target market allowed us to focus our marketing strategy, making it more cost effective (in terms of both time and money).

Once you’ve determine your target market you can them look at segmenting that market. In our case we broke our market down into two key segments: resellers and direct customers. Resellers were graphic design, branding, PR and marketing companies that were likely to be working on projects that would need our technical expertise. Direct customers were customers we would target directly, specifically those likely to be deploying a web based application but who were unlikely to have a full time technical team on board.

Multiple target markets

Don’t feel that you can only have one target market for your business. We also identified a number of other target markets that we’d have some level of success in and following some profiling of those target markets developed unique offerings and different marketing strategies for those markets.

As another example consider McDonalds restaurants. In the beginning McDonalds target market was those wanting a hamburger and fries. Nowadays however McDonalds has a number of target markets. It targets the breakfast market with its breakfast menu and it’s recently begun trying to take a piece of Starbucks target market by offering coffee and cakes during the day. In turn Subway has been eating into McDonald’s original target market by offering a lunchtime alternate. Look at McDonalds, Starbucks and Subway and you’ll see how they’re targeting their marketing. You should be too.

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