One mistake some companies make is they don’t take the time to figure out exactly who their target market is. If a business can hone in on exactly who their products are the best fit for they can more wisely spend their advertising dollars and get a better return on investment for their advertising. By knowing what segment is the ideal customer will also enable the business to make more sales.
What exactly is market segmentation?
A target market is the potion of a population that could best benefit from your product or service. In order to best find your target market you have to understand market segmentation. A market segment is a division of a market which is comprised of persons or entities with one or more common interests that create demand for a product or service. The demand stems from characteristics such as function or cost. In order to be a market segment it must meet all the conditions of the following: It must be different from other market segments, it is uniform within its own segment (universal needs), and it reacts correspondingly to conditions within the market, as well as be reached by market intervention.
Finding a target market through demographics
The most common demographics companies use to identify a target market are as follows:
• Family size
Other common factors used to find a target market include the following:
• Loyalty to particular brands
• Needs which are desired to be fulfilled
• Activity, Interest, Opinion
The two most common methods used to find out more about customers of a product or service are surveys and focus groups.
Surveys are probably the most economical way to conduct research into your customers or potential customers and finding a target market. Surveys can be conducted online, through mail, in person, or by phone. If it is economically feasible it can be beneficial to offer some sort of compensation for people to complete your survey.
Focus groups are a lot more involved. These involve gathering a group of your customers or potential customers and interacting with them. They can give feedback on the products or services as well as feedback on things such as any potential packaging or advertising concepts that you have or plan on having.