A SIMPLE GUIDE TO UNDERSTANDING YOUR TARGET MARKET AS A BUSINESS OWNER

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Time and again, I have seen and researched businesses whose products do not yield the expected results. Why do you think such occurrences happen?

From my research, there may be a couple of reasons why it happens. Of all the reasons, the most striking is that they misunderstand their target market. 

It becomes a challenge when a business owner does not understand the dynamics of his customers and how to best bring value to them.

This article is meant to bring to your consciousness the dynamics of understanding your target market as a business owner, its importance, and its operations in business planning in their simplest form.

Also, I hope that by the end of this article, you'll see the need to do more research on your target market for better efficiency and productivity. With all these in mind, let's get started!

What is a Target Market?

A target market refers to the people who are interested in the product or service that a company offers. 

So, in a more personalized form, a target market is the group of individuals who will likely  purchase whatever you're offering—a product or service.

Understanding Your Target Market

Before you introduce a new product or service into the marketplace, it is very important that you take the time to do market research. 

Conducting market research is the key to the door that opens you to a world of success in business.

You cannot just get to the marketplace and then dump your products at the feet of supposed customers—who, by the way, you haven't known whether they're interested in what you're offering or not.

If you do this, you might as well close your business because it won't go well. But I'm certain you won't make such a mistake, right? 

So to avoid this kind of unnecessary loss of products and services, you need to understand your target market.

Some business owners often make the mistake of generalizing the reach of their products or services. The truth is, even the most generalistic product like Coca-Cola is still not for the general global audience.

There is no one business product that solves every problem and appeals to everyone—not everyone will be interested in your product(s), and that's a fact. 

Hence, understanding your target market means you are able to narrow your market research to those who need your product or service, their demographics, age, gender, and other factors that can help you.

Another way to help you understand your market is to segment it.

Segmenting your larger target market into further smaller groups will give you a better understanding of your customers and the best strategy you can use to add value. 

It's also important to know the four common types of segmentation that can help you understand your target market. They are:

I. Geographic segmentation, which is based on the location of your customers, such as state, city, or even their street addresses.

II. Demographic segmentation, which is based on the race, gender, and age of your customers

III. Behavioural segmentation, which is based on how customers use products and services and the benefits they receive.

IV. Psychographic segmentation, which focuses on the lifestyle, values, attitudes, interests, and personalities of your customers

Having segmented your target market into these different segmentation types, it becomes easier for you to know who your customers are and how best to reach out to them. 

To reach out to your customers effectively, you will need to develop a tailored marketing and sales strategies that will help you get your products into their hands and help you make more profit, respectively.

The Importance of Understanding Your Target Market

As earlier discussed, many business owners find it difficult for their products to succeed because they've not been able to identify their target market. 

Though we've looked into what it means for you to understand your target market, we'll also be discussing some of the top reasons why it's important for you to have a solid understanding of your target market. 

Some of the reasons are:

1. Product Description

One of the reasons you need to understand your target market is so you can tailor your product(s) to meet the needs of your customers. 

A well-defined target market will help you give your product a proper description. 

Your product must be able to answer the different questions that your customers may have concerning it. 

A clear understanding of your target customers will also help you to clearly define your purpose for entering the market in the first place.

2. Managing Expectations

When you see an ad for a product or read through the information on a product, what you notice is that you begin to build expectations about what you will benefit from product. 

As a business owner, another reason why you must understand your target market is so that you can effectively manage the expectations of your customers. 

The fact is, your product is designed to solve a problem; this solution is what your customers look forward to when they purchase your product. 

You need to state clearly the extent of the effect of your product. 

When you do so, customers with very high expectations will know what you offer and will not end up questioning the effect of your product since you've clearly stated it.

3. Makes Advertising Easier

Imagine your target market is women and their footwear, and then you run ads in a sports magazine. You know you will not be making the best decision by doing that, right? 

When you understand your target market, you will be able to effectively carry out ads that will yield results. 

What this means is that you need to know the kind of magazines or news papers your customers read, the entertainment they indulge in, what social media platforms they use, and what makes them buy your product/s. 

Based on your findings, you'll be able to align your message to suit their needs and create a lasting impact on them.

Target Market for Business Planning

When making plans and conducting research for your business, having a well-defined target market is really essential. 

Below are 5 areas in business planning where an appropriate target market is a pillar to a successful business.

1. Simple Feasibility Study

You need to test whether or not your business will have impact in the marketplace. The feasibility of your product in the marketplace can be determined by carrying out a simple feasibility study. 

This grants you access to knowledge of the buying habits of your customers. Imagine selling a baby item to a male college student. 

The idea is dead on arrival. So your target market is essential to determining whether or not your idea will see the light of day.

2. Conducting Market Research

Another area in business planning where your target market finds relevance is when you are conducting market research. 

Your market research is done, so you can identify your customers. Once you've successfully identified them, you are ready to introduce your products to them. 

You'll save time and money that would otherwise have been wasted.

3. SWOT Analysis

A SWOT analysis is able to identify the strengths, weaknesses, opportunities, and threats facing your business. 

All these parameters hinge on your target market and how they respond to your products. 

When you can effectively determine and track all four parameters that surround your business in relation to your target market, you can take the necessary actions in those areas.

4. Business Plan

A good business plan reveals your mission—why your business exists—and your target market—who your business was created for. 

These two major concepts form the foundation of any business. Your business plan will not make sense if it does not align with the needs of your customers. 

The effectiveness of your business plan depends on reaching your customers and making an impact.

5. Marketing

This is another crucial area where you have to get it right. Your target market informs all your marketing strategies, as we've earlier discussed. 

Having the right marketing strategies to bring your product to your target market is very important. 

You do not want to write a message meant for your professor and then giving it to your colleagues—you know it's a waste of effort. 

So, the message that is being passed through different marketing strategies must align with the needs of your target market.

Conclusion

When it comes to meeting needs and creating value, you must pay close attention to your target market—without them, your business will not exist. They form the foundation of your business and are also determinants of its success or failure. 

With the information you have at your disposal, I'm certain you'll go back to the drawing board to make changes when the need arises. Also remember that when your business goals align with meeting the needs of your customers, your business will definitely succeed.