What is Target Market Strategy?
Target market strategy is a marketing method used to select a segment of a customer base. That smaller segment can then have marketing resources devoted to it. By using this segmentation strategy, companies are increasing the effectiveness of the customer targeting.
When a company chooses to target specific customers, it aims to increase brand awareness and sales figures. New, untapped segments of the market can be acquired, broadening a company’s reach. Alternatively, the targeted marketing process can be used to try to saturate a market segment you’re this close to dominating.
By narrowing the scope and reducing the number of people that a target market strategy aims to reach, the content can be more specific to that audience. And the more specific the target market strategy is, the more effective it will be.
Target market strategy requires a lot of market research to get started and to be effective. You’ll have to understand your customer base:
- What drives them?
- What are their desires?
- What are their needs?
- What are their fears?
And what language do they use and respond to? Don’t forget to utilize surveys in your market research. Getting the information straight from the source is always going to be most accurate, so go right to the customers themselves.
How to Select Your Target Market?
Once you’ve decided that utilizing a target market strategy is the solution your business needs to increase sales, you’ll need to select your target audience.
There are three main aspects of this method to understand: Segmentation, Targeting, and Positioning. They’re often referred to as “STP.” Once we go over the method, we’ll move on to our actionable steps to get started.
Segmentation
Segmentation is dividing your total market of potential customers into smaller, distinct groups. These groups are the segments.
There are a number of different criteria you can choose from. But once you choose, you’ll be separating your available market into groups based on their similarities and differences.
For example, you might choose “age” as your category for segmentation. Then you’ll need to separate your market into grou[s: maybe you choose 0-19, 20-59, and 60+ as your segments.
Choosing a segmentation principle that highlights how customer needs differ between groups is going to be most effective. This choice will require extensive market research to understand what drives you customers and how you can best tap into that drive.
Targeting
TargetingTargeting is choosing which segments you want to direct your marketing campaign at.
At this point in the process, you’ll need to identify the segment with the most potential for growth, and maybe even the segment with the second most potential for growth. These will be your primary and secondary target audiences.
Positioning
Positioning is developing your marketing materials to most closely align with your targeted segment’s drive to make purchases.
This strategy aims to present marketing content to the chosen target audience that will be most effective. Since you’ve segmented your audience, you can more specifically position your offer to resonate with them. By understanding what drives each segment, you can capitalize on positioning your offer to solve their problems, fulfill their desires, answer their questions, or whatever else would motivate them to purchase your services or products.
Learn more about positioning here.
What Makes Target Market Strategies so Important?
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By targeting everyone with your marketing strategy, you’re less likely to be successful with those campaigns. No matter how many resources a company has, targeted marketing is going to be more effective. It’s also going to be more resource-efficient because you won’t be wasting any time or money reaching people who are never going to buy your product.
Target market strategies also create a positive feedback loop for your marketing efforts. Since you know who you’re targeting with different ads and strategies, you can see what works on which groups.
Ask yourself, “Who responded to which messages?”
The answer should give you a good indication of how to position your next messages or offers to that group.
Tracking and analyzing this data gives your company the opportunity to increase its understanding of the market segments, which then allows them to be more effective in their next marketing campaign.
This information that you can gather using target market strategy gives back to your marketing team is invaluable. In addition to creating more effective marketing the first time around, it will keep getting more and more specific. Just make sure that you track all the information you can, and continue to survey your market segments.
What are the Steps in Creating Your Target Market Strategy?
Now that we’ve gone over the basic segmentation strategy principles, we’re ready to go through the five steps you can take to implement your own target market strategy.
1. Determine Your Present Customer Base
If you don’t know who buys your product, then you won’t know what groups to start with or where there are areas for growth opportunity. You can survey your existing customers for more in-depth information, or you can use any digital information you’ve tracked or have access to for more general data.
If you notice one group of people in particular seems to buy your product the most, then you can target them to increase your marketing effectiveness. And if you notice there’s a group that seems to never buy your product, but you think they should or would with the right information, then you can target them with specific strategies to increase your market share.
And if you don’t yet have a customer base, you can evaluate your competitors’ market.
2. Assess the Feasibility of Target Markets
Determine how much you serve to gain from targeting each specific segment you’re considering. Do you think the effort and cost of a campaign to a specific group will gain enough customers for it to be worth devoting resources to?
A possible growth strategy is targeting segments who engage with your competitors, but they don’t yet engage with your company. Ultimately you want to target segments that you think will realistically start buying your product if they have more exposure to it or information about it.
3. Choose the Most Effective Marketing Strategy
You’re going to want to choose the segment and accompanying strategy that you think will have the most profound effect on your goals. The segment with the most opportunity for growth is going to be your best bet, and you might also want to choose a secondary target segment, too.
4. Identify and Create Buyer Persona
You’ll need to understand the mindset of your target market to create a buyer persona. You’ll need to dive deep. This will involve building out a profile of who you think has been purchasing your product, and who you think would purchase your product in an ideal situation.
What do they want? Can you provide it for them?
What do they need? Do they know they need it?
What are their fears, desires, drives, and more?
You can survey your clients and utilize any data you have, but you might also want to think a bit abstractly and creatively, too. Build out the persona as accurately as you can, and make sure you understand every aspect of your buyer.
5. Analyze Data for KPI’s
You won’t know if your target market strategy has worked if you don’t track data to analyze. Ideally, start with one metric to track for your Key Performance Indicators, then you can add more as you get to understand your progress and how you can best measure it.
If your goal is to increase your revenue, you might first think you need more customers.
But then, after tracking the number of customers you have, you might realize what you really need is more repeat customers, so then you can track that.
Constantly tracking data, analyzing it, and then implementing your findings or what you deduce is going to be essential for this process.
Find more tips on creating target market strategy here.
What are the Examples of Target Markets?
Demographics
Some examples of demographics include age, gender or sex, ethnicity, educational history, income, and more.
There are many different demographics that can be segmented, so the options are nearly endless. The more you understand your target audience, the more you can narrow the groups down based on shared characteristics.
Maybe you’ll find that, for example, middle class families who rent apartments are most likely to purchase your product–so then you can target that demographic.
Geographical Location
Geographical LocationIt can be useful to target different regions for different services. The climate can have a huge impact on a segment’s needs or wants.
Furthermore, you can use geographical location to infer other information about the customers you want to target. Some products are more frequently purchased by people who live in rural areas, while other products are more frequently purchased by people who live in cities.
Would you try to sell snow shovels to residents of Florida? Or would you be better off targeting a different geographical location?
Consumer Purchasing Behaviors
You might choose to go after customers who have made certain purchases before. Past behaviors often indicate possible future behaviors, or at least highlight something about the customer’s needs or wants that you can use to your advantage.
For example, if you’re selling off-road tires, you might target customers who have purchased trucks in the past.
Religious Beliefs and Cultural Traditions
Ideals that people hold about their values, religion, culture, and more can also influence their purchasing behavior. Sometimes companies will choose to target groups based on what values a person holds, which can provide a lot of insight into what drives them.
If you can responsibly tap into people’s belief systems, you can show them more convincingly how your company’s service, product, or philosophy closely aligns with theirs.
If you’re having trouble with any of the steps above, or with the creation of your marketing materials and strategy in general, we’re here to help.
You can rely on our expertise as we guide you through targeted marketing strategy.
Don’t wait. Contact Selling Revolution today!