The importance of understanding your target market

Importance of understanding your target market

Understanding your target market is vital to the success of your business, so if I was to ask you to describe your target market to me, in detail, could you? Do you really know them, like really?

When running any business it is vital that you know exactly who your target market is. Small businesses, start-ups and new ideas often fail not because the idea or the business is wrong, but because gaining a critical understanding of the real target market is given a low priority, meaning the business or idea isn’t pitched to the right consumer in the right way from the get-go. On top of this, a lack of understanding around the role the target market plays in the purchase process can also add to the problem, resulting in misguided or irrelevant marketing communications that consistently fails to hit the mark.

To gain proper understanding into your target market, there are 2 questions you need to get your head around:  

  1. Who is my target market?
  2. What role do they play in purchasing my product or service?

Let’s take a look at these questions, one by one.

Who is my target market?

In a nutshell, your target market is the person who either purchases or consumes your product. I say either purchases or consumes because it is not always the purchaser who consumes a product – for example children’s clothing or breakfast cereals, company software or dog food.

What role do they play in purchasing my product or service?

Your target market could play one or all of the following roles during the purchase & consumption cycle:

  • The initiator – this is the person who gets the ball rolling with a product or service. For example, ‘we need a family holiday’, or, ‘the kids are out of toothpaste, they need toothpaste’.
  • The influencer – this role can be played by multiple people from family members, friends, service providers or colleagues. Using the holiday example, a key influencer could be your partner, children or even the travel agent. For toothpaste, it will probably be the children who prefer one particular flavour or brand over another.
  • The decision-maker – this is the person who ultimately makes the decision for themselves or the whole family.
  • The purchaser – this is the person who makes the actual purchase. This person may or may not have been involved in any one of the stages preceding the purchase, or they may be the only person involved in the process. For example, if the mother of a household initiates, influences and makes the holiday destination decision, the father may complete the transaction, or the mother may continue on and make the purchase as well. With regards to the kids toothpaste, it will be a parent who purchases the product for the kids.
  • The consumer – this is the person or group of people who use the product or services once they are purchased. In the family holiday example, it will be everyone who goes on the holiday. If it was toothpaste, it is just be the kids.

Understanding the role they play helps you determine how to position your product or service to them and what they need to know. Family holiday destinations will include imagery, cues and sell benefits that appeal to everyone in the family. Toothpaste my focus on the benefits of their product that appeals to the mum and the flavour or special cartoon characters that appeal to the kids. It’s important to remember though that everyone who consumes will be a future influencer should the process for the same product or service be repeated a second time. If the kids didn’t like the toothpaste they will let the parents know and it is unlikely they will ask for it again.

So, why is it important to know who your actual target market is?

Essentially, your target market is what keeps you in business, therefore it is imperative that you are attracting the right consumer to your business. Being too general with who you sell to will see you wasting resources, money and time and could mean that you are underestimating, or worse overestimating your audience and its size.

Therefore, getting your target market right will not only streamline your business it will also;

  • Help you focus on the most profitable consumer and help drive better return on investment
  • Help you tailor your marketing, advertising and communications strategy
  • Help you position your goods or services in a way that appeals to the target market
  • Guide the right brand representation
  • Guide your retail strategy
  • Build a better relationship with consumers

Identifying the right consumer for your goods or service is not always easy and it can change or diversify throughout your company’s life cycle, as a result you need to have in place a way of tracking consumer behaviour so you can identify changes in trends before they have a negative impact on your business.

 

If you need help identifying your target market or its segments, we can help you. Contact us for an obligation free chat.

Image Credits: Tom Fishburne

About Zena Churchill

Zena Churchill is a Director at Max & Buddy Consulting. She has worked in senior level business roles across national and multinational corporations, as well as being a small business owner. Zena is a strategic thinker and brings a practical, straight-forward approach to marketing and social media. She has a passion for training & development running practical business workshops for small business. Zena is a Certified Practising Marketer (AMI), sometimes tutors in Marketing at the University of Wollongong and is a Senior Consultant with Trinity P3.

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