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Customer Engagement

Roadmap to Target Market Analysis and Strategic Planning

Target Market Analysis and Strategic Planning

What is target market?

A target market also called as a target audience refers to a pool of customers or potential customers to whom the brand wants to sell their products and services. Target market only includes those customers in a market that a company wants to target, it does not involve the entire population of a particular market. Focusing the selling and marketing efforts on the customers in the target market saves the business time and money that would otherwise be spent on customers who are not potential buyers for the company’s products/services.

Target market example

Take the instance of a company dealing with lawnmowers and other maintenance equipment. Only a certain percentage of people in a market would show interest in buying such products. In most cases, this would include adult homeowners. This becomes the target market for the company. Efforts must be made to gather as much information as possible about potential customers. In this case, it includes their age, place of residence, and the type of home they stay in. It is also essential to keep tabs on factors including when they shop, the competitors in the market, and also the type of media consumed by the target audience.

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What is target market analysis?

A target market analysis is a study used to analyze and identify the target customers and their needs. Leveraging target market analysis will enable companies to figure out exactly whom to market to and what to market. Furthermore, target market analysis also facilitates and marketing and communication efforts of the business. It helps identify when and what marketing channels and materials are most accessed by the potential customers of the company. But the question here is – how can this data be accurately collected? One of the best methods to do this is through personal interviews with customers. This provides large amounts of reliable data; the company can consider rewarding customers for their time and response. Another great medium to gather information is through social media. In fact, several relevant stats are available that provides information on the potential customers of the business and their demographics.

Target market analysis best practices

One of the key target market analysis best practices to follow is to focus on data rather than assumptions. While assumptions can provide a general idea relating to the audience’s needs and requirements. It fails to provide the whole picture. Consequently, businesses might lose out on opportunities and they might also invest in campaigns that do not return the desired results. Some ways to collect data for creating a target market analysis and formulating target marketing strategies include:

  • Run social media ads.
  • Track what competitors are doing and focus on their pricing, reviews, marketing positioning, and other market segments.
  • Conduct primary research including online and offline surveys, interviews, and focus groups.

How to do a target market analysis?

Target market analysis is an integral element of any business plan. This is because it is essential to know who the customers are before businesses can plan their strategies. Experts at Infiniti Research have identified six steps that are imperative for a successful target market assessment:

Step 1: Identify the target market

This step in the target market analysis involves identifying the potential customers of the business in terms of their demographics (age, gender, occupation, and marital status) and their needs and preferences. Then gather information that is more specific to the company’s products/services. This includes finding answers to questions such as the products of the company used by customers and how often they replace these products.

Step2: Divide the market

A company’s target market involves several segments. These segments can be based on demographics, geographic location, beliefs and attitudes, and purchasing behavior. In target market analysis, the segments must be divided based on such factors. It helps to reach out to customers more easily and tailor-make products/services to suit their needs.

Step 3: Undertake market research

Market research can either be taken in the form of primary research or in the form of secondary research. Primary research involves collecting information directly through observation or by interviewing the customers. Secondary research, on the other hand, involves gathering information that has already been collected by third-parties and using it as a reference to formulate strategies. Market research makes target market analysis more accurate.

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Step 4: Choose the markets

The next step in target market analysis is to choose the markets the company wishes to serve. The company may choose to serve as many markets as possible provided they are equipped to meet the demands of these markets. While undertaking this decision, companies must also consider the markets in which their competitors serve and the feasibility of operating in each market.

Step 5: Target market projections

Another key step in a target market analysis is to make use of the information gathered from market research to make projections. These projections can be related to who will buy the company’s products and in what quantities. It is also critical to consider the likelihood of repeat or loyal customers and the impact of economic shifts on the target market and sales.

Step 6: Examine the results and communicate

The last step in a target market analysis is to create a draft of the entire target market analysis based on the data collected and see how they resonate with the company’s business plan. This will also help companies to examine different markets backed by statistical data to help in decision-making. Examine the data and communicate it to the key decision-makers of the company.

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Maximizing ROI with an Ideal Target Market Segmentation Strategy

What is target market segmentation?

Target market segmentation involves determining how organizations can divide their customers into smaller groups based on characteristics including age, behavior, income, and personality traits. Product launch and marketing campaigns can be optimized by using target market segmentation strategy to reach out to the right set of customers/audience. Moreover, it also provides better response rates. An effective target market segmentation begins with a target market analysis which will correctly pinpoint the exact group of customers to choose. They help marketers define and understand specific buyer populations and leverage insights to deliver more relevant offers to customers.

Why do you need target market analysis?

Marketing or offering products/services to anyone and everyone will result in reaching out to customers who aren’t interested in your offerings. Thereby, the company would end up wasting its time and resources. Using target market analysis companies can easily determine how much the customers are willing to spend, how often they would purchase, and the strategies to adopt in order to keep up with the changing trends. A good target market segmentation strategy helps companies to maximize ROI and growth of the company. Most target market segmentation efforts are known to fail because inexperienced marketers attempt to segment a mass market based on one or two demographic characteristics. Generally, customer needs and behaviors don’t fit perfectly into one or two demographic characteristics. They depend on a variety of factors that can only be uncovered through a flawless target market segmentation process.

Steps involved in target market segmentation

Undertaking target market segmentation involves a set of steps, which include:

Identify target consumer market

The first step in target market segmentation is to clearly define the market. This means finding answers to key questions related to the customers in the target market. In-depth audience profiling will provide a comprehensive overview of the needs and expectations of the target customers in a particular market.

Divide the market

People attracted to the company’s products or services are likely to share certain characteristics. Identifying and defining these characteristics create market segments for target market segmentation. This step in target market segmentation process will help companies to refine their messaging and communication to specific customers. Developing customer personas and profile will help gather shared traits and consequently hone in on identifying patterns, gain insights into the trends, and bring in high-value customers.

Gather up-to-date and reliable data

Gathering information from third-party sources is one of the easiest ways to collect data for target market segmentation. It helps build a real-life picture of the industry that you operate in, the competition involved, and identify the potential customer base. However, knowing exactly what customers’ need often proves to be a challenging task. Companies must always keep tabs on how reliable their data is with respect to the changing customer needs and evolving market trends.

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Leverage existing resources

Data can also be gathered from existing resources rather than completely relying on information collected from third-parties. Deep-diving into available information will provide insights into the company’s history or the industry, potential customers, and even the market competition. Primary research via directly interviewing customers is also a great source to collect data. Although a little more expensive compared to other methods, primary research gives companies data regarding what the customers really want. They can also provide answers to specific questions related to the business.

Track market competition

By keeping a close watch on the competitors in the market, companies can be well aware of what their products or services are up against and what tactics have to be adopted to compete effectively. Not only can businesses identify untapped customer groups, but also target them in marketing plans.

Marketers everywhere want to use data to implement more modern customer engagement strategies. But they often find themselves fighting obstacles standing in the way of success. Discover how our engagements can help your business.

 

Include analysis in the business plan

Once the target segments are identified using the target market segmentation process, the final step in target market segmentation is to incorporate these different segments into the business plan. This helps make projections regarding who will buy the product and in what quantities. It will also aid in evaluating the possible peaks and troughs in demand.

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Decoding the real importance of market intelligence services in 2019

Expansion is the sign of a healthy business. And with the aid of market intelligence services, business expansion is no longer a distant dream for emerging companies. 

Recruiting more staff, expanding into new markets, and building industry reputation are all exciting developments that come with growth. But in today’s competitive market space, growing businesses face a host of different challenges. As the company grows, business leaders start realizing that there is no “one size that fits all” approach – every new opportunity and problem will eventually start demanding different solutions. What worked a year back may not work this year and may not be the best approach. Identifying and mitigating challenges associated with market entry is essential if the business is to survive. Effective leadership will help business leaders make the most of existing opportunities but leveraging market intelligence services can unlock the doors to a lucrative new market segment.

With the rising pressure to sustain profitability and brand image in the market, companies have started facing the need to outpace their opponents when it comes to retaining and acquiring new customers. There’s nothing more depressing to the stakeholders than slow sales or high competition. Companies of today need to be on their toes and constantly think about ways to attract, serve, and retain their customers. Consumers change with every generation and companies need to be agile enough to serve the market as it stands in any given year. Whether you’re in the healthcare, automotive, manufacturing, or retail industry, market intelligence services are still essential for survival. With that being said, let’s take a look at what is market intelligence below and how it can take your business to the next level. (more…)

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