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 audiences 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.
Steps
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 the information that is more specific to the companys 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 companys 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 onsuch 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: 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 companys 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 companys 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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