Market Segmentation is a key step in truly defining your Target Market. By developing a comprehensive market segmentation, you can determine how to most effectively market your product or service. “Audience segmentation is the process of dividing your potential customer base into subgroups based on a common set of characteristics such as behavior, psychographics, demographics, and customer type” (Petersen, 2019). How can you develop a market segmentation? Do you just take a guess? How will you gather the information necessary to define your segments? Here are a few tools to help you along the way.
First, it is important to remember that identifying your target market is not done so that you freeze out certain groups from your products or services. “target marketing allows you to focus your marketing dollars and brand message on a specific market that is more likely to buy from you than other markets. This is a much more affordable, efficient, and effective way to reach potential clients and generate business” (Porta, 2021).
First, it may be good to look at your current customer base. From this customer base, you can determine a demographic/geographic/psychographic picture of who currently uses your product. Reviewing this information can help you determine where to focus your current marketing efforts. Are these groups who you thought would be using your product when you first developed it? Are you missing a key group of customers who you previously thought you were targeting? Google Analytics can be a great way to compile and evaluate this information. Here, you can even add or remove different market segments based off of your goals. No current customer base due to a new product or service? Look to your competitors. See who their target markets and segmentations are. What can you do to differentiate yourself to these groups that you know would be interested in your product/service? Looking at who your competitors are targeting is a great way to find what sets you apart from the rest.
Another great tool to help you define your target market is to do a complete analysis of your product or service. “Write out a list of each feature of your product or service. Next to each feature, list the benefits it provides (and the benefits of those benefits)” (Porta, 2021). By creating this analysis and compiling this list, you can then match your identified “benefits”, with the groups of people who have a need your benefit would fulfill. This is a great baseline way to develop market segments.
Finally, once you have developed potential market segments and an overall target market, it is important to test your theory. According to Mandy Porta of Inc., this could mean asking yourself questions like:
- Are there enough people who fit my criteria?
- Will my target really benefit from my product/service? Will they see a need for it?
- Do I understand what drives my target to make decisions?
- Can they afford my product/service?
- Can I reach them with my message? Are they easily accessible?
If the answer to any of these questions is no, then it is time to tweak your strategy. Testing your theory could also mean conducting research of how your product or service would perform in the market with these segments. This could come in the form of surveys or focus groups.
Creating a comprehensive target market and market segmentation analysis is key to the success of your product/service. Without it, your marketing campaign has no real leg to stand on.
Petersen, R. (2019, January 27). 6 audience segmentation tools to find customers that need you most. BarnRaisers. Retrieved from https://barnraisersllc.com/2019/01/27/audience-segmentation-tools-find-customers/.
Porta, M. (2021). How to Define Your Target Market. Inc. Retrieved from https://www.inc.com/guides/2010/06/defining-your-target-market.html.
The Mindful Marketer 