It seems you were typing “Target Market” with the keywords “Business Plan” and Google displayed our article in the top results so you have clicked on the correct link because the following content will bolster you in learning about Target Market in your business plan.
One thing is for sure when you are planning to start up a business or launch it, the first two questions that people ask are what are you selling and what market will your products target so while planning out your business, keep in mind what are you selling and which audience will benefit the most out of it that every business has a target market based upon the products or services it is offering. For instance when a company is selling age-specific (Grade 1-4) school bags, fancy pencil boxes, bottles, lunch boxes, uniforms, and similar products then their market will be parents of school-going boys and girls. Then a brand selling heels, sandals, and feminine shoes will have young females as their target audience.
Just in case you are coming up with a new concept that according to you nobody else has thought about yet, then do proper research as well that whether your idea will increase demand and supply or is a guest for a few weeks.
If the business has a concrete grasp of its target market, it becomes a piece of cake in executing marketing campaigns that are both innovative and imploring enough to reach its customers. Otherwise, if you are new then this article will prepare you.
Let’s throw some more light on defining a target market.
It comprises demographics, psychographics, firmographics, and customer behavior.
We will guide you through each turn-by-turn to give you a clearer picture of the market.
- Demographics :
The shoppers are divided into categories like
Age
Gender identity
Ethnicity
Sexual orientation
Income level
Household size
Education level
Geographical location
The above segments assist in showing a clear picture of business-to-customer marketing efforts.
- Psychographics:
The purchasing of customers is based on their psychological and personal traits like values and attitudes. The buying reveals the purpose behind the purchase.
The frequent characteristics are:
Personal values
Religious beliefs
Opinions
Attitudes
Aspirations
Political leanings
Lifestyle
- Firmographic:
The classification is corporately related showing mutual attributes like the number of employees and their type of industry. It looks like demographics, but it collects data on business instead of people in a below-stated way:
Industry
Location
Size
Status or Structure
Performance
Hence it’s used particularly for B2B marketing.
- Behavioral:
The buying is based on their behaviors revolving around the products or services that when they avail or purchase and how they utilize them every day.
The behavior segment aids the businesses to know more about their customer’s interest and their style of interacting with the business which allows or gives the marketers a chance to also see how they can further improve their product’s effectiveness. This classification aids both B2C and B2B marketing efforts.
The areas that are considered in this one are
Usage frequency
Occasion
Brand loyalty
Benefits needed
We have discussed the target audience categories and whose data is effective for which type of marketing strategy in a business plan, so now you should learn about “Target Marketing Strategies” The approaches vary from the broadest to narrowest and the specific method solely depends on the target market you have planned to cater.
- Mass Marketing:
In mass marketing, the advertisers try to target as many consumers as possible instead of choosing a small group.
The campaigns in mass marketing are crafted in such a way that they attract the maximum number of people in one go to generate a good volume of sales. The distribution of ads generally corresponds to a large amount of old and new products feasible for buying.
In the current time of digital trends, the meaning of mass marketing has expanded. How? All credits go to the arrival of online cookies and of course social media which allow advertisers to create digital marketing plans that result in becoming a great combination of niche and mass marketing. The demographic data has made it much easier to define the market in extremely massive possible ways.
A few examples will help you more in learning about this kind of marketing:
Billboards
One of the best ways to attract maximum eyes is via billboards and which to are placed positioned on major roads so that if you are even stuck in traffic you will see both the brand and the company. In this manner, the mass market retailers hope to get their message across to every location without having any solid data.
Print media ads
Before the internet just completely transformed advertising trends media outlets would distribute newspapers or magazines to everyone. E.g: A soap company would have a great maximum reach when people brought their print ad.
Television ads
Television ads are one of the most recognizable examples of mass media. E.g: A soft drink ad will be repeatedly aired during a big sports event or a show to reach the masses. Advertising the product in such times serves as a golden opportunity to receive maximum attention.
Advantages of Mass Media:
Increase in Brand Awareness
Marketing on such a large scale makes your brand becomes more recognizable. Like when you come across that product in some market, the ad you saw on the billboard or TV crosses your mind and might also encourage you to buy it to see how effective it is.
The aim of this marketing is to show products in front and to drill in the minds of consumers that these exist as well resulting in an increase in volume sales and return on investment (ROI).
Lower costs:
Mass marketing does not cost an arm and a leg therefore it becomes more cost-effective for both the consumers and the manufacturer. Due to the low-cost factor, this approach looks more appealing and pocket friendly to companies as compared to other ways of selling.
Wider customer reach:
As talked through earlier that mass marketing serves as an excellent technique to target as many customers as possible because it leads to high sales with very less research, which would only be necessary if your intention is to attract specific groups of people.
We believe that Mass Marketing’s procedure must have provoked your marketers to take action, but hold on because reading the below disadvantages may urge you to reconsider how you would like to play with your business plan.
Dependence of extensibility:
If the company is considered one of the giants of the industry then without a doubt it can afford mass marketing, but the smaller ones, who are low on the required budget will face problems in displaying their products in front of the masses.
Lack of customization:
Large-scale marketing techniques tend to be one-size-fits-all, which means you lose the opportunity to advertise to more specific groups of people.
Firmer competition from other brands:
Your rivals constantly see what products are you marketing, what methods are being used and where is it placed. Mass marketing serves as a fighting chance for competitors to do better with their products and address specific customer necessities.
- Differentiated marketing:
The marketing strategy where companies create campaigns targeting two or more market segments or customer groups is differentiated marketing.
For example, a retail store will definitely sell a set of different products for different user bases. Now, a single marketing campaign can’t be designed to target all demographic user groups. So in that case, the retail store will create campaigns targeting 2 or more segments of customers that in the particular season will bring in maximum sales ensuring that the store targets relevant but selective segments and at the same time gets good conversions.
Another example is retailers of organic dog food engage the differentiated marketing strategy to reach various audiences, such as animal lovers, eco-conscious individuals, and health-conscious consumers.
Differentiated marketing requires businesses to dedicate more of their budget to the creation of different marketing campaigns so that diverse segments are reached.
It ends up becoming a strategy well-suited to businesses selling goods and services to a target market composed of distinct target audiences.
Differentiated marketing comes forward with a few concepts so scroll down to read
Total Market:
The whole market comprising people who have various characteristics, interests, needs, and preferences to which an organization markets its products and services is considered the total market. It is not necessary that everyone in the market will prefer subscribing to that organization’s products.
Target Market:
A subset or segment of the total market comprising people with similar characteristics to whom a company markets its products or services is the target market. While customers may emerge from the entire market, a target market consists of customers who are most likely to buy what an organization sells
Target Marketing:
The researching and understanding of what a customer wants and their buying behavior, requirements, characteristics, and interests in order to specifically convey the message and prepare the marketing budget for the class you believe will most likely invest in your product or service.
Marketing mix:
The mixture is famously known as the four P’s of marketing for promoting a product or service.
They are
Product
Price
Placement
Promotion
These P’s tell what an organization is offering and is contrived by internal and external factors in the overall business ecosystem and interact densely with one another.
Businesses get to know whether they are successful or failing in meeting the customer’s expectations, how they are connecting with their users, and remain distinct from other brands offering the same products and working on their business plan accordingly.
Brand positioning:
Brand positioning is crafting the company’s products or services to fill up a discrete position in its cut-throat environment and brings about the step-by-step running of each component of the mix.
Positioning statement:
The positioning statement is an honest communication telling about a brand’s character. It should explain why prospective customers should always choose a brand. It is typically three to five sentences.
Now it’s time to go through Differentiated Marketing’s advantages:
- Flexibility to test market segments:
Marketing allows organizations to experiment and dominate previously untouched market segments.
- Becomes more relevant to specific demographics:
Your organization becomes more relevant to specific demographics as this aids you in catering to multiple segments of consumers instead of one.
- Market relevant:
What’s better than becoming the complete solution for the customers? Consumers feel happy when they get everything they want on one platform so this strategy is similar to that joy as differentiated marketing provides the same shopping pleasure because it becomes more relevant in the market.
- Reach and revenue expands:
More customers are reached through this technique. Like when you are the owner of a tea café with many students as your customers you can broaden your consumer reach by attracting commuting people by branching out its offerings. Catering to large mass gives you a chance of improving at your end too as you also find what people want more resulting in better revenue as your work expands.
- Increased market share:
A company can conquer a larger market share by increasing its sales volume and value of differentiated products. As a result, differentiation and market share have a positive relationship.
Market share growth is therefore dependent on a company gaining a competitive advantage.
No don’t think that differentiated marketing just has a happy ending because even this approach gives you a reality check regarding its disadvantages:
- Research and development costs will rise:
The time, talent, and capital required to know about the unique needs of specific target markets are greater than those required for undifferentiated marketing so your company’s research and development cost will rise.
- Inconsistencies across segments:
Inconsistencies in results can occur for various reasons.
For example, Customers may value and require different offerings at different rates and times, causing the results and revenue generated across segments to differ.
- Inability to generate insights:
Variable customer responses may make it difficult to create specific customer insights therefore it becomes difficult to generate insights.
Niche Marketing:
Niche marketing is a highly targeted form of advertising in which businesses boost their products and services to a well-defined, specific, and small audience. This approach is amazing to win brand loyalty so companies must have a proper understanding of their niche.
Consumers in a niche market have their own needs that are different from the wider sector.
Brands divide markets into the following subsections:
Geographic location
Psychographic data (interests, attitudes, and values)
Demographic base (age, income level, gender, education level)
Quality level (premium, moderate, high, low)
Price (high, discount, wholesale)
A company that simply sold handbags would need to appeal to a broad range of tastes and expectations. However, a business selling handbags for new moms that also accommodate diaper bags will catch more eyes.
How can we say that niche marketing is beneficial?
- Develops greater brand loyalty:
Fewer people in a niche audience mean more chances to develop intimate, valuable relationships with clients and many niche customers will become repeat buyers.
- Compete against fewer brands:
The more specialized your business is, the fewer competitors there will be doing the same thing as you. You are already blessed with a unique selling point that no other company could even come close to!
- Better marketing spends:
You will learn about your audience quickly through tools for social media management and refined targeting options. This also shows that your marketing budget is hitting the right places.
However few disadvantages are
- Limited growth:
Since the company is targeting a specific market therefore the growth is limited.
Depending on the specific business niche, reaching target customers or audiences can be very limited.
- High competition:
As you found a sixer opportunity in the niche market likewise your competitor can also come across the same chance. This competition can negatively affect those who are inexperienced or lack the mandatory skills to market their business successfully.
- Higher ROI not guaranteed:
Serving a smaller target market can sometimes make it harder to earn good profits. Serving a niche means fewer customers, which can be quite risky.
With this, we come to the end of this article and hope that you are now well prepared to start your venture according to your business plan, so see you in the market!