Defining a Target Market — Creative License Business Consulting

When you are preparing to launch a new business or product, one of the first steps you should take is defining a target market. It is one thing to release a business, product, or service and although everyone may benefit from it, there is still a large chance that a select group of people will benefit more or be more enthusiastic about purchasing from you. This is what your target market is.

But what if everyone really can benefit from your product or service? There are some product lines that benefit the great masses such as life necessity items, for example clothing, water, etc. However, even these items have been separated and segmented to meet the needs of specific groups of people. There are hundreds of types of bottled waters diversified by the water source (mountain or spring), bottling type (plastic, recycled plastic, glass), or special features (flat or sparkling). So even a basic necessity such as water has been differentiated to meet the needs and preferences of unique target markets.

Now, once you define your target market, you are able to tailor your messaging, product or service features towards that select group. Think of the 80/20 rule. Twenty percent of your specified market will maintain over 80% of your business through purchase, repurchase, and ambassadorship.

So how do you define your target market? Here are some questions to ask yourself to begin to identify and narrow your target market.

What problems do you solve?
Who would benefit from it the most?
For New Businesses – Who did you design your business to serve?
For Existing Businesses - Who is your current customer base?
What existing businesses are your largest or closest competition?
Who is their current customer base?
What are differentiating demographic points of your customer base versus your competitors? What is the same?
What are your target market’s psychographics? (Where does your target market spend their time? What interests do they have?)
Evaluate your decision. Does your target market have a proven propensity or willingness to purchase your product or service?

Once you answer these, begin to create user profiles of your target customer. Be sure to read our article on the Difference between Demographics and Psychographics. We’ll continue to share more information on market selection as well.