Companies constantly work towards building marketing strategies to increase their bottom lines. Businesses use multiple marketing strategies every time, but every company must find a way to identify its target market; this is how the process starts.
You should know your target market to understand your customer’s needs, buying patterns, behavior, and preferences. Target audience is the purpose of your business’s existence – from product ideation, development, packaging, and distribution, your customer base is the one to buy from you.
In brief, businesses understand that they cannot sell to everyone, it’s crucial to come up with a target market strategy. But how do businesses create a target marketing strategy? Keep on reading to learn about the target market strategy, examples, why it’s important, and how to create a target marketing strategy for your business.
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What is a Target Market Strategy?
A target market strategy is a marketing plan developed to increase profits and grow market share by focusing on a small group of people who want to see your marketing message and buy your products and services.
These people are alike in demographics, psychology, and buying behavior. You’ll get your ideal customer avatar when you look closely at a particular market segment and observe people individually.
Is it wise to target a smaller segment from the more extensive market? Absolutely! The more specifically you identify your customers and understand their needs, the more market share and profits you’ll gain.
Executing a marketing plan is costly, and businesses want a bang for every buck. Having a target market strategy in place minimizes the risk of failure or financial losses.
If your target market strategy is well-researched and focused on a smaller segment, you can create;
- Specialized marketing campaigns
- Targeted advertisements.
- Sales predictions.
- Product production predictions.
- Product features and designs.
- Dominate your niche.
- Penetrate the market.
- Claim a more significant market share.
Why Target Market Strategy is Important for Your Business
As mentioned above, a target marketing strategy is vital for profitability, forward marketing efforts, penetrating the markets, and increasing sales.
Moreover, businesses with a target market strategy can quickly reach potential customers and encourage existing customers to continue buying from them. Once a target market strategy is in place, it can be replicated to reach other audiences with similar needs and preferences without wasting time and resources.
Furthermore, it can clarify the brand’s message and refine the product as per customer needs. Targeting a specific market opens doors to online communication by reaching out on social media, where your customers spend time.
The more businesses reach out to their audiences, the more it builds customer trust and brand. Today customers prefer purchasing products that reflect their personality and values.
Therefore, having a target marketing strategy is essential for many progress levels and business continuity.
How to Create Target Market Strategy
Here are some well-sought-out and proven ways to create a target market strategy to increase sales and dominate the target market.
Recognize Your Customer Base
The first step is to understand your current customer base. Depending on their characteristics, needs, habits, and preferences, you want to know who wants to buy from you. Once that is done, research your current customer base for further penetration to add potential customers. Further, you can try to reach other markets using the same information collected from your target audience.
Once you know your target audience, gathering information through opt-in forms and other online data collection methods becomes easy. Startups identify their customer base by learning about their competitor’s markets.
Test Your Target Market
You don’t want to waste your marketing efforts on a customer segment that won’t give you the desired result or, worse, gets you at a loss. Before you plan a marketing campaign, test the potential of your target market.
The best way to do this is to analyze your competition. Check out their occupied market share to develop a percentage of business you can get from that market. Once you understand the opportunities against risk, develop a strong marketing strategy to reach your audience.
Build a Targeted Marketing Strategy
Here are the four best marketing strategies companies prefer using. These marketing strategies are tailored according to the market needs.
- Mass Marketing. Mass marketing can be challenging if the business aims to target everyone as a customer in the market. However difficult it may be, it has its benefits. You have a large customer base to reach as many customers as possible. Companies with generic products such as food, water, and toiletries go for this approach as these are mass-purchasing items that everyone needs daily or are commonly used.
- Differentiated Marketing. Differentiated marketing is used to develop a target marketing strategy. In differentiated marketing, the market is further segmented into targeted audiences. According to this approach, the business targets one or multiple groups/audiences depending on the product market research. For this approach, the company creates marketing campaigns to reach its selected target audience(s) for a purchase.
- Niche Marketing. When a differentiated market is broken into further segments, it’s called niche marketing. Marketing professionals use this strategy to narrow their focus to penetrate a market for a more significant share than their competition. These are highly specialized consumer groups made by combining common traits.
- Micromarketing. Micromarketing is also known as 1-to-1 marketing. It’s a highly narrowed marketing strategy in which the target audience delivers highly individualized solutions based on their purchasing preferences.
Create a Customer Avatar
Businesses create a perfect customer avatar depending on various factors, such as characteristics, preferences, behaviors, lifestyle choices, demographics, etc. This customer avatar is considered the ideal candidate to market and sell products. Marketing campaign prototypes are created and tested, keeping in mind the sample customer. This avatar is helpful for customer profiling, data analysis models, and other references.
Analyze Your Data and Performance
Businesses choose specific metrics before testing data and performance. It helps improve the target market strategies and determines the success of your marketing message to reach the customer group effectively. KPIs (key performing indicators) such as website traffic, web analytics, social community engagement, and advertisement conversions are a few base metrics to improve or change your marketing strategy.
Examples of Target Market Strategy
A target market strategy is developed by focusing on one or multiple characteristics of the customers. Businesses categorize their target audience in the following way.
Demographics
Businesses define their target audience based on age, gender, income, marital status, educational experience, lifestyle, preferences, and employment type.
For example, a company decides to market an educative software application to young students who spend significant time online. The business will build a marketing strategy to target this specific group of students.
Buying Behaviours
Businesses can also define a target market strategy depending on the customer’s buying behavior. It is a quality factor for developing a marketing strategy to increase sales and growth.
For example, a business may focus on customers who spend more time on their websites but leave without purchasing. The company will target these potential buyers to convert them into actual customers.
Location
Businesses can choose a target market in another geographical area depending on the product’s demand. Businesses’ primary purpose is to be profitable, even if it means bypassing location barriers. Doing cross-border business has become easy due to the internet.
For example, if a business makes a women’s clothing brand for post-natal use, the customers can purchase the product online from another part of the globe if the company can deliver on time.
Beliefs & Values
Businesses often target customers who share common beliefs or values. These audiences buy products based on their faith, cause, religion, or culture. Similarly, the company makes a strategy to show that its product is built on sharing the same values as theirs.
For example, a company makes vegan products because its target audience supports the cause of condemning animal slaughter.
Concluding Thoughts
Any target market strategy has a few basics, which include knowing your potential customers’ needs, their buying patterns, their purchasing power, etc. Targeting a specific market is one of the most effective marketing strategies in the modern-day business spheres.
