Who are you selling to? Success depends on a focused and detailed definition of your core audience. In addition to providing lists of demographic and psychographic attributes for building a customer persona, this course includes tips for developing your own business-specific market characteristics, with advice specifically for B2B businesses and companies operating across international borders and cultures. You can also access methods for ensuring that the target market you pinpoint is consistent with other elements of your go-to-market strategy, from acquisition marketing channels to pricing and promotions. The opportunity to apply the tactics in a workshop exercise empowers you to develop a target market definition unique to your business and in alignment with your startup goals.
This course was created by EntrepreneurNOW. We are please to offer this training in our library.
- What is the "everyone trap"?
- What do investors look for in a target market?
- Defining the demographics of your target market
- Leveraging psychographic profile information
- Uncovering business-specific market sizing indicators
- How many target markets to focus on
- Impacts on your go-to-market strategy
Skill Level Beginner
- So what's a target market, anyway? Essentially it's just a group of customers with a certain profile that are ideal for your products or service. That's what's most important. Now, you're going to use your target market, you're going to weave it through your entire business strategy. It's going to impact everything that you do. So a couple of questions that I want you to ask first. Who's going to be most likely to buy my products or services? Who are the, what does that target group look like? Who's going to be most willing to pay the price that I'm going to charge? Who will understand and appreciate what I'm delivering in terms of my products and services? And that's really what's important. Target market breaks down into two different groups. It breaks down to demographics and psychographics. They're two different types that we use to define our target market. Demographics, pretty easy. Age, income, occupation, geography. We're going to go through those. Psychographics are a little bit more touchy-feely. They're about personality, beliefs, values, lifestyles, things such as that. We're going to define attributes in each one of those categories and that's going to make up our target market. Supercuts. If you're not familiar with Supercuts, they cut hair, hence the name Supercuts. Their target market is parents of kids age four to 12 with household incomes under $50,000 where low price is key. Lexus, and if you're not familiar with Lexus, it's a car company. They are targeted at professional men and women age 35 to 64 who value quality and image. They're higher income earners and they value quality over price. And how about Rolex? Rolex is targeted at professionals. They're well-educated, college-educated, white collar men between age 45 and 64 years old. They're living in or near a major metropolitan area and they have incomes over $200,000. So that gives us a sense of just how, at a very high level, how target market is defined for these varying companies. The big mistake that I see a lot of entrepreneurs make is what I call the everyone trap. The everyone trap is that my entire target market, everybody in the world can use my products or service. That means that everybody is in my target market. And I say to that, really? In fact, no, that can't be the case. You can't talk to the entire world. You can't talk to everyone. Your message will not resonate. It won't make sense. It's not a very good strategy overall. Now, let me use an example that is kind of very common, that everybody uses a toothbrush, right? But yet, is everybody the target market for toothbrushes? Absolutely not. In fact, there are different types of toothbrushes. There are really cheap toothbrushes that are 99 cents. There are more sophisticated toothbrushes that vibrate in your mouth that might be, like, $10. And then there's these super expensive toothbrushes that are two and $300, and each one of those has different targets, right? So it's very interesting. Now, add one other layer into this, which is who actually buys the toothbrush in the family? Typically moms are the ones that are going to buy the toothbrushes in families, so therefore she might be more of the target market than other folks. So we can start to carve out different types of products for different customer groups, and within that, who's actually going to buy those. That starts to define who our target market is. So when you try to speak to everyone, you actually end up speaking to no one. Nobody is, that message is not going to resonate with anyone out there. So you don't want to do that. You're much better off talking to a specific group of people with a specific message. So let's take another example of McDonald's. So one might say everybody goes to McDonald's because everybody wants inexpensive food. Well, in fact, not everybody wants inexpensive food and not everybody likes McDonald's, not only because maybe they're not as healthy as you might want, but maybe the idea that their one, two, or $3 menu just doesn't resonate with people because price is not my biggest determinant in terms of buying food. I might value healthier alternatives and more expensive food over just going to McDonald's. In fact, personally, I don't go to McDonald's that much, if at all, because that doesn't resonate with me. That messaging doesn't mean anything to me, right? So that's what I want you to think about for your products or services, as well. It's not always price or other things that might resonate to everybody out there. By defining your target market, it doesn't necessarily mean that you're excluding people, that these people will not buy from you. That's not what we're doing. What we're doing is we're defining a market in such a way that says here's who I'm speaking to, here's who I'm going after. It doesn't mean that other people won't come in outside that target market and buy from you. And that's something that's really important for you to understand. It might ease a little bit of your worry about narrowing down your target market to something that's meaningful. Otherwise you're going to want to keep blowing it out just like all the other entrepreneurs. You want to keep making it bigger and bigger. What we want to do is we want to get down to something that's reasonable and that I can speak to my target audience. Instead of speaking to everyone, I want you to speak to someone. This is what I want. I want you to hit the bullseye right there. That's going to resonate with your target audience. So you've got to narrow that down and speak to that individual. Nike doesn't sell to everybody that has feet. That's ridiculous. But in fact, they have a much more focused target market. Their market is about 18 to 55, people that generally are more affluent, have better incomes is what their target...