Understanding the Target Market, What, and How?
You who are a business person would want a business that you run can grow rapidly and provide many financial benefits. To achieve this, we need an appropriate and effective marketing strategy, such as determining the target market.
The target market is a very fundamental term and must be known by every business actor. The target market is a group of consumers who are targeted by the company to buy products that are sold. Determining the target market aims to group consumers into groups with certain characteristics (traits) that are almost the same.
Before determining the target market, the company must first do market segmentation. Market segmentation is the process of breaking down heterogeneous groups from potential consumers into homogeneous (smaller) groups. Segmentation must be done before determining the target market.
Some important things about market segmentation you need to know:
1. Segment Size
Large companies tend to choose market segments that are also large, and vice versa, small companies will choose smaller market segments. It is intended that companies can adjust company targets according to their individual abilities.
2. Segment Growth
Market segments are dynamic so it is very likely to change. Analyzing segment growth must be done before determining the target market. Initially, small market segments could have become a large segment over time.
3. Competition Position
The selected market segment must have great potential to bring profit to the company. For example, by choosing a market segment with a small number of competitors, and has the potential to be profitable. Plus, a small number of competitors will benefit the company’s position in making a profit.
4. Situation Analysis
The company must analyze the situation carefully before determining the target market. The analysis is related to consumers, suppliers, and distributors. Analysis can be done for example by applying the SWOT model (Strengths, Weaknesses, Opportunities, Threats) in each of these aspects.
5. Cost of Reaching Segments
Companies need to consider spending on costs to reach the targeted market segment. If the costs incurred to reach this segment are too high, you should not make this market segment an option. This method will save marketing costs so that it is not wasted.
6. Conformity of Purpose
After the market segment is determined, the company should continue to focus on that segment. As much as possible the company should not switch to other market segments that are not planned in advance, because the risk of loss is quite large.
7. Implementation of Target Market
After the market segmentation process is carried out, the next step is the implementation of the target market. To do this, an orderly and systematic process is needed, which is as follows:
- Develop marketing references to determine targeted market segments.
- Select market segments and target companies.
- Develop products that fit market segments.
- Develop a profile of the market segment that will be generated.
- Add market segment criteria if needed.
- Identify existing market segments.
The company must be careful in conducting assessments and considerations when determining target markets. It is intended that the segment size can adjust the target sales volume achievement and desired profit.
With the target market, the company can obtain several benefits and advantages, such as:
- Place marketing ideas more clearly
- Manage the product so that it is more in line with the target market
- Find and compare available market opportunities
- Manage finances on target
- Creating attraction in the marketing field
Example of Target Market
Assuming you are an entrepreneur in the field of men’s watches, the examples of target markets that you can apply are as follows:
- Products for sale: men’s watches sold online
- Target location: Major cities in Indonesia that can be reached by couriers for a maximum of three working days
- Demographic Target: men in the 20-40 years age range
- Psychological character: get used to the internet and social media, and keep abreast of the latest trends.
Before starting a business, determining the target market is important to know the target consumers. You also have to manage your business advertising if you want your business to continue to thrive. Froggy Ads can help you to advertise your products and services that make it easy for you to manage your target market. In addition, Froggy Ads also provides various types of advertisements that can facilitate you in determining what types of ads are suitable for marketing your product or service.