Target Market

The #1 issue we find most businesses have, is knowing exactly who your core customer is, and then focusing your resources to provide profitable solutions to meet their demands. It's the #1 challenge.

But, businesses that are able to do this effectively will find exponential success, and those who don’t, well they will find themselves in an endless circle of struggle.

In this series, we are going to show you step by step strategies on how to target your most profitable customers, provide you with tools to identify emerging trends in your industry, and show you how to provide your customers with exactly what they are looking for.... all while taking your business to the next level in doing so.  

It's All About a Target

Let’s say you have the perfect solution that you absolutely love. You love being apart of this type of business. You have all of these goals and aspirations about how much youwant to make and what you want….. but the business fails. What went wrong?

Notice how many times I used the word "YOU". The issue is business is about your Target Market, not you. After all, they are the ones paying your bills! At some point someone needs to bring money into an organization. If you own a barber shop, someone needs to pay to get a hair cut. If you are an engineer, someone needs to pay for your services. If you are a church or non-profit, someone needs to make a donation to pay the bills. 

 Business is not about creating the products and services we want - that is called a hobby. Business is about creating products and services our target market sees value in and is willing to buy for a profit. 

What is a Target Market?

Our resources are limited, so we need to define exactly what groups of people who are most likely to use our brand. Our target market are those individuals who are MOST likely to buy from our brand. They are what we call the path to least resistance, meaning they will take the least amount of effort to attract for a profit. Our target is willing to buy our products and services at a price that delivers a profit, and it is a group that makes business sense for us to focus our efforts. 

Now will there be people outside of your target market who will buy from you... Absolutely, let them in. The more the merrier.  When you define a target market, we are not saying you can only sell to this group of people. You will sell to anyone who is willing to do business with you. What we are saying is what group is most likely to make a purchase, what group will be most profitable, and let's focus our resources on these individuals as we grow our business. We define a target market to maximize our limited resources and focus on the path of least resistance.    

Target Market - The group of customers who are MOST likely to make a purchase from your brand. 

PLEASE NOTE: In marketing, we always have many ways to say the same thing. So if you hear the terms target, target market, target audience, core audience..... we are referring to the same thing.

Why do we Need a Target: Real Life Example

So let me ask you a question:

How many of you would love to sell your products and solutions to everyone that existed? Absolutely you might say, but we all know this is not realistic .... Why?

• Not everyone wants the same thing. What works for one group may not work for another. 
• Not everyone could afford the product.
• Not everyone could have access to the product. Listen, there are some foods in Italy I would absolutely love to have daily, but I do not have access to them because they are only available in Italy.

 Here's another question: How many of you would love to blast your brand all over every media outlet possible? Why is this not realistic?

• Company resources are limited.
• Cannot afford to be on every platform, every hour of the day. Even Apple has a limited marketing budget.

It is important to define your target market because you need to maximize your limited resources. 

Let’s say you open a restaurant, and you want it to cater to everyone

• You vision an upscale Italian restaurant that you would take someone out for a date night.
• But you also want a section to be a casual Mexican restaurant that caters to families with young children.
• Finally, you want it to also be to be a loud, high energy lounge that young adults would attend on the weekend.

 So you incorporate all of this into one restaurant. What does the menu look like?

• On the 1st page of the menu you have authentic Italian food.
• On the second page it has Mexican.
• Chinese is on the Third.
• American Pub food is on the Fourth.
• Sushi is on the 5th.

 At first you may think this is great - but is it?

• If you are a loud Lounge, you will satisfy the young adult crowd, but would you go there for a fancy date night or family meal…… nope.
• If you are at a fancy date night, would families with small children want to go there at night …..nope.

But you said you want to appeal to everyone:

Different groups of people have different needs.

• These different needs often conflict with one another.
• So in your attempt to satisfy everyone, you end up satisfying no one.

 Now let’s talk about cost. How much food inventory do you need to satisfy all of these menu options?… ALOT. How much storage do you need to fit all of this food? How much food will go to waste because it is not being used? How much do you need to spend to promote all of these sections on your restaurant, what does the ad even look like?

Your resources are limited, you do not have the funds to cater to everyone.

• If you create solutions outside of your core target, you could chance losing profitability.
• Not only do you create a product that no one wants, you create a business model that is very costly.

 There’s one more reason Targeting is so important. Let’s say you walk into Walmart to buy a watch, you are expecting something inexpensive, something that works, and will get you by. This is the Walmart brand. Now Imagine you go to Walmart ……and instead …….all you see is......High fashion name brand watches. All watches are $3,000+ because Walmart is now trying to attract a high end buyer. Are you buying a watch - NO! - but why?

When you go to Walmart you expect a cheap watch that works well, this is their brand. Would high end buyers even go to Walmart for a watch - no because their needs are not in line with the Walmart persona. So in Walmart’s attempt to gain high end buyers, you’ve confused your brand and turned off their core business.

If you try to attract everyone, your brand loses focus.

• It becomes too complicated, and you end up confusing your core audience.

Common Targeting Traps:

This why it is so important to identify who your target audience is. Here is a list of common targeting traps that can end up hurting your business:

1. Not understanding different groups of people have different needs.
• These different needs often conflict with one another.
• So in your attempt to satisfy everyone, because of conflicting needs, you end up satisfying no one.
2. Your resources are limited, you do not have the funds to cater to everyone.
• You cannot afford to advertise to everyone, nor make solutions for everyone.
• If you cater to groups outside of your core target, you spread resources thin risking a loss in profitability.
3. Trying to attract everyone
• Your brand loses focus if you try to be everything to everyone; no one will know what you are.
• It becomes too complicated, you end up confusing your core audience, and possibly loosing them.

So how does Targeting work?

Let's look at 2 coffee brands: Starbucks vs Dunkin

Both coffee, but different targets:

•  Starbucks
•  Premium coffee drinkers ages 16 to 70, often looking for a European cafe experience.
•  Dunkin’ Donuts
•  Workers 16-70 on the go who want a quick, good cup of coffee at a reasonable price.

Notice the conflicts between the two targets (and see why we need completely different experiences):

•  One wants a premium cup of coffee, the other wants coffee at a reasonable price.
•  One wants quick service on the go, the other wants a true caffe experience.

Jeep vs Smart Car

We can see the same thing in the car industry.

•  Jeep
• Car buyers who want a spacious, rugged SUV for an adventurous car driving experience.
•  Smart Car
• Eco cautious car buyers who want a vehicle that is fuel efficient, small and compact, and lightweight.

Both car buyers, both looking for something completely different. 

Strong Targeting Strategy

So what does a strong targeting strategy look like?

1. Clearly defines exactly who your target market is.
   1. What group of people are MOST likely to purchase your products and services.
   2. What group of people are the path to least resistance.
2. Fully understand what your target wants, and is willing to pay for.
   1. If you provide what your target is willing to buy for a profit, you will always be in business.
   2. Establish ways to receive feedback from your target to stay on top of emerging trends.
3. Focus your resources on serving this group, do not worry about everyone else.
   1. Resources are limited, stay focused on your target.
   2. Create enticing solutions that fit their needs.
   3. If people outside of your target find value and buy from you, this is a bonus.

Target Market Recap 

• • Your resources are limited, who are the core group of people who are MOST likely to buy from your brand
  • Path to least resistance - these are the easiest customers to obtain
  • You are willing to pay money to attract this group because it will result in a profit
  • Your goal is to then focus your efforts to create profitable solutions and messages towards this group

So How do you define your target market? 

The SUCCEED Business Strategy provides you with simple to follow, step by step guides on how exactly you can develop an effective targeting strategy to help grow your business. Click here to learn more!