Understanding Your Target Market

In the inaugural edition of the Alder SME Practice articles, we discussed the 5 phases of business creation. In this article, we will focus on understanding your target market and examine some of the things you should know about your target market.

In the simplest terms, your target market is a group of people who you want to buy your products or services or who you have identified as purchasers of your products or services. They are the segment of society that you have determined need or want what you are offering. However, defining your target market is not enough; you also need to understand their sociology. Here are some things to consider as you map out the sociology of your target market.

1. Age

Knowing the age or age range of your target market will unlock crucial information. Their age will reveal the generation in which your target market was born and the stage of life they are in. This will provide insight into their way of thinking and the types of products and services they will seek out. It will also inform you on how best to communicate with them and provide insight into their interests and places of association. For example, a 21-year-old individual is a member of Generation Z, and generally, the best medium to communicate with Gen Z is through social media.

2. Income

The income or income bracket of your target market will provide insight into their ability or inability to afford your product or service. With this knowledge, you will gain insight into the best pricing strategy to adopt. Of course, the price will also be determined by the nature of the product itself, e.g., whether it is an everyday essential item or a luxury item. An everyday essential item targeted at the middle class will need to be within their range of affordability, for example. 

In addition, you need to consider if your target audience is upwardly mobile. Are they actively seeking to increase their income? Based on their choices today, where will they be in 5 years? The answers to these questions will help you determine your product placement and future pricing strategy. Will you need to adjust your prices to reflect their new income bracket?

3. Lifestyle

The lifestyle of your target audience will determine how your product or service fits into their lives, if there is a place for it. It is important to develop an understanding of the interests of your target audience. What do they do for leisure? Where do they shop? What kinds of products are they buying? Who do they engage with? What are their spending habits? What do they consider before making a purchase? Where do they eat, and what do they eat?

Answers to these questions will provide valuable insight into the behaviours of your target audience. This will help you better position your product or service to appeal directly to your target audience.

If you want to develop a deeper understanding of your target market, email brief@alder-consulting.com.