Understanding your Market II- Defining your Target Market

You’ve probably heard the phrase “Everyone is not your customer.“, but how do you tell who your customers are? 

Who does your product or service appeal to? 

Who are the people most likely to buy your product or use your service? 

If you cannot answer this question specifically, you are yet to identify your target market. 

In this 2nd part of the series on understanding your market, we will look at defining your target market.  

Why?

Defining your target market simply means understanding your main or core customer base. This understanding is key as it:

• Influences Marketing Decisions. Knowing who your customers are helps you to understand where they can be found, the best-suited marketing or promotions channel, and the type of marketing content that will appeal to them. Your marketing efforts are more targeted and focused toward them.

• Influences your choice of distribution channel. When you understand your target market, you can determine whether they prefer to shop online, in a physical store, or on a 3rd party platform for the type of product or service you offer. 

• Guides Branding Efforts. Knowing who your customers are helps you make design and packaging decisions. It helps your brand-building efforts and influences your choice of branding elements like color, logo, slogan, and so on, that are most appropriate for the target market.

• Guides choice of physical store location. As previously stated, knowing your customers allows you to understand where they can be found which is useful when considering a suitable location for a physical store.

• Influences Pricing. Knowing that your product or service appeals to a specific type of market with earning potentials within a certain range allows you to set and adjust your pricing accordingly.

• Helps in building your customer persona. When you’ve done the work of defining your target market, creating your customer persona becomes easier. You can easily describe your ideal customer’s characteristics, such as the problems they have, their age, income, location, and so on. 

How?

• Analyze your Product or Service Offerings. In doing this, think about the following questions: what product or service do you offer? What problems does your product or service solve? Who has these problems?

• Gather Data. Conduct market research to understand the different customer groups within your industry’s market. You can gather data from different sources like:

• Customer surveys – You can conduct interviews with customers, use survey forms to ask questions, analyze data on existing customers, etc.

• Social Media – Who are the people interacting with your business content online? You can learn more about them by looking at their profiles. Launch a generic or non-targeted social media advert using Instagram Ads or Google Ads just to observe who shows interest in your product or service offerings. 

• Website Analytics – Analyze the data from your e-commerce site to understand who visits it, where they are most often found, what products they are most interested in, their purchasing habits, the timeframe in which they make most purchases, and so on.

• Point of Sale – You can get customer insight at each point of sale, whether on social media, e-commerce, or at a physical store.

• Competition – You can get insights into customer groups by understanding your competitors’ target, and observing the people who interact with your direct and indirect competitors. For instance, analyzing the profiles of those who interact with your competitors’ content on social media. 

• Definition. Start defining your target market by considering factors such as gender, age, geographical location, education, occupation, earning potential, interests, purchasing habits, purchasing motivation, purchasing frequency, the media they rely on for information, and so on.

• Create an ideal customer profile. Create a profile of your ideal customer based on these factors. Your target market should consist of people with a similar profile to what you have come up with.

Case in Point

Let’s consider some growing Nigerian brands and how they define their target market.

1. M.O.T Label: M.O.T Label is a ready-to-wear women’s fashion brand. Their target market consists of contemporary women all over the world who want affordable, functional, and fashionable statement pieces. 

2. Eden Life: Eden Life is a home services application that allows you to schedule food, laundry, and cleaning services. They define their target market as busy Lagos professionals who are hard-pressed for time due to long working hours. They further define their target audience as millennials and Gen Zs, particularly those working in the technology space, such as remote workers, developers, executives, tech engineers, and creatives.  Eden Life is redefining the geography of its target market with plans to expand outside Lagos and Nigeria.

3. Reelfruit: Reelfruit is a fruit agribusiness that produces and sells dried fruit snacks such as dried banana, cashew, coconut, mango, and pineapple, as well as fruit and nut mixes. Their target market is health-conscious consumers. This includes women looking for healthy snack alternatives for their children, health-conscious adults, fitness enthusiasts, and others. This definition of their target market influences their range of products, approach to marketing, advertisement, and promotion to the various customer segments in their target market, their approach to packaging and pricing, their “bundles” strategy, distribution channel selection, and so on.

4. Taeillo:  Taeillo is a furniture and lifestyle e-commerce brand. Their target market is Millennials and working-class professionals with a minimalist and artistic style who are looking for modern, quality, affordable, and ready-to-assemble furniture. 

5. Shuttlers: This is a tech bus ride-sharing service platform in Nigeria. Their target market includes individuals, professionals, and companies looking for smarter mobility options. Shuttlers target entry and mid-level professionals who cannot afford a car but want a stress-free and comfortable mode of daily transportation to work. They also target organizations and businesses that want to provide transportation options to their members and employees, as the case may be. 

As you try to solidify your understanding of your target market, constant reiteration is required. As a business grows, the definition of its target market may change as it discovers untapped markets and customer segments, changing demographics, customer behavior, and needs, changing economic realities, and so on. To keep up with changing realities, businesses must constantly update their definition and understanding of their target market.