The target market is an important term you must know as an entrepreneur, where you must be able to determine the target market first before marketing the product.
In determining the target market, the company must first segment the market by grouping consumers into groups with almost the same characteristics.
Determining the target market is important because the company is not able to serve all consumers or buyers in the market because of the variety of needs and desires. Therefore, the company needs to identify which part of the market it will serve as the target market.
What is a Target Market?
Before knowing more about the target market, you must first know what the target market is. The target market is a group of consumers who are the target of the company’s approach to buying the products it sells.
In short, the target market is the group that will be served as consumers. The target market usually has almost the same age, nature and character.
The Importance of Determining the Target Market
Why should you determine the target market? What benefits will you get? Below are some of the things you will get by determining your target market before starting a business.
- Placing marketing ideas more clearly
- Organize products for the better.
- Find and compare market opportunities.
- Grouping the budget you have appropriately.
- Creating traction in the field of marketing.
- The company will be in a better position.
Pay attention to this before determining the target market
Before determining the target market, there are several things you should pay attention to. Check out his review below.
1. Segment Size
Pay attention to the size of the segment to be addressed to decide whether the segment is promising enough to continue or not. Do not target the size of the segment that is too large or broad.
Generally, large companies will tend to choose large segments and vice versa, small companies will choose smaller market segments. The goal is that the company is able to adjust the company’s targets to their respective abilities.
2. Segment Growth
Analyzing the growth of the segment is very necessary before determining the target market. Pay attention to the growth of the targeted segment to see the possibility that the business will develop in the future.
Although the current segment size tends to be small, it is possible that the segment will grow to be large in the future. Basically, a small segment is a potential market segment.
3. Situation Analysis
Do a thorough and thorough analysis of the situation before determining the target market. Analysis of the situation relates to consumers, suppliers, and distributors using a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats).
4. Company Resources
Before determining the target market, try to pay attention to the resources the company has. If the company’s resources are obtained from cooperation with outside parties, then you must be careful. Because the benefits and risks are shared.
5. Available Funds
Pay attention to the funds provided by your company, if the company provides a small amount of funds, don’t take the risk to determine a large target market. Try to balance between funds and the target market that is the target goal.
6. Appropriate Purpose
After determining the market segment, the company should stay focused on the segment. Try not to switch to other market segments that were not planned in advance to avoid the risk of experiencing losses.
What is an Example of a Target Market?
Below, we will provide an example of a target market. For example, you are an entrepreneur in the field of women’s clothing, then an example of a target market that you can determine is as follows:
- Products sold: women’s clothing sold online.
- Target locations: big cities, such as New York, London, Jakarta, Tokyo, Moscow, Berlin and others that can be reached by couriers a maximum of 2-3 working days.
- Target Demographic: women aged 17-30 years who have income above 2 million per month.
- Psychological Characteristics: familiar with the Internet and social media and following current fashion trends.
The importance of determining the target market is indeed one way to do it before starting a business. In addition, you also have to manage business finances if you want your business to continue to grow and develop.
5 Effective Ways to Determine the Target Market for SME Business
The following 5 ways to determine effective target markets that SMEs or SMEs can do will be reviewed by the Actively Share blog. Read to the end to understand it.
The problem that is often faced by SMEs or SMEs is not being able to determine the target market correctly.
Determining the target market is very important to start a business and get good sales deals.
Where, you must know who are the consumers who are the target of the business.
So, before starting a business, try to know your exact target market.
The target market itself is an activity to group people based on their segmentation.
From this segmentation, you can process the data obtained and determine which segment best fits the characteristics of the business you are building.
Determination of this target market aims to direct marketing activities to certain consumer groups so that marketing is in accordance with their character.
5 Ways to Determine Effective Target Markets for SME or MSME Businesses
Below are some effective ways that you can do to determine the target market for your SME business.
Determine Who Your Customers Are
Once you have a product idea that you will offer to consumers.
Next, determine who your target customers are.
Determination of the target market can be determined based on several segments as follows:
This segmentation is a grouping of target markets based on location or region.
Segmentation whose purpose is to find out the relationship of the target market, with the hope that each region has different needs so that it can be matched to the characteristics of your product or brand .
For example, selling fertilizers in plantation areas.
This segmentation includes neighborhood, postal code, area code, city, province and region.
Demographic segmentation is the most basic and most important thing in making target markets.
The goal is to find out whether the product or brand being marketed fits the classification.