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How to Write a Business Plan: Target Market Analysis

The Business Plan and the Importance of Defining Your Target Market

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Conducting a Market Analysis

Polling your target market, writing the market analysis, online tools for market research, u.s. online market research sources, canadian online market research, local sources of market research, doing your own market research.

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The market analysis is basically the target market section of your business plan . It is a thorough examination of the ideal people to whom you intend to sell your products or services.  

Even if you intend on selling a product or service only in your community, you won't be selling that service to everyone who lives there. Knowing exactly what type(s) of people might be interested in buying your product or service and how many of them reside in your projected area or region is fundamental in creating your market analysis.

Once target market data has been established, you'll also work on sales projections within specific time frames, as well as how prospective sales might be affected by trends and policies.

Research is key and cornerstone of any solid  business plan .

Don't Skip This Step!

Don't skip market research; otherwise, you could end up starting a business that doesn't have a paying market.

Use these general terms as linchpins in research data for the market analysis section of your business plan, and to identify your target market:

But don't stop here. To succinctly define your target market, poll or survey members of your prospective clients or customers to ask specific questions directly related to your products or services. For instance, if you plan to sell computer-related services, ask questions relating to the number of computing devices your prospective customers own and how often they require servicing. If you plan on selling garden furniture and accessories, ask what kinds of garden furniture or accessories your potential customers have bought in the past, how often, and what they expect to buy within the next one, three, and five years.

Answers to these and other questions related to your market are to help you understand your market potential.

The goal of the information you collect is to help you project how much of your product or service you'll be able to sell. Review these important questions you need to try to answer using the data you collect:

• What proportion of your target market has used a product similar to yours before?
• How much of your product or service might your target market buy? (Estimate this in gross sales and/or in units of product/service sold.)
• What proportion of your target market might be repeat customers?
• How might your target market be affected by demographic shifts?
• How might your target market be affected by economic events (e.g. a local mill closing or a big-box retailer opening locally)?
• How might your target market be affected by larger socio-economic trends?
• How might your target market be affected by government policies (e.g. new bylaws or changes in taxes)?

One purpose of the market analysis is to ensure you have a viable business idea.

Find Your Buying Market

Use your market research to make sure people don't just like your business idea, but they're also willing to pay for it.

If you have information suggesting that you have a large enough market to sustain your business goals, write the market analysis in the form of several short paragraphs using appropriate headings for each. If you have several target markets, you may want to number each. 

Sections of your market analysis should include:

• Industry Description and Outlook
• Target Market
• Market Research Results
• Competitive Analysis

Remember to properly cite your sources of information within the body of your market analysis as you write it. You and other readers of your business plan, such as potential investors, will need to know the sources of the statistics or opinions that you've gathered.

There are several online resources to learn if your business idea is something worth pursing, including:

• Keyword searches can give you an overall sense of potential demand for your product or service based on the number of searches.
• Google Trends analysis can tell you how the number of searches has changed over time.
• Social media campaigns can give you an indication of the potential customer interest in your business idea.

The U.S. Small Business Administration (SBA) has information on doing your market research and analysis , as well as a list of free small business data and trends resources you can use to conduct your research. Consider these sources for data collection:

• SBA  Business Data and Statistics  
• The U.S. Census Bureau maintains a huge database of demographic information that is searchable by state, county, city/town, or zip code using its census data tool . Community, housing, economic, and population surveys are also available.
• The U.S. Department of Commerce Bureau of Economic Analysis (BEA) has extensive statistics on the economy including consumer income/spending/consumption, business activity, GDP, and more, all of which are searchable by location.

The Government of Canada offers a guide on doing market research and tips for understanding the data you collect. Canadian data resources include:

• Statistics Canada  offers demographic and economic data.
• The  Business Development Bank of Canada (BDC)  offers market research and consulting with industry experts.
• The Canada Business Network provides business information to entrepreneurs by province/territory, including market research data.

There are also a great many local resources for building target market information to explore, including:

• Local library
• Local Chamber of Commerce
• Board of Trade
• Economic Development Centre
• Local government agent's office
• Provincial business ministry
• Local phone book

All of these will have information helpful in defining your target market and providing insights into trends.

The above resources are secondary sources of information, in which others have collected and compiled the data. To get specific information about your business, consider conducting your own market research . For instance, you might want to design a questionnaire and survey your target market to learn more about their habits and preferences relating to your product or service.

Market research is time-consuming but is an important step in affording your business plan validity. If you don't have the time or the research skills to thoroughly define your target market yourself, hiring a person or firm to do the research for you can be a wise investment.​

Small Business Administration. " Market Research and Competitive Analysis. " Accessed Jan. 13, 2020.

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What Is a Target Market?

• Defining a Product's Target Market
• 4 Target Markets

Why Are Target Markets Important?

What are market segments, target market and product sales.

• Target Market FAQs

The Bottom Line

• Marketing Essentials

Target Market: Definition, Purpose, Examples, Market Segments

Investopedia / Mira Norian

A target market is a group of people that have been identified as the most likely potential customers for a product because of their shared characteristics, such as age, income, and lifestyle.

Identifying the target market is a key part of the decision-making process when a company designs, packages, and advertises its product.

Key Takeaways

• A target market is a group of customers with shared demographics who have been identified as the most likely buyers of a company's product or service.
• Identifying the target market is important in the development and implementation of a successful marketing plan for any new product.
• The target market also can inform a product's specifications, packaging, and distribution.

How Do I Define My Product's Target Market?

Part of creating a new product is envisioning the consumers who will want it.

A new product must satisfy a need or solve a problem, or both. That need or problem is probably not universal unless it reaches the level of indoor plumbing. More likely, it is needed by a subset of consumers, such as environmentally-conscious vegetarians, or science nerds, or outdoor enthusiasts. It may appeal to a teenager or a middle-aged professional, a bargain-hunter or a snob.

Envisioning your likely target market is part of the process of creating and refining a product, and informs decisions about its packaging, marketing, and placement.

What Are the 4 Target Markets?

Market researchers use activity, interest, and opinion (AIO) surveys to construct psychographic profiles of their target customers. Marketing professionals divide consumers into four major segments:

Demographic: These are the main characteristics that define your target market. Everyone can be identified as belonging to a specific age group, income level, gender, occupation, and education level.

Geographic: This segment is increasingly relevant in the era of globalization. Regional preferences need to be taken into account.

Psychographic: This segment goes beyond the basics of demographics to consider lifestyle, attitudes, interests, and values.

Behavioral: This is the one segment that relies on research into the decisions of a company's current customers. New products may be introduced based on research into the proven appeal of past products.

What Is an Example of a Target Market?

Each of the four target markets can be used to consider who the customer for a new product is.

For example, there are an estimated 100,000 Italian restaurants in the U.S. Clearly, they have enormous appeal.

But a corner pizza joint might appeal mostly, although by no means entirely, to a younger and more budget-conscious consumer, while an old-fashioned white tablecloth place might be dominated by older folks and families who live in the neighborhood. Meanwhile, a newer place down the street might cater to an upscale and trend-conscious crowd who will travel a good distance for the restaurant's innovative menu and fancy wine list.

In each successful case, a savvy business person has consciously considered the ideal target market for the restaurant and has tweaked the menu, decor, and advertising strategy to appeal to that market.

Few products today are designed to appeal to absolutely everyone. The Aveda Rosemary Mint Bath Bar, available for $26 a bar at Aveda beauty stores, is marketed to the upscale and eco-conscious woman who will pay extra for quality. Cle de Peau Beaute Synactif Soap retails for $110 a bar and is marketed to wealthy, fashion-conscious women who are willing to pay a premium for a luxury product. An eight-pack of Dial soap costs $12 at CVS, and it is known to get the job done.

Part of the success of selling a good or service is knowing to whom it will appeal and who will ultimately buy it. Its user base can grow over time through additional marketing, advertising, and word of mouth.

That's why businesses spend a lot of time and money in defining their initial target markets, and why they follow through with special offers, social media campaigns , and specialized advertising.

Dividing a target market into segments means grouping the population according to the key characteristics that drive their spending decisions. Some of these are gender, age, income level, race, education level, religion, marital status, and geographic location.

Consumers with the same demographics tend to value the same products and services, which is why narrowing down the segments is one of the most important factors in determining target markets.

For example, people who fall into a higher income bracket may be more likely to buy specialty coffee from Starbucks instead of Dunkin' Donuts. The parent companies of both of these brands need to know that in order to decide where to locate their stores, where to stock their products, and where to advertise their brand.

A business may have more than one target market—a primary target market, which is the main focus, and a secondary target market, which is smaller but has growth potential. Toy commercials are targeted directly to children. Their parents are the secondary market.

Identifying the target market is an essential part of a product development plan, along with manufacturing, distribution, price, and promotion planning. The target market determines significant factors about the product itself. A company may tweak certain aspects of a product, such as the amount of sugar in a soft drink or the style of the packaging, so that it appeals more to consumers in its target group.

As a company’s product sales grow, it may expand its target market internationally. International expansion allows a company to reach a broader subset of its target market in other regions of the world.

In addition to international expansion, a company may find its domestic target market expands as its products gain more traction in the marketplace. Expanding a product's target market is a revenue opportunity worth pursuing.

How Detailed Should a Target Market Be?

It depends. Broadly speaking, a product may be designed for a mass market or a niche market, and a niche market can be a very small group indeed, especially in a product's early introductory phase.

Some carbonated beverages aim for a practically universal market. Coca-Cola had to branch out to 200 markets abroad to continue growing its customer base. Gatorade is owned by Pepsi Cola, but the brand is positioned as a drink for athletes. The soda brand Poppi, which is branded as a "Healthy, Sparkling, Prebiotic Soda with Real Fruit Juice, Gut Health, and Immunity Benefits," is clearly aimed at a younger, healthier, and more trend-conscious target market.

Consider a casual apparel company that is working to build its distribution channels abroad. In order to determine where its apparel will be most successful, it conducts some research to identify its primary target market. It discovers that the people most likely to buy their products are middle-class women between the ages of 35 and 55 who live in cold climates.

It's reasonable for the company to focus its advertising efforts on northern European websites that have a strong female audience.

But first, the company may consider how its apparel can be most attractive to that target market. It may revise its styles and colors and tweak its advertising strategy to optimize its appeal to this new prospective market.

What Is the Purpose of a Target Market?

A target market defines a product as well as vice versa.

Once a target market is identified, it can influence a product's design, packaging, price, promotion, and distribution.

A product aimed at men won't be packaged in pink plastic. A luxury cosmetic won't be sold in a pharmacy. An expensive pair of shoes comes with a branded cloth drawstring bag as well as a shoebox. All of those factors are signals to the target audience that they have found the right product.

Identifying the target market is part of the process of creating and refining a new product.

A target market can be translated into a profile of the consumer to whom a product is most likely to appeal. The profile considers four main characteristics of that person: demographic, geographic, psychographic, and behavioral.

National Geographic. " How Italian Cuisine Became as American as Apple Pie ."

Aveda. " Rosemary Mint Bath Bar ."

Cle de Peau. " Synactif Soap ."

CVS. " Dial Antibacterial Deodorant Bar Soap, White ."

Coca-Cola Australia. " Coca-Cola: From Start-Up to Global Enterprise ."

Pepsico Partners. " Gatorade ."

DrinkPoppi. " Home ."

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How to Write a Market Analysis for a Business Plan

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A lot of preparation goes into starting a business before you can open your doors to the public or launch your online store. One of your first steps should be to write a business plan . A business plan will serve as your roadmap when building your business.

Within your business plan, there’s an important section you should pay careful attention to: your market analysis. Your market analysis helps you understand your target market and how you can thrive within it.

Simply put, your market analysis shows that you’ve done your research. It also contributes to your marketing strategy by defining your target customer and researching their buying habits. Overall, a market analysis will yield invaluable data if you have limited knowledge about your market, the market has fierce competition, and if you require a business loan. In this guide, we'll explore how to conduct your own market analysis.

How to conduct a market analysis: A step-by-step guide

In your market analysis, you can expect to cover the following:

Industry outlook

Target market

Market value

Competition

Barriers to entry

Let’s dive into an in-depth look into each section:

Step 1: Define your objective

Before you begin your market analysis, it’s important to define your objective for writing a market analysis. Are you writing it for internal purposes or for external purposes?

If you were doing a market analysis for internal purposes, you might be brainstorming new products to launch or adjusting your marketing tactics. An example of an external purpose might be that you need a market analysis to get approved for a business loan .

The comprehensiveness of your market analysis will depend on your objective. If you’re preparing for a new product launch, you might focus more heavily on researching the competition. A market analysis for a loan approval would require heavy data and research into market size and growth, share potential, and pricing.

Step 2: Provide an industry outlook

An industry outlook is a general direction of where your industry is heading. Lenders want to know whether you’re targeting a growing industry or declining industry. For example, if you’re looking to sell VCRs in 2020, it’s unlikely that your business will succeed.

Starting your market analysis with an industry outlook offers a preliminary view of the market and what to expect in your market analysis. When writing this section, you'll want to include:

Market size

Are you chasing big markets or are you targeting very niche markets? If you’re targeting a niche market, are there enough customers to support your business and buy your product?

Product life cycle

If you develop a product, what will its life cycle look like? Lenders want an overview of how your product will come into fruition after it’s developed and launched. In this section, you can discuss your product’s:

Research and development

Projected growth

How do you see your company performing over time? Calculating your year-over-year growth will help you and lenders see how your business has grown thus far. Calculating your projected growth shows how your business will fare in future projected market conditions.

Step 3: Determine your target market

This section of your market analysis is dedicated to your potential customer. Who is your ideal target customer? How can you cater your product to serve them specifically?

Don’t make the mistake of wanting to sell your product to everybody. Your target customer should be specific. For example, if you’re selling mittens, you wouldn’t want to market to warmer climates like Hawaii. You should target customers who live in colder regions. The more nuanced your target market is, the more information you’ll have to inform your business and marketing strategy.

With that in mind, your target market section should include the following points:

Demographics

This is where you leave nothing to mystery about your ideal customer. You want to know every aspect of your customer so you can best serve them. Dedicate time to researching the following demographics:

Income level

Create a customer persona

Creating a customer persona can help you better understand your customer. It can be easier to market to a person than data on paper. You can give this persona a name, background, and job. Mold this persona into your target customer.

What are your customer’s pain points? How do these pain points influence how they buy products? What matters most to them? Why do they choose one brand over another?

Research and supporting material

Information without data are just claims. To add credibility to your market analysis, you need to include data. Some methods for collecting data include:

Target group surveys

Focus groups

Reading reviews

Feedback surveys

You can also consult resources online. For example, the U.S. Census Bureau can help you find demographics in calculating your market share. The U.S. Department of Commerce and the U.S. Small Business Administration also offer general data that can help you research your target industry.

Step 4: Calculate market value

You can use either top-down analysis or bottom-up analysis to calculate an estimate of your market value.

A top-down analysis tends to be the easier option of the two. It requires for you to calculate the entire market and then estimate how much of a share you expect your business to get. For example, let’s assume your target market consists of 100,000 people. If you’re optimistic and manage to get 1% of that market, you can expect to make 1,000 sales.

A bottom-up analysis is more data-driven and requires more research. You calculate the individual factors of your business and then estimate how high you can scale them to arrive at a projected market share. Some factors to consider when doing a bottom-up analysis include:

Where products are sold

Who your competition is

The price per unit

How many consumers you expect to reach

The average amount a customer would buy over time

While a bottom-up analysis requires more data than a top-down analysis, you can usually arrive at a more accurate calculation.

Step 5: Get to know your competition

Before you start a business, you need to research the level of competition within your market. Are there certain companies getting the lion’s share of the market? How can you position yourself to stand out from the competition?

There are two types of competitors that you should be aware of: direct competitors and indirect competitors.

Direct competitors are other businesses who sell the same product as you. If you and the company across town both sell apples, you are direct competitors.

An indirect competitor sells a different but similar product to yours. If that company across town sells oranges instead, they are an indirect competitor. Apples and oranges are different but they still target a similar market: people who eat fruits.

Also, here are some questions you want to answer when writing this section of your market analysis:

What are your competitor’s strengths?

What are your competitor’s weaknesses?

How can you cover your competitor’s weaknesses in your own business?

How can you solve the same problems better or differently than your competitors?

How can you leverage technology to better serve your customers?

How big of a threat are your competitors if you open your business?

Step 6: Identify your barriers

Writing a market analysis can help you identify some glaring barriers to starting your business. Researching these barriers will help you avoid any costly legal or business mistakes down the line. Some entry barriers to address in your marketing analysis include:

Technology: How rapid is technology advancing and can it render your product obsolete within the next five years?

Branding: You need to establish your brand identity to stand out in a saturated market.

Cost of entry: Startup costs, like renting a space and hiring employees, are expensive. Also, specialty equipment often comes with hefty price tags. (Consider researching equipment financing to help finance these purchases.)

Location: You need to secure a prime location if you’re opening a physical store.

Competition: A market with fierce competition can be a steep uphill battle (like attempting to go toe-to-toe with Apple or Amazon).

Step 7: Know the regulations

When starting a business, it’s your responsibility to research governmental and state business regulations within your market. Some regulations to keep in mind include (but aren’t limited to):

Employment and labor laws

Advertising

Environmental regulations

If you’re a newer entrepreneur and this is your first business, this part can be daunting so you might want to consult with a business attorney. A legal professional will help you identify the legal requirements specific to your business. You can also check online legal help sites like LegalZoom or Rocket Lawyer.

Tips when writing your market analysis

We wouldn’t be surprised if you feel overwhelmed by the sheer volume of information needed in a market analysis. Keep in mind, though, this research is key to launching a successful business. You don’t want to cut corners, but here are a few tips to help you out when writing your market analysis:

Use visual aids

Nobody likes 30 pages of nothing but text. Using visual aids can break up those text blocks, making your market analysis more visually appealing. When discussing statistics and metrics, charts and graphs will help you better communicate your data.

Include a summary

If you’ve ever read an article from an academic journal, you’ll notice that writers include an abstract that offers the reader a preview.

Use this same tactic when writing your market analysis. It will prime the reader of your market highlights before they dive into the hard data.

Get to the point

It’s better to keep your market analysis concise than to stuff it with fluff and repetition. You’ll want to present your data, analyze it, and then tie it back into how your business can thrive within your target market.

Revisit your market analysis regularly

Markets are always changing and it's important that your business changes with your target market. Revisiting your market analysis ensures that your business operations align with changing market conditions. The best businesses are the ones that can adapt.

Why should you write a market analysis?

Your market analysis helps you look at factors within your market to determine if it’s a good fit for your business model. A market analysis will help you:

1. Learn how to analyze the market need

Markets are always shifting and it’s a good idea to identify current and projected market conditions. These trends will help you understand the size of your market and whether there are paying customers waiting for you. Doing a market analysis helps you confirm that your target market is a lucrative market.

2. Learn about your customers

The best way to serve your customer is to understand them. A market analysis will examine your customer’s buying habits, pain points, and desires. This information will aid you in developing a business that addresses those points.

3. Get approved for a business loan

Starting a business, especially if it’s your first one, requires startup funding. A good first step is to apply for a business loan with your bank or other financial institution.

A thorough market analysis shows that you’re professional, prepared, and worth the investment from lenders. This preparation inspires confidence within the lender that you can build a business and repay the loan.

4. Beat the competition

Your research will offer valuable insight and certain advantages that the competition might not have. For example, thoroughly understanding your customer’s pain points and desires will help you develop a superior product or service than your competitors. If your business is already up and running, an updated market analysis can upgrade your marketing strategy or help you launch a new product.

Final thoughts

There is a saying that the first step to cutting down a tree is to sharpen an axe. In other words, preparation is the key to success. In business, preparation increases the chances that your business will succeed, even in a competitive market.

The market analysis section of your business plan separates the entrepreneurs who have done their homework from those who haven’t. Now that you’ve learned how to write a market analysis, it’s time for you to sharpen your axe and grow a successful business. And keep in mind, if you need help crafting your business plan, you can always turn to business plan software or a free template to help you stay organized.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

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How to Define Your Target Market: a Guide for Entrepreneurs

• March 21, 2024
• Business Plan , How to Write

Identifying your target market is the cornerstone of any successful business strategy. It’s a process that involves understanding who is most likely to buy your product or service and tailoring your offerings and marketing efforts to meet their specific needs.

This comprehensive guide will walk you through the steps to accurately define your target market, providing you with the tools and knowledge to make informed business decisions.

The Importance of Knowing Your Target Market

Before diving into the how-to, it’s crucial to grasp the significance of a well-defined target market. It influences every aspect of your business, from product development and pricing strategies to advertising channels and brand messaging.

A precise target market ensures efficient use of resources, maximizes marketing ROI, and significantly increases the chances of business success.

Gather Market Insights through Research

The first step is gathering industry data that will inform your understanding of potential customers and the broader market environment. This involves:

• Primary Research : Directly collecting data from potential customers using surveys, interviews, focus groups, or observations. This research can reveal firsthand information about consumer needs, preferences, and behaviors.
• Secondary Research : Analyzing existing data from market reports, industry statistics, academic papers, and competitor analyses. This can provide a broader context about market trends and competitive dynamics.

Both types of research are crucial for painting a comprehensive picture of the market landscape.

Segmenting the Market

Once you have a pool of market data, the next step is to segment the market into smaller, manageable groups of consumers with similar characteristics. Market segmentation can be approached from several angles:

• Demographic : Age, gender, income level, education, and family status.
• Geographic : Country, region, city, or even neighborhood.
• Psychographic : Lifestyle, values, attitudes, and interests.
• Behavioral : Purchasing behaviors, product usage rates, and brand interactions.

Effective segmentation will allow you to identify niches within the market that your business is uniquely positioned to serve.

Analyzing Your Competitors

Understanding your competition is essential in defining your target market. Analyze your competitors to see who they are targeting and how they are positioning their products or services.

Identifying gaps in their strategies or areas where customer needs are not fully met can highlight opportunities for differentiation.

Selecting Your Target Market

With the insights gained from your research and segmentation, you can now select the most viable market segment(s) for your business.

Criteria for selection should include the size and growth potential of the segment, the level of competition, and how well it aligns with your business’s capabilities and vision.

Creating Customer Personas

Develop detailed profiles for your ideal customers within the chosen segments. Customer personas should include demographic details, psychographic traits, and specific needs or pain points.

This step transforms abstract market data into concrete characters, making it easier to tailor your marketing strategies and product development.

Testing and Refining Your Market Definition

The final step is to validate your assumptions by testing your product or marketing message with a sample of your target market.

This could involve A/B testing marketing messages, launching a pilot product, or conducting more focused groups. Use the feedback gathered to refine your target market definition and strategy continuously.

Privacy Overview

What Is a Target Market (And How to Find Yours)

The better you understand your target market, the more you’ll be able to focus your ads and reach the audience most likely to convert into customers.

Table of Contents

Your target market sets the tone for your entire marketing strategy — from how you develop and name your products or services right through to the marketing channels you use to promote them.

Here’s a hint before we dig in: Your target market is not “everyone” ( unless you’re Google ). Your task in defining your target market is to identify and understand a smaller, relevant niche so you can dominate it. It’s all about narrowing your focus while expanding your reach.

In this guide, we’ll help you learn who’s already interacting with your business and your competitors, then use that information to develop a clear target market as you build your brand .

Bonus: Get the free template to easily craft a detailed profile of your ideal customer and/or target audience.

What is a target market?

A target market is the specific group of people you want to reach with your marketing message . They are the people who are most likely to buy your products or services, and they are united by some common characteristics, like demographics and behaviors.

The more clearly you define your target market, the better you can understand how and where to reach your ideal potential customers. You can start with broad categories like millennials or single dads, but you need to get much more detailed than that to achieve the best possible conversion rates.

Don’t be afraid to get highly specific. This is all about targeting your marketing efforts effectively, not stopping people from buying your product.

People who are not included in your targeted marketing can still buy from you—they’re just not your top focus when crafting your marketing strategy. You can’t target everyone, but you can sell to everyone.

Your target market should be based on research, not a gut feeling . You need to go after the people who really want to buy from you, even if they’re not the customers you originally set out to reach.

What is target market segmentation?

Target market segmentation is the process of dividing your target market into smaller, more specific groups. It allows you to create a more relevant marketing message for each group.

Remember — you can’t be all things to all people. But you can be different things to different groups of people.

For example, as a vegetarian, I’ve eaten plenty of Impossible Burgers. I’m definitely a target customer. But vegetarians are a surprisingly small target market segment for Impossible Foods: only 10% of their customer base.

That’s why Impossible Foods’ first national advertising campaign was definitely not targeted at me:

https://www.facebook.com/ImpossibleFoods/videos/158779836141556

The target market segment for this ad campaign was “meat eaters who haven’t yet tried Impossible products.”

Vegetarians and meat eaters have different reasons for eating plant-based burgers and want different things from the experience. Target market segmentation ensures the company reaches the right audience with the right message.

How to define your target market

Step 1. compile data on your current customers.

A great first step in figuring out who most wants to buy from you is to identify who is already using your products or services. Once you understand the defining characteristics of your existing customer base, you can go after more people like that.

Depending on how someone connects with your business, you might have only a little information about them, or a lot.

This doesn’t mean you should add a lot of questions to your order or opt-in process just for audience research purposes — this can annoy customers and result in abandoned shopping carts.

But do be sure to use the information you naturally acquire to understand trends and averages .

Your CRM is a goldmine here. UTM parameters combined with Google Analytics can also provide useful information about your customers.

Some data points you might want to consider are:

• Age: You don’t need to get too specific here. It won’t likely make a difference whether your average customer is 24 or 27. But knowing which decade of life your customers are in can be very useful.
• Location (and time zone): Where in the world do your existing customers live? In addition to understanding which geographic areas to target, this helps you figure out what hours are most important for your customer service and sales reps to be online, and what time you should schedule your social ads and posts to ensure best visibility.
• Language: Don’t assume your customers speak the same language you do. And don’t assume they speak the dominant language of their (or your) current physical location.
• Spending power and patterns: How much money do your current customers have to spend? How do they approach purchases in your price category?
• Interests: What do your customers like to do, besides using your products or services? What TV shows do they watch? What other businesses do they interact with?
• Challenges: What pain points are your customers facing? Do you understand how your product or service helps them address those challenges?
• Stage of life: Are your customers likely to be college students? New parents? Parents of teens? Retirees?

If you’re selling B2B products, your categories will look a little different. You might want to collect information about the size of businesses that buy from you, and information about the titles of the people who tend to make the buying decisions. Are you marketing to the CEO? The CTO? The social marketing manager?

Step 2. Incorporate social data

Social media analytics can be a great way of filling out the picture of your target market. They help you understand who’s interacting with your social accounts, even if those people are not yet customers.

These people are interested in your brand. Social analytics can provide a lot of information that might help you understand why. You’ll also learn about potential market segments you may not have thought to target before.

You can also use social listening to help identify the people who are talking about you and your product on social media, even if they don’t follow you.

If you want to reach your target market with social ads, lookalike audiences are an easy way to reach more people who share characteristics with your best customers.

Step 3. Check out the competition

Now that you know who’s already interacting with your business and buying your products or services, it’s time to see who’s engaging with the competition.

Knowing what your competitors are up to can help you answer some key questions:

• Are your competitors going after the same target market segments as you are?
• Are they reaching segments you hadn’t thought to consider?
• How are they positioning themselves?

Our guide on how to do competitor research on social media walks you through the best ways to use social tools to gather competitor insights.

You won’t be able to get detailed audience information about the people interacting with your competitors, but you’ll be able to get a general sense of the approach they’re taking and whether it’s allowing them to create engagement online.

This analysis will help you understand which markets competitors are targeting and whether their efforts appear to be effective for those segments.

Step 4. Clarify the value of your product or service

This comes down to the key distinction all marketers must understand between features and benefits. You can list the features of your product all day long, but no one will be convinced to buy from you unless you can explain the benefits .

Features are what your product is or does. The benefits are the results. How does your product make someone’s life easier, or better, or just more interesting?

If you don’t already have a clear list of the benefits of your product, it’s time to start brainstorming now. As you create your benefit statements, you’ll also by default be stating some basic information about your target audience.

For example, if your service helps people find someone to look after their pets while they’re away, you can be pretty confident that your market will have two main segments: (1) pet owners and (2) existing or potential pet-sitters.

If you’re not sure exactly how customers benefit from using your products, why not ask them in a survey, or even a social media poll ?

You might find that people use your products or services for purposes you haven’t even thought of. That might, in turn, change how you perceive your target market for future sales.

Step 5. Create a target market statement

Now it’s time to boil everything you’ve discovered so far into one simple statement that defines your target market. This is actually the first step in creating a brand positioning statement , but that’s a project for another day. For now, let’s stick to creating a statement that clearly defines your target market.

For example, here’s Zipcar’s brand positioning statement, as cited in the classic marketing text Kellogg on Marketing . We’re interested in the first part of the statement, which defines the target market:

“To urban-dwelling, educated, techno-savvy consumers who worry about the environment that future generations will inherit, Zipcar is the car-sharing service that lets you save money and reduce your carbon footprint, making you feel you’ve made a smart, responsible choice that demonstrates your commitment to protecting the environment.”

Zipcar is not targeting all residents of a particular city. They’re not even targeting all the people in a given city who don’t own a car. They’re specifically targeting people who:

• live in an urban area
• have a certain degree of education
• are comfortable with technology
• are concerned about the environment

These are all interests and behaviors that Zipcar can specifically target using social content and social ads .

View this post on Instagram A post shared by Zipcar (@zipcar)

They also help to guide the company’s overall approach to its service, as evidenced by the rest of the positioning statement.

When crafting your target market statement, try to incorporate the most important demographic and behavior characteristics you’ve identified. For example:

Our target market is [gender(s)] aged [age range], who live in [place or type of place], and like to [activity].

Don’t feel like you need to stick to these particular identifiers. Maybe gender is irrelevant for your market, but you have three or four key behaviors to incorporate in your statement.

If you offer multiple products or services, you might need to create a target market statement for each market segment. In this case, it’s useful to define buyer personas .

Target market examples

Nike target market.

Despite its current market domination, Nike actually provides a great example of what can go wrong when you try to target too general of an audience.

Nike started out as a running shoe company. In the 1980s, they tried to expand their target market beyond runners to include anyone who wanted comfortable shoes. They launched a line of casual shoes, and it flopped.

Here’s the thing: Non-runners were already buying Nike shoes to walk to work, or for other casual purposes. Nike spotted this as an opportunity to expand. Instead, they diluted their brand promise, and the company actually started losing money.

The lesson, according to company founder Phil Knight?

“Ultimately, we determined that we wanted Nike to be the world’s best sports and fitness company and the Nike brand to represent sports and fitness activities. Once you say that, you have focus.”

While Nike would certainly not stop casual users from buying its shoes, the company refocused everything from product development to marketing on its target market: athletes of all levels, from pro to beer league.

In fact, understanding the importance of focus led Nike into a highly effective strategy of target market segmentation. The brand has multiple target markets for its various product lines.

On social, that means they use multiple accounts to reach their different target market groups. No one account tries to be all things to all customers.

The post below from Nike’s general Instagram account targets the segment of their audience interested in fashion and lifestyle products.

View this post on Instagram A post shared by Nike Basketball (@nikebasketball)

But the company also has channels dedicated to specific sports. Here’s an example of the content they create for runners:

View this post on Instagram A post shared by Nike Running (@nikerunning)

And that means … the brand has been able to return to marketing its products specifically for casual wear. It just reaches the casual target market through different channels than it uses for its athletic markets. It’s a different target market segment, and a different marketing message

View this post on Instagram A post shared by Nike Sportswear (@nikesportswear)

Like Nike, you might have one target market, or many, depending on the size of your brand. Remember that you can only speak effectively to one target market segment at a time.

Takasa target market

Takasa is a Canadian retail homewares company that specializes in organic, fair trade bedding and bath linens.

Here’s their target market as defined by founders Ruby and Kuljit Rakhra:

“ Our target market is the LOHAS segment, which means Family Lifestyles of Health and Sustainability. This group of people is already living, or striving to live, a green lifestyle … We know our target demo is very conscious about what their families consume, as well as the impact this consumption has on the environment.”

In their social content, they clearly identify the product features most important to their target market: organic materials and fair labor practices.

View this post on Instagram A post shared by Organic + Fairtrade Home Goods (@takasa.co)

The City of Port Alberni’s target market

Why does a city need a target market? In Port Alberni’s case, the city is working to “attract investment, business opportunities and new residents.” To that end, they launched a rebranding and marketing campaign.

And a marketing campaign, of course, needs a target market. Here’s how the city defined it:

“ Our target market is young people and young families 25 to 45 years of age who are entrepreneurial-minded, family oriented, adventurous, enjoy an active lifestyle, desire an opportunity to contribute to growth, well-educated and skilled professionals or tradespeople.”

In their social content, they highlight recreational opportunities aimed at those active and adventurous young families, even using the handle @PlayinPA.

View this post on Instagram A post shared by City of Port Alberni (@playinpa)

White House Black Market target market

White House Black Market is a women’s fashion brand. Here’s how they describe their target customer on their website :

“Our customer … is strong yet subtle, modern yet timeless, hard-working yet easy-going.”

That’s a fine description when talking directly to customers. But the marketing department needs a target market definition with a few more specifics. Here’s the detailed target market as described by the company’s former president:

“ Our target market is women [with a] median age of about 45 … at a stage in her life where she’s very busy, primarily a working woman. She’s probably got one or two kids left at home [or] … her children may be out of the house and on their way to college.”

With their hashtag #WHBMPowerhouse, they focus on this key demographic of women in their 40s with busy home lives and careers.

View this post on Instagram A post shared by White House Black Market (@whbm)

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Christina Newberry is an award-winning writer and editor whose greatest passions include food, travel, urban gardening, and the Oxford comma—not necessarily in that order.

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Plan Projections

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Home > Business Plan > Target Market in a Business Plan

Target Market in a Business Plan

… we are targeting this part of the market …

What is the Target Market?

Target Market Segments

Your product will not be of equal interest to all potential customers, as they do not all have the same needs and characteristics. This section of the business plan deals with the analysis of the target market into different groups of customers (customer or target market segments) each having distinct characteristics and needs from the product.

The target market segmentation strategy depends on the business and the product, but generally segmentation falls into the following customer characteristics groups.

Psychographic segmentation

Psychographic segmentation splits up a sales market of a business based on such things as the social class, lifestyle choices, personality traits, tastes, attitudes, and the opinions of its customers.

Psychographic market segmentation examples include the promotion of products such as cars as these often reflect a customers lifestyle, and leisure activities. For example, a car business might identify customers who are interested in keeping the environment green and promote hybrid cars to them, or a business involved in activity holidays will seek to market to customers who show a preference for an active lifestyle.

Demographic segmentation

• Social class
• Size of family
• Nationality

Geographic Segmentation

Geographic segmentation is the process of splitting up a sales market of a business based on the geographical location of the customers. It is a particularly important marketing tool when the business is a multinational, worldwide business, but is also used by businesses to split their markets into region, county, state, city, neighborhood, or postal code.

A geographic segmentation example would be seasonal clothing items such as coats and swimwear. In contrast, in a colder climate coats would be marketed and sold all year round whereas swimwear would be highly seasonal during the holiday period. In a hot climate swimwear would be the all year round product and winter coats might not be sold at all.

Behavioral segmentation

Behavioral segmentation is the process of splitting up the sales market based on brand loyalty, usage, benefits required.

Target Market Presentation in the Business Plan

The business plan target market section can be presented in a number of formats, but a listing of the major customer segments together with a pie chart will show the investor where the main potential for the product lies. In the example below, the market is split into four main segments both in terms of number of customers and percentage of the total target market.

The average customer spend is also included, to reconcile the total target market back to the served available market (SAM) in monetary terms. Finally, a brief statement about the growth prospects for the market is included to show the investor the potential for growth in your chosen customer segments.

When identifying the target-market segments, it is important to be as specific as possible about the customer characteristics which make up each segment. In choosing which segments to concentrate on, take into account the size and potential for growth of each segment, and identify clearly what benefits, both emotional and financial, the product provides for the customer.

This is part of the financial projections and Contents of a Business Plan Guide , a series of posts on what each section of a simple business plan should include. The next post in this series is about the analysis of the competition for the target-market.

About the Author

Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.

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Small Business Trends

What is a target market and how to pick one (examples and template included).

When marketing a business, the key to success lies in the ability to target the right group or groups of people accurately. Knowing your target market is essential for any company that wants to create an effective, compelling marketing message that resonates and results in sales.

In this guide, we’ll explore what a target market is, how to define one, and why it’s so important. Let’s get started!

Table of Contents

What is Target Marketing?

Target marketing is indeed a crucial strategy for businesses, particularly for small businesses aiming to maximize their reach and resources. It helps them to hone in on potential customers who are most likely to be interested in their offerings and tailor their messages to those individuals.

Below are some key points about target marketing:

• Specific Focus : Target marketing allows businesses to focus on a specific demographic or set of customers. This focus could be based on age, gender, income, geographic location, interests, behaviors, or a combination of these factors.
• Efficient Resource Utilization : By focusing on a specific target market, businesses can use their resources more efficiently. This helps reduce wastage of resources on marketing efforts that reach people unlikely to purchase their product or service.
• Tailored Marketing and Sales Strategies : Businesses can customize their marketing and sales strategies to meet the specific needs and wants of their target market. This customization leads to more engaging, relevant, and effective messaging.
• Enhanced Customer Relationship : With a well-defined target market, businesses can build stronger relationships with customers by better understanding their needs, preferences, and behaviors. This understanding helps businesses to offer improved customer service and foster customer loyalty.
• Increased Sales and Profits : By targeting those most likely to buy their products or services, businesses can increase sales and, subsequently, profits. Target marketing often leads to higher conversion rates since the marketing efforts are directed towards individuals with a pre-existing interest or need for the product or service.

In conclusion, target marketing is a strategic approach to ensure your business is connecting with the right customers. It can lead to increased sales, more efficient use of marketing resources, and improved customer relationships, all of which are essential for a thriving business.

Before you start a business, it’s also important to write a business plan that includes a personal brand statement and a vision statement to clearly define your goals and objectives.

How to Define Your Target Market

Creating a marketing strategy for your business begins with defining your primary target market.

Knowing who your ideal customer is and understanding their needs and wants is essential for creating an effective plan. Here’s how to define your target market in six simple steps:

1. Conduct Market Research

Start by researching your potential customers to learn more about them. Target market research includes collecting data on demographics, interests, preferences, and purchasing habits. Doing so will help you create a profile of your ideal customer.

2. Define Your Unique Selling Proposition (USP)

Your USP is what differentiates your product or service from competitors and should be tailored to meet the needs of your target market. By clearly defining your USP, you can create a compelling marketing message that resonates with potential customers.

3. Analyze Your Competition

Once you understand the needs of your audience, take a look at what competitors are doing to determine which strategies may be most effective for reaching them. Analyzing the competition will help you determine the best approach for engaging your target market.

4. Segment Your Market

Break down the larger population into smaller market segments based on characteristics such as location, age, gender, education level, income level, and interests. This will help you identify small groups of people with similar interests and needs. By segmenting your market, you can create more targeted campaigns, which will lead to higher conversion rates.

5. Determine Personas

Create personas, which are fictional characters that represent each distinct market segment, so you can get a better understanding of how best to reach them with content that resonates with this specific audience. Doing so will help you create a more tailored message that is sure to resonate with potential customers.

6. Refine Your Strategy

Based on the insights you have gathered in Steps 1-5, refine your overall marketing strategy to best cater to each segment of customers. Things you can refine include messaging, promotions and pricing, content, and channels of distribution.

For instance, a health food company initially struggled with broad marketing efforts. By conducting thorough market research and customer interviews, they redefined their target market to health-conscious consumers aged 25-40, leading to a more focused marketing strategy and a subsequent increase in sales. This example illustrates the practical steps and positive outcomes of accurately defining a target market.

Defining Your Target Market Template

Defining your target market is essential for developing effective marketing strategies and reaching the right customers.

A template can be a useful tool in this process, as it helps to organize and structure the information you gather about your target market.

The template below is designed to guide you through the process of defining your target market and includes prompts for important information such as demographics, behaviors, and pain points.

Target Market Template:

1. Demographics:

• Income level
• Education level

2. Behaviors:

• Purchase habits
• Brand loyalty
• Media consumption
• Hobbies and interests

3. Pain Points and Needs:

• What are the problems or pain points that your target market is facing?
• What are their needs and desires?
• How can your product or service address these pain points and needs?

4. Goals and Objectives:

• What are the goals and objectives of your target market?
• How can your product or service help them achieve these goals and objectives?

5. Unique value proposition:

• What unique value does your product or service offer to your target market?
• How does it stand out from competitors?

6. Other relevant information:

• Include any other information that might be useful in defining your target market.

Why Knowing Your Target Market is So Important for Your Marketing Strategy

Understanding a specific target market is essential for any business to create an effective marketing strategy.

Without a proper understanding of the needs and wants of your target audience, it’s nearly impossible to craft a message that will resonate and result in sales.

Below are five reasons why knowing your target market is so important for your marketing strategy:

• Increased Reach – By targeting a specific group of people, you gain access to an audience who may not have been aware of your business or product in the past. This allows you to reach more potential customers and build a larger customer base.
• Cost Savings – More precise targeting means fewer wasted impressions, resulting in lower costs and higher returns on investment (ROI). Over the long term, this can result in significant savings for your business.
• Improved Engagement – Knowing your target market enables you to craft content tailored specifically to their interests and needs, which leads to improved engagement rates with potential customers. So, not only are you reaching more people, but they are paying more attention to your message.
• Targeted Promotion – You can use highly targeted promotions to strategically reach out to a select group of individuals and incentivize them to purchase from you. This can lead to higher sales and help you stand out from the competition.
• Better Conversion Rates – Understanding the wants and needs of your target audience increases the chances that they will convert into paying customers. The better the understanding of your target market, the better the chance for success.

Consider the case of a startup that failed to identify its target market correctly, leading to ineffective marketing strategies and eventual business closure. Conversely, a successful enterprise, by understanding its target market’s needs, was able to tailor its products, pricing, and promotions, resulting in increased market share and customer loyalty.

These real-world scenarios underscore the importance of target market identification as a cornerstone of business strategy, significantly influencing marketing effectiveness, customer engagement, and overall business success.

Target Market Segmentation

Target market segmentation is the practice of understanding and categorizing potential customers into distinct groups. This helps businesses better meet their customer’s needs by focusing on specific types of consumers and creating tailored campaigns that will resonate with them.

Take, for example, a clothing brand using psychographic segmentation to target fashion-forward young adults who prioritize sustainability. This approach enabled them to craft a resonant marketing message.

In contrast, demographic segmentation might involve a tech company focusing on middle-aged professionals for a new productivity tool, considering their occupation and income levels.

These instances show how different segmentation strategies can be applied to pinpoint the most receptive audience for specific products or services.

Psychographic Segmentation

Psychographic segmentation looks at lifestyle, attitudes, values, and opinions to segment an audience.

Through psychographic segmentation, you can develop a more personalized connection with your customers by crafting messages that fit their unique tastes, values, and interests.

Demographic Segmentation

A demographic target market is a group of consumers who share similar characteristics such as age group, gender, income, education, and occupation.

This type of target market is defined by measurable and observable characteristics.

For example, a business might target young professionals with a high disposable income and a college education.

Geographic Target Market

A geographic target market is defined by the consumer’s location. This type of target market focuses on reaching consumers in a specific geographic area.

For example, a business might target consumers in a specific city or state.

Firmographic Segmentation

Firmographic segmentation focuses on analyzing data about businesses to uncover insights about their strengths and weaknesses in order to reach the right buyers in a B2B setting.

Using firmographics allows marketers to understand which businesses are most likely interested in their products or services before they ever make contact.

A car rental business , for example, might target business travelers who frequently rent cars for work-related trips.

Behavioral Segmentation

Behavioral segmentation looks at how consumers interact with products and services, and their decisions to purchase or not purchase things based on past experiences, preferences, brand associations, and more.

By understanding behavior patterns marketers can craft messages that speak directly to the customer’s wants or needs.

Types of Target Markets

There are many ways to segment a target market, and the type of target market you choose will largely depend on your industry, product or service offering, and overall marketing goals.

Here are some of the most common types of target markets:

B2B (Business-to-Business) is an industry term used to describe companies that sell products or services to other businesses rather than individual consumers.

Examples include computer hardware manufacturers selling to corporate IT departments, accounting firms providing services to other businesses, and software developers creating programs for sale to other companies.

B2C (Business-to-Consumer) is a type of transaction where businesses sell their products directly to consumers, such as grocery stores selling food or clothing retailers selling apparel.

This type of targeting requires an understanding of consumer needs and preferences when crafting campaigns and messages that speak directly to the customer.

Niche Markets

A niche market is a smaller segment within a larger target market. This can be based on demographics, lifestyle choices, interests, or any other factor that defines a subset of customers who share common attributes.

Knowing your niche market can help you create more targeted ads and better understand the specific needs and wants of potential customers within that group.

How Big Should a Target Market be?

The ideal size of a target market depends on the type of product or service being offered and the goals of the business.

Generally, the larger the target market, the greater reach your campaign will have but it can also limit a business’s ability to customize messages to fit its audience.

Having too narrow of a focus when it comes to targeting can result in a lack of engagement from potential customers who could benefit from using your product.

It is important for businesses to find a balance between reach and specificity to maximize their results.

Target Market Examples

When it comes to identifying and reaching your target market, it can be helpful to look at examples of how other companies have done it. Here are four examples of companies and their target markets:

Starbucks Target Market

Starbucks , the coffee giant, targets a wide range of consumers, including busy professionals, college students, and older adults.

They focus on providing a convenient and comfortable experience for their customers, with a wide variety of coffee and food options.

Starbucks locations are often found in high-traffic areas such as downtown business districts, university campuses, and suburban shopping centers.

Their target market is also characterized by consumers who are willing to pay a premium for high-quality coffee and an inviting atmosphere.

Nike Target Market

Nike , the sportswear giant, targets consumers who are active and value fitness and healthy living.

They focus on providing high-performance athletic apparel and footwear for a wide range of sports and activities.

Nike’s target market includes serious athletes, fitness enthusiasts, and casual athletes who want to look and feel good while they exercise.

The company also targets youth and urban culture and often collaborates with popular athletes and fashion designers.

Tesla Target Market

Tesla, the electric vehicle manufacturer, targets consumers who are environmentally conscious and value innovation and technology.

They focus on providing electric vehicles and energy solutions that are sustainable and efficient.

Tesla’s target market includes early adopters of technology, consumers looking for an alternative to traditional gasoline vehicles, and individuals who are willing to pay a premium for a high-performance electric car.

Disney Target Market

Disney , the entertainment giant, targets families and children with a focus on creating magical experiences.

They offer a wide range of entertainment options, including theme parks, cruises, movies, and television shows.

Disney’s target market includes families with children, grandparents, and adults who are young at heart.

They also target consumers who are willing to pay for the Disney brand experience and for the memories that come with it.

Target Marketing Strategies

Developing effective target marketing strategies can help you reach the right customers and increase your return on investment. Here are five target marketing strategies to consider:

• Segmenting the market: Segmenting the market involves dividing the market into smaller groups of customers with similar characteristics. This allows you to create specific marketing strategies for each segment, increasing the chances of reaching the right customers.
• Creating buyer personas: A buyer persona is a fictional representation of your ideal customer. Creating buyer personas can help you understand the needs, wants, and pain points of your target market, and tailor your marketing messages accordingly.
• Developing a unique value proposition: A unique value proposition (UVP) is a statement that communicates the unique benefits of your product or service. Developing a UVP can help you stand out from the competition and attract the right customers.
• Using data and analytics: Data and analytics can help you better understand your target market and develop effective marketing strategies. This can include things like analyzing customer data, tracking website traffic, and monitoring social media metrics as part of a social media marketing strategy.
• Test and optimize: Once you have identified your target market and developed your marketing strategies, it’s important to test and optimize them based on the results. This can include A/B testing your messaging, testing different ad formats, and experimenting with different marketing channels.

What is a target market?

As many quality marketing courses teach, a target market is a specific group of consumers that a business or organization aims to reach with its marketing efforts.

It is defined by characteristics such as demographics, behaviors, pain points, and needs. It helps businesses to understand the needs and wants of their potential customers and create products, services, and marketing strategies that meet those needs.

Can you have multiple target markets?

Yes, it is possible to have multiple target markets. Companies often segment their customer base into multiple target markets in order to design and deliver messages that are more tailored to each one.

It’s important to find the right balance between reach and specificity when attempting to market effectively across multiple target markets.

How do I answer the question ‘What is your target market’?

When asked ‘What is your target market?’, you can respond with an explanation of the type of customers who are most likely to purchase your product or service.

This could include demographic information such as age, gender, income level, and geographic location, and/or psychographic information such as values, interests, lifestyle choices, or preferences.

You may wish to also provide examples of how you identify and target these segments in your marketing campaigns.

What are the 3 common target markets?

The 3 most common target markets are demographic segmentation, geographic segmentation, and psychographic segmentation. Demographic segmentation involves targeting customers based on their age, gender, income level, and other demographic information.

Geographic segmentation involves targeting customers based on where they live, such as by country or city. Psychographic segmentation involves targeting customers based on brand values alignment, interests, lifestyle choices, or preferences.

How detailed should a target market be? What is the purpose of a target market?

A target market should be as detailed as possible in order to ensure that it accurately reflects your ideal customer. The purpose of a target market is to identify the most likely customers for your product or service so that you can create effective and efficient marketing campaigns.

By focusing on this audience, you can make sure that you are reaching the right people with the right message to better engage them and increase your chances of conversion.

What is the difference between target market and target audience?

The difference between a target market and a target audience is that a target market is the group of potential customers that your company is aiming to reach, while a target audience is the people who are most likely to purchase your product or service.

A target market may include multiple different audiences, for example, young adults and retirees, while target audiences will be focused on one particular segment.

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BUSINESS STRATEGIES

What is a target market and how to define yours

• Rebecca Strehlow
• Dec 7, 2023
• 10 min read

One of the first steps in starting a business is determining your target market. This step alone can be the basis for what products you create, how you brand your business and ultimately who you market to.

With that in mind, you’ll need to develop assets that resonate with your target market. Start by creating a business website that represents your business and uses language and visuals relatable to your audience. Consider what niche you can fit into and what separates your business from the competition. From there you can create messaging, branding and advertising designed for your target market and convert more leads into customers.

Keep reading to learn more about defining your target market and gain expert tips on how to implement this targeting throughout your business strategy.

What is a target market?

Your target market is your product’s primary consumer. Once you know who this is, you can tailor your branding and marketing efforts toward them.

A target market can be composed of a broad group, such as married men over 40 in the US, or it can be quite narrow, such as urban, health-conscious, vegetarian women in Texas. Your market will depend on the particular consumer needs your product addresses.

The three key aspects of a target market include:

Demographics: Age, gender, income, education or employment status.

Geographics: Primary location of your market.

Personality traits: What they like and dislike, as well as where they shop and their favorite brands.

To pinpoint your target market, you’ll need to analyze data about your product niche, your customers and your competitors. You'll also need to understand more about the specific types of target markets in more detail.

What are the types of target markets?

In general there are several ways business owners can categorize target markets. For the most part target markets are divided into the following four main types: demographic, geographic, psychographic, and behavioral.

Demographic

This type of target market is defined by a number of demographic variables such as age, gender, income, education, and family size. Companies might target specific demographic groups based on their buying habits and purchasing power.

Geographic target markets are defined, as the name suggests, by geographic variables such as region, state, city and population density.

Psychographic

Psychographic variables such as lifestyle, values, personality, and social class make up the definition of this target market.

This type of target market is defined by consumer behavior, such as the benefits sought, usage rate, and customer loyalty.

It's important to note that a business may choose to target one or multiple types of target markets, depending on their specific business objectives and marketing strategies.

Why are target markets important?

Understanding your target market is a crucial aspect of developing a successful business. Below we explore the main reasons why understanding your target market is so important in order to ensure a profitable business.

Better customer segmentation : Understanding your target market allows you to segment your customers more effectively, which in turn helps you tailor your marketing messages and products to meet their specific needs and preferences.

Increased focus and efficiency: Focusing on a specific target market allows you to be more efficient with marketing resources while avoiding wasting time and money on efforts that are not likely to reach or resonate with your target audience.

Improved brand reputation: Understanding your target market can help you establish and maintain a positive brand reputation by allowing you to align your brand with the values and interests of your market.

Increased customer loyalty : By understanding your target market and delivering products and services that meet their needs and expectations, you will foster a loyal customer base that is more likely to recommend your brand to others.

Better decision making: Understanding your target market provides valuable insights that can inform important business decisions, such as product development, pricing strategies and distribution channels for marketing efforts.

Target market vs. target audience?

Often used interchangeably, target market and target audience are not the same thing. Your target market is the end consumer while your target audience is to whom your company advertises. While your target market might fall into your target audience, who you advertise to may not, in the end, be the one who consumes the product.

To clarify, let’s look at an example: Kids toys, for example, have a very clear target market: children. In addition, toys are often marketed toward children who identify with a specific gender category. Nevertheless, kids don’t purchase their toys, their parents do. So toy companies must focus their advertising strategies on parents (the target audience) to sell toys for their kids (the target market).

For example, Generation Alpha , kids born between 2010 and 2025 with millennial parents, play with much different toys than their parents did because millennials have different consumer preferences than their Baby Boomer parents. Rather than shopping in big-box stores for brightly-colored toy packages, millennial parents are more likely to purchase clean, minimalistic, and gender-inclusive toys from Instagram ads or Amazon. Therefore, toy companies are using Millennial preferences (the target audience) to sell toys to their Generation Alpha kids (the target market).

How to determine your target market

Gather consumer data

Know your product’s benefits

Investigate your competitors

Segment your audience

Write a target market statement

Refine your research

01. Gather consumer data

The first step in defining your target market is to learn more about your customers. Even if you’ve just started an online store and don’t have many customers yet, these practices will come in handy further down the line.

Start by gathering information about current and past buyers and try to identify characteristics that they have in common. This data will help you market your product to people with similar interests. If you are still in the early stages of your business and haven’t started selling your product, look at competitor markets and use that information to determine your target market.

Using website analytics tools, social media and email marketing analytics platforms, here are some data points you’ll want to consider:

Age: Do your customers share a common decade or generation? Are they millennials, older adults, or something in between?

Location: Where in the world do most of your customers live? Consider the different cities, countries, and regions.

Language: Which languages do your customers speak? Remember that your customers’ language isn’t necessarily the dominant language of their country.

Spending power: Consider socioeconomic factors that may be affecting your customers. How much money are they willing or able to spend?

Hobbies and career: What do your customers enjoy doing? What are their professions, and what do they do in their spare time?

Stage of life: Where are your customers in life? Are they college students? New parents? Retirees?

If your company is B2B rather than B2C , you’ll want to look for characteristics of companies, rather than individual consumers. These traits include:

Business size: Are the businesses that buy from you small, medium, or large?

Location: Where are these businesses physically located?

Vertical: Which industries are most of these businesses in?

Budget: How have these businesses raised money ? Consider how much they’d be willing or able to spend on products like yours.

Be sure to track this information in an orderly manner so that you can keep your findings organized and easily identify trends. Analyzing these trends will allow you to identify shared characteristics within your customer base. These characteristics will inform your inbound marketing efforts and steer your strategy toward your target audience.

02. Know your product benefits

The next step is to understand your consumers’ motivation behind purchasing your product, rather than a competitor. You can learn this information by speaking to your customers directly, asking for testimonials, and by doing in depth competitor research to understand the difference between your product and theirs.

Get to know the benefits—and not just the features—of your product or service. The features are your product’s characteristics. For example, if your business sells suitcases, you might describe your product as being small, compact and having multiple compartments. Your product’s benefits, on the other hand, are the advantages it brings to your customers. Think about how your product makes someone’s life better or easier. The compact, multi-compartment suitcase offers the benefits of being easy to carry and pack as a carry-on.

It’s vital to understanding how your product fulfills its target market’s specific needs. For the suitcase company discussed above, for instance, the target market would be people who benefit from a lightweight, carry-on suitcase—such as business travelers who take short, frequent trips.

03. Investigate your competitors

Hone in on your target market even further by taking a look at which your competitors are targeting. Of course you won't have access to their customer analytics data, but you can understand their customers with a SWOT analysis .

Take a deep dive into competitor websites, blogs and social channels. Consider who their target market is based on their website content, content marketing strategy, and social media branding. You’ll likely be able to infer details about their audience based on their brand language and tone. You can also check for comments on their social media pages to see which types of people are engaging with their posts.

Take an especially close look at their most successful social media and blog posts. Do these pieces of content have anything in common in terms of their offering or branding? Which interests or needs do they address? Use this information to consider what kinds of qualities or advantages appeal most to consumers within your industry.

04. Segment your audience

At this point, you’ve gathered some information about the characteristics and interests of your target audience. Now, it’s time to use that information to clearly define your customer types. This is going to form the basis of your target market.

The best way to do this is through market segmentation. This involves dividing your customers into different groups, or segments, based on their shared qualities.

You can divide your customers based on:

Geography: Physical location, whether it’s your own city or a different part of the world. Note that if your customers are located around the world, you may need to create a multilingual website, as well as localized ads and marketing materials.

Demographics: Characteristics such as age, gender, race or ethnicity, income level, or marital status.

Psychographics: Inner qualities such as personality, lifestyle, or personal values. These are often a product of geographic and demographic factors such as location, generation, or stage of life.

Behavior: Perceived qualities based on online behavior, such as buyer readiness or frequency of use.

If you’re a B2B company, use similar characteristics but apply them to business. Consider firm demographics—known as firmographics—such as industry, location, customer size, business structure, and performance.

To gain a deeper understanding of your segments, you can also create buyer personas. Also called user personas, buyer personas are imaginary characters with traits and behaviors similar to those of typical customers. Ultimately, these fictional characters represent your target market, helping you gain insights into the needs, desires, and lifestyles of your actual customers.

05. Write a target market statement

Now that you’ve determined the defining features of your audience, it’s time to put your findings on paper. Write a target market statement that focuses on the most important audience characteristics you’ve identified in your research. Your statement should include:

Demographic information about your target market, such as gender and age.

Geographic location of your target market.

Key interests of your target market.

Then, sum it up in a single sentence. For example:

“Our target market is women in their 30s and 40s who live in the United States and enjoy casual, comfortable fashion.”

Doing this will keep your brand identity and marketing efforts consistent. It will also come in useful as you adapt your company’s mission statement to be as relevant as possible for your audience.

06. Refine your research

Defining your target market is based on thorough research, but that doesn’t mean it’s going to be perfect the first time around. Even after you identify your market, you’ll still need to continually test and experiment to get an increasingly precise picture of your customers. Staying on top of your market research can also help you keep up with the times, as consumer interests change over the years with technological developments, generational attitudes and passing trends.

To narrow in on your audience, you’ll need to assess your business success and test your targeting efforts. Take a look at who is actually buying from you and which specific products or services they are purchasing. Try to understand how you can adapt future product development or modify your branding or marketing efforts to better fit your customer base.

Utilize A/B testing with your marketing efforts to test the same ad on different audiences and see which version performs better. Alternatively, you can develop two different creatives, each with their own look and language and compare your audience’s responses. Based on the results, you might need to either adjust your business strategy or revise your target market statement. The bottom line is to build a brand that resonates strongly with your audience. Remember, the more targeted your content, the more effective your lead generation strategies—and the more customers you’ll bring to your brand.

What are examples of a target market?

These website examples clearly cater to their target markets. Take note of the phrases and visuals these websites use.

01. Amanda Darby

Let’s take a look at how nutritionist Amanda Darby appeals to her target market. She aims to address people looking to make healthier food and dieting choices. To do this, she’s created a website that fosters a sense of joy and personal empowerment around food. The light and airy background, coupled with the cheerful images of cooking and eating, instantly makes it clear that she targets people looking for a healthy lifestyle.

She also hones in on her audience even further, using phrases that directly appeal to middle-aged women. In the section of her homepage that discusses her nutrition coaching: “You will be the mom who loves food, her body, and knows life isn't perfect, but is perfectly happy living the life she has vs. waiting for the life she will have when she reaches her goal weight.” By directly addressing the concerns of her target market, Amanda helps her audience feel heard and understood. This strengthens their trust in her brand and persuades them that she is the right coach for their needs.

02. Curtinsmith Guitars

From the very first image that appears across the top of this website, it’s clear that Curtinsmith Guitars is crafting something unique. By displaying photographs of their workshop and describing their guitars as “custom” and “handmade,” they directly single out a target market of those looking for unique, one-of-a-kind guitars. This target market is likely musical, appreciative of craftsmanship and not afraid to spend their money on their passions.

The About Us section of the site confirms this targeting. The owner, Paul, writes, “I find it quite profound to create something which, in itself, will continue to create. It is an absolute joy crafting these instruments and it is my prayer that they continue to be a joy for those who play them and listen to them, for many generations.”

In this statement, the brand makes it clear that it targets musicians who value the creative process. They also allude to the quality of their product, portraying them as long-lasting heirlooms with sentimental value.

03. Lima Cakes

Sona Karapetyan uses her artistic vision to create showstopping celebratory cakes. The About section on her website says that Sona “was always experimenting with graphic art & design” and, “When Sona decided to embark on the cake art journey, she experimented with different textures, shapes and architectural elements to create a unique design language.” It also states that she never creates the same cake twice so each cake is unique to each client.

Her neutral-colored web design and sophisticated copy narrow her target market down to mature individuals who appreciate art. Her website also features images of her cakes, clearly displaying her skills to her potential customers. The prices of her custom-made cakes will reflect the effort that goes into each one. These details show that she likely targets an educated, older, affluent crowd with an appreciation for modern art and design.

What are market segments?

Market segments are subgroups within a larger market that share specific characteristics and needs. These characteristics can include demographics, lifestyle, interests, behavior and purchasing patterns. By identifying and understanding these segments, businesses can tailor their marketing messages, products and services to better resonate with each group. This allows for more targeted and effective marketing efforts.

Target market FAQ

How detailed should a target market be.

The level of detail for a target market depends on your specific business and goals. However, it should be defined enough to create targeted marketing campaigns and avoid wasting resources. Consider including demographic information (age, gender, income, etc.), psychographics (lifestyle, values, interests), and behavioral factors (purchasing habits, media consumption). While details are important, avoid over-segmentation, as it can limit your reach and marketing effectiveness.

What is an example of a target market?

What is the purpose of a target market, what is the best target market, related posts.

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Target Market Segmentation

Target market segmentation helps you market better to potential customers. Let's take a look at what this means and how you can grow your small business.

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arget market segmentation helps you market better to potential customers. It's crucial to boost sales and increase the chances of long-term success.   Let's take a closer look at what this term means and how you can use it to focus your marketing efforts.

What is Target Market Segmentation, and Why Does It Matter?

Target marketing segmentation is where you divide your potential customers into segments. You'll then focus on a few segments (or groups of people) that align most with your product or services. Doing so helps you tap into their needs and desires to attract new sales and increase longevity.   You can also drill it down further by creating a marketing strategy for more specific groups of people  -  such as using different promotions and how you deliver your products or services. That way, it helps your marketing campaigns be more cost-effective, allowing you to spend time only on one focus at a time.   Let's say you have a wedding and event photography business . Instead of spending thousands of dollars on print ads in random publications, you'll first see who your target customers are. Based on this information, you'll then focus your marketing campaigns by placing ads in publications where your target audience is most likely to see them. That way, it'll increase the chances you'll get a return on your investment.  

How Do I Segment My Target Market?

The good news is that you can approach segmenting the market in many ways based on your company's market research. Four common ways are behavioral, demographic, geographic, and psychographic segmentation.  Here's a bit more detail on the types of market segmentation:  

Behavioral Segmentation

This segment looks at how consumers interact with brands and products. For instance, you can look at which platforms your ideal customer most frequents, their social media usage, and their customer journey online.  

Demographic Segmentation

Businesses tend to feel this is the most important criteria to identify their target market. These include age, gender, education level, income level, social class, nationality, family size, marital status, and religion. Knowing these demographics about your ideal customer can help you with how you want to create marketing campaigns (Gen Xers may not understand the slang Gen Z tends to use, for instance).  

Geographic Segmentation

Yes, this segment has to do with details on a consumer's location or where they live. Aside from nationality, you can consider their state, county, town, or city.

Psychographic Segmentation

Businesses can look at elements such as parts of a consumer's personality traits  -  like whether they lean towards being an extrovert or introvert. You can even consider a consumer's belief systems and lifestyles and consumer behavior.  

How to Effectively Create Target Market Segmentation

Creating a target market analysis will help you understand the types of consumers you need to market to and will even help you break into niche markets. Don't worry; creating one isn't a difficult task, though you'll want to make sure you take the time to get it right to ensure effective marketing messages.   Here are four steps you can take.  

1. Gather Accurate and Current Data

Gathering details from outside sources can be incredibly valuable to help you gain better insights into your market segment, potential customers, and even your industry as a whole. Plus, if you're just starting out, you may not have enough internal data to get a good enough view of what customer groups you need to target based on customer needs.   The challenge when gathering data is that there is plenty out there. Make sure what you're using is both current and accurate.  

2. Divide up Market Based on Chosen Characteristics

Now's the time to wade through data and eliminate what isn't relevant to your target market. You'll want to create customer segmentations. Consumers who are most likely attracted to your brand, product, or service will share the same types of characteristics. Identifying these will ensure you're efficient when creating your messaging in your marketing campaigns.  Here are some questions to help you get the ball rolling:

• What do my target customers have in common?
• How does my target customer research products and services?
• How does my target define themselves?

Once you have some shared characteristics, you can then use them to create customer profiles or personas. It will also help give you even better insight into what really matters to them, plus any trends and insights to help you develop more ideas to increase sales.  

3. Gather Intel on Your Competitors

Understanding the competition in the market is critical. This will tell you exactly what your product or service is up against and what tactics you need to take on to compete.  Ask questions like:  How many businesses have a comparable offering to you?  What's their pricing structure?  What reach do they have?  Who do they appeal to most?  You may find that one group of people is very well served by competitors while another group has yet to be tapped into.  Answering these questions will help you identify the most profitable group to target in your marketing plans, as well as identify what types of marketing communications may or may not have worked prior.

4. Use Market Segmentation As Part of Your Business Plan

Now that you've identified your target segment, it's time to use this knowledge as part of your overall business plan. Yes, you want to use the data to create better marketing plans, but this data can also help you tap into other insights. Think about how you can develop new products and services, order the right amount of stock, and even anticipate demand at certain months of the year.   That is the essence of knowing your market. For instance, if you know you want to test certain products, look at how you can further segment your target market to see whether you should include this new item as part of your regular offerings. Or, if you know that sales are slow at a particular time of the year, you can look at the data to create campaigns to encourage quick sales.  

Using Target Market Segmentation in Your Marketing Strategy

All in all, the goal of target market segmentation is to inform your company's overall business and marketing strategy. It'll help you easily create goals and develop ideas that are more audience-centric.   Doing so means you know what they want and when they want it. This will increase brand loyalty in your customer base. Imagine how your business will benefit from this wealth of knowledge!

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Target market: definition, purpose, examples, & best practices.

11 min read Aiming for your target market with a highly focused marketing strategy is now easier than ever with the support of insights from data and machine learning. Read our in-depth guide to learn how to successfully reach your target market.

What is a target market?

A target market is a subset of the audience you’re aiming to reach (your market). It is made up of a group of customers that have one or more commonalities between them and are most likely to be interested in your products.

These commonalities might be:

• Demographic targeting : They all have common features, such as age, income level, family status, level of disposable income, and marital status
• Psychographic segmentation : They all hold common interests, values, wants, goals, political leanings or lifestyle choices
• Behavioral patterns: They all have common behaviors, such as when they purchase a product or how often they buy
• Geographic segmentation : They are all located in the same region or local area

There are other factors that might group your target market’s members together, and, more often than not, there might be a blend of multiple factors. Keep in mind that there’s also a slight variation if you are looking for B2B customers, as this might include:

• Firmographics: The details about the businesses you’re targeting, such as industry, company size, global or regional spread
• Buying style: The businesses’ buying policies, budgets or stakeholder involvement
• Company behavior: How much they purchase and when, their appetite for risk

Free eBook: 2024 global market research trends report

What is target marketing?

Target marketing is the process of reaching out to particular market segments of your potential customers or your existing audience. This target market is defined by their commonality as mentioned above, usually within a range, such as consumers aged 25-45 or those working in the hospitality industry.

Your marketing strategy will be tailored to that particular niche market, and will encompass all the channels that the target audience might use. Your marketing should be based on market research and take into account the needs and wants of that specific group. Ideally, this means that you have data-led insights about your target market to allow you to create digital marketing or offline marketing strategies that work effectively.

What is consumer targeting?

Where your target market is the broader group of individuals that have a feature in common, your target consumers are the individuals you believe are most likely to purchase your product or service. Your marketing efforts for consumer targeting will be aimed at a more specific audience, such as 35-year-olds or hotel managers.

Consumer targeting vs market segmentation

Consumer targeting is the process of marketing to the specific audience you think will potentially buy your products, based on data-led insights on prior sales data and more.

Market segmentation is a broader process, being the general division of your entire potential audience into target markets, based on the features they share or the products and services they’d be interested in.

Both are necessary processes to narrow down the focus of your marketing efforts for the best results.

Why should you create a target marketing strategy?

Creating a marketing strategy for a specific target market has several advantages over a more general approach.

• You’re more likely to reach an audience interested in your products or services. Having a clear idea of who would be most interested in your offering means you don’t waste time marketing to those who are less likely to buy.
• You can create a more appealing and effective marketing strategy. Knowing your target audiences’ distinct features means you can create a marketing approach that will be more appealing to them.
• You’ll stand out from the competition. By honing in on your target customers and adapting your strategy accordingly, you’ll be ahead of the 76% of marketing executives that don’t use behavioral data to target their marketing efforts .
• You’re able to target and retarget your audience for better outcomes. Comscore found that retargeting customers led to a 1046% uplift in searches for the advertised brand.
• You can discover which customers are more likely to pay a premium for your product. Increase profitability and revenue by targeting the target audience with the highest ROI.

How to target market segments

Step 1: finding your target markets.

Whether you’re planning on exploring target markets for a new or an established business, market research will be vital to discover the most fertile areas for growth. Here are a few ideas on how to define your target market:

Study your current customers

Your current customers have a wealth of information that can help you create a marketing plan for your ideal target market. By gathering data, either through customer feedback channels such as surveys or focus groups, or by examining operations data such as customer purchase patterns, you can develop a persona that describes your ideal customer. What common characteristics do your biggest spenders have? Start by sending a survey with open-ended questions to a small representative sample of customers, perhaps 300 or more, to understand their values in their own words.

Examine the competition

Your competitors are likely targeting the same audiences as you. Analyze how they promote their product or service, and see how their ideal customer responds. What are they providing that you don’t, and what can you give customers that isn’t currently on the market?

Understand the motivations for purchase

Your customers are often telling you in their own words how they feel about your offering and why they have chosen your brand—you just need to listen. Use sophisticated listening tools, such as conversation analytics, to understand things such as customer intent, emotion, effort, and motivation. This will help you build a more solid picture of what your ideal target market looks like, and what challenges your offering solves for them.

Identify groups of customers

Your target markets will be made up of groups of ideal customers. What key characteristics link them together? Build a list of target markets, all defined by distinct features that you can target with your marketing efforts.

Create personas

Developing a persona, or a fictional character that embodies the type of customer you’d like to pinpoint, means you can better reach your target audience. Identify their roles, goals, and pain points and understand how they like to communicate. By helping them reach goals, fulfill role requirements and solving their pain points, you can better hone your marketing efforts.

Judge near-term vs longer-term opportunities

Not all your target markets will be worth targeting in the near term, perhaps because of the time of year, their growth projections and other factors. It’s a good idea to consider which target market is right for immediate targeting, and which segments are better kept for the longer term.

Evaluate product-market fit and positioning

Where will your value proposition have the most impact? Your product market fit will not be the same for every target market you identify, and sometimes you can position your product more effectively for one market than another. Evaluate which target markets will provide the greatest ROI and focus efforts there first.

Understand how to reach your target audience

Your target market will have preferences for how they want to engage with your brand. Learning how they interact with you by examining internal data and analyzing customer behavior will help you to speak to your target market on the platforms they prefer.

Step 2: Create an effective targeting strategy

There is the option of engaging in mass marketing, creating marketing campaigns designed to reach as many people as possible. However, for an effective strategy, you should forgo the entire market and target only the markets and customers you believe will be responsive.

Consider which marketing strategy will be most effective

Mass marketing is a one-size-fits-all approach that won’t have the same impact as targeting a specific audience. Here are some alternatives:

Differentiated marketing: This marketing strategy develops different marketing campaigns for each target market’s preferences. This helps to demonstrate your value proposition for each target audience, rather than marketing generally about your products and services. This may require more initial budget, as various marketing campaigns will be needed, but is more likely to have a greater impact on each individual target market.

Niche marketing: Through your market research, you may have identified a particular market where a small target audience has needs that are not being met by the offerings of your competitors. Creating a highly targeted marketing campaign for this specific audience can be lucrative if the gap in the market is not being served and if the potential purchases by this audience will be high in value.

Micromarketing: Even more targeted than niche marketing is micro marketing. Taking a small segment of your already-small niche market, you divide the audience into further characteristics that unite them, such as geographic location. Again, focusing on this hyper-specific target market can pay dividends if their potential spend outweighs the cost of serving them such a specific marketing campaign.

Create an omnichannel strategy with customer preferences in mind

Your market research should have uncovered how your target audience prefers to communicate. Frequently, the purpose of the engagement—to buy a product, resolve a query, find an answer—dictates how customers want to be reached. As a result, it’s best to create an omnichannel marketing strategy that can guide audiences on a personalized customer journey.

Step 4. Implement and learn

Once you’ve established your target market and understand how to reach them, it’s time to test your marketing campaigns and targeted advertising, and then learn from the response. Evaluations to consider include:

• What drives customers to purchase, and what has less of an effect on buying behaviors?
• Which target markets are the most lucrative, and why?
• What new market segments could be targeted with similar strategies?
• How measurable are the results of your strategies?
• How accessible are your strategies to all of your target customers?

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The Ultimate Guide to Product Marketing in 2023

Learn about the power of product marketing, how it can help your bottom line, and impact the success of your products.

THE ULTIMATE PRODUCT MARKETING GO-TO-MARKET KIT

Ensure that your whole team is aligned with four planning and internal enablement templates for your next product launch.

Updated: 02/02/23

Published: 02/02/23

Product marketing is essential, even if you only sell one or two products at your organization.

But what is product marketing ? How do you market a product, and how does that differ from conventional marketing strategies? Let’s find out.

What Is Product Marketing?

Why Is Product Marketing Important?

Product Marketing Duties

Product Marketing Strategy

Product marketing examples, what is product marketing.

Product marketing is the process of bringing a product to market, promoting it, and selling it to a customer. Product marketing involves understanding the product’s target audience and using strategic positioning and messaging to boost revenue and demand for the product.

What makes product marketing unique? How is it different from conventional marketing? Let's unpack the differences.

Product Marketing vs. Conventional Marketing

Product marketing is strategic whereas conventional marketing is all-encompassing.

Product marketing is considered a component of conventional marketing. In fact, if you look at the seven Ps of marketing , you’ll see product marketing is one of the most important aspects of a business’s marketing efforts.

Free Product Go-to-Market Kit

Free templates to ensure that your whole team is aligned for your next product launch.

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Product marketing is about understanding a specific product’s audience deeply and developing that product’s positioning and messaging to appeal to that audience. It covers the launch and execution side of a product in addition to the marketing strategy for the product — which is why the work of a product marketer lies at the center of a business’s marketing, sales, and product teams.

Conventional marketing is focused on broader topics under the umbrella of marketing, such as lead generation, SEO, and anything related to acquiring and converting new leads and customers . It’s about promoting the company and brand as a whole, including the products sold. These marketers make sure there’s a consistent, on-brand message behind all of the company’s content.

To understand it better, let’s look at product marketing goals.

Product Marketing Goals

Product marketing is focused on driving demand for and adoption of a product among existing customers. It’s focused on the steps people take to purchase your product so product marketers can build campaigns to support this work.

Usually, product marketing is executed with several goals in mind:

1. Understand your customers better.

When you implement a product marketing strategy, your target audience can see the value of having that specific product in their lives. Understanding how many customers gravitate to your product lets you conduct customer research.

2. Target your buyer personas effectively.

Alongside understanding your customers, you can figure out the type of buyer persona to target in the future. Knowing the exact needs of your target can help you when innovating your product to better suit their needs. Creating a value proposition can help with this. 

3. Learn about your competitors (products and marketing tactics).

When you market your product, you can compare your strategy and results to your competitors. What features and benefits of their products make a statement within the market? What ideas haven’t they explored? What does their product offer that yours doesn’t? You can use this research to your advantage when crafting your product marketing strategy.

4. Ensure the marketing, product, and sales teams are all on the same page.

Making your product offering abundantly clear for buyers and employees is mutually beneficial. Every team working together in your business can better understand the product's purpose and better communicate that in their operations.

5. Position the product appropriately in the market.

In product marketing, you want your product, brand image, and tone consistent and evoke the right feelings intended for your audience. When you brainstorm your brand positioning , some questions to consider are:

Is this product suitable for today’s market?

How is this product different from our competitors'?

Can we further differentiate this product from our competitors' offerings?

Are there any products we’ve sold in the past that we wouldn’t market or sell again? If so, why not?

6. Boost revenue and improve sales.

There are also questions you, as a product marketer, will have to ask yourself and reflect on regarding your product. Asking yourself these questions will help you ensure your product is successful among customers.

Is this product appropriate for our customers today?

How is this product unique from similar products of our competitors?

Is there a way to further differentiate this product from our competitors? 

Are there any products we’ve sold in the past that we wouldn’t market or sell ever again now that we look back? If so, why not?

As you can see, product marketing requires you to look at your products strategically to ensure they’re successful among customers in your current market.

Why is product marketing essential?

Product marketing is a critical part of any business’s marketing strategy. Without it, your product won’t achieve its maximum potential among your target audience.

To illustrate its importance, let’s look at an example of successful product marketing. During the 1950s, Volkswagen sold a bus. Although now considered a classic vehicle, the bus remains an icon for the car company decades later.

The cool part? Volkswagen announced their new VW Bus — it’s electric and features sleek, modern styling. Volkswagen’s marketing for the vehicle is eye-catching, unique, and fun, and it complements the original “hippie” vibe the company was once known for.

Image Source

Volkswagen also released a TV commercial for the bus that’s clever, minimalist, and on-brand. It introduces the new vehicle with the song The Sound of Silence playing in the background (hint: electric cars are silent) and ends with a short message on the screen for viewers to read: “Introducing a new era of electric driving.”

This sentiment touches on the fact Volkswagen is contributing to society’s interest in electric, eco-friendly vehicles. It also relates to this being a new era for the bus.

This is why product marketing is important: Because it highlights not the company but the product itself, ensuring longevity in the market.

But who works on this type of marketing? Who helps create content that excites consumers about new and updated products, like the Volkswagen bus? Who encourages consumers to buy? Product marketers.

Now, let’s take a look at the specific responsibilities that product marketers (or product marketing managers) face in their typical day.

Product Marketing Responsibilities

• Identify the buyer personas and target audience for your product.
• Successfully create and carry out your product marketing strategy.
• Work with and enable sales to attract the right customers for your new product.
• Determine your product’s positioning in the market.
• Ensure the product meets the needs of your target audience.
• Keep your product relevant over time.

Your responsibilities as a product marketer may vary slightly based on industry, company, products, and company size and resources. If you’re working for a startup, you may be a product marketer who also helps create the content the broader marketing team produces due to limited resources and budget. As the business grows, you may move onto a team whose sole job is product marketing.

Let’s take a look at six common product marketing responsibilities.

1. Identify the buyer personas and target audience for your product.

You must identify the buyer personas and audience for your product so you can target customers in a convincing way that makes them want to purchase. This will allow you to tailor your product and its features to solve your audience's challenges.

Pro tip: Use templates to create buyer personas for your business. A tangible outline of whom you’re catering to can help align different teams in your business and better position your product in the marketplace.

2. Successfully create, manage and carry out your product marketing strategy.

A product marketing strategy (which we’ll review shortly) allows you to create, build, and execute content and campaigns — this supports the steps that will lead your buyer personas and customers to make a purchase.

3. Work with and enable sales to attract customers for your new product.

As a product marketer, you have to mamusta direct relationship with sales. You’ll work with sales to identify and attract the right customers for the product at hand and provide sales enablement materials to reps to ensure they understand the product inside and out, along with its features.

This way, you and your teams are on the same page in termregarding being shared with customers, allowing you to provide a consistent, on-brand experience for anyone who comes in contact with the product.

4. Determine your product’s positioning in the market.

One of the most important parts of your job is determining the product’s positioning in the market. Think about this process in terms of storytelling — your positioning requires you to create and tell the story of your product.

As a product marketer, you’ll work with the broader marketing team and the product team to tell this story by answering critical questions like:

Why was this product made?

Whom is this product made for?

What challenges does this product resolve?

What makes this product unique?

5. Ensure your product meets the needs of your target audience.

You must also make sure your product meets the needs of your customers and target audience. Through the research to determine your buyer persona and target audience, you should have uncovered the pain points and challenges you’re working to solve with your product.

If your product doesn’t meet your customers' needs, they’ll have no reason to make the purchase or choose your product over your competitor’s.

6. Keep your product relevant over time.

Your product needs to stay relevant over time. As needs, expectations, and challenges change and evolve, it’s your job to ensure your product marketing strategy and the products themselves remain relevant among customers.

This means you may have to manage slight changes in your product marketing strategy (which we’ll discuss next) or updates and modifications to the product itself (you’ll likely work with the product team, which creates the effect, to do this).

7. Guide marketing strategies for new products.

In product marketing, you'll need to pay close attention to what worked in your strategy and what didn't so you can better plan marketing strategies for new and future custom products . Pay attention to where your audience is and what they are looking for. What channels got the most traction and led to more converted leads?

All this information and more should be applied to marketing strategies for new products.

Your product marketing strategy serves to guide the positioning, pricing, and promotion of your new product. It helps you take your product from development to launch and informs what new audience(s) and markets to which to launch and market your product.

Now, let’s take a look at five steps that can help you optimize your product marketing strategy.

1. Define your product’s target audience and buyer personas.

As a product marketer, one of the main roles you have is to define a specific target audience and create buyer personas for the product being sold (different products will likely have different target audiences). This is the first step to marketing your product.

By understanding your customers and their needs, challenges, and pain points, you’ll be able to end that all aspects of your product marketing strategy (as in the rest of the steps we’ll define below) are tailored to that target customer and persona. This way, the product and the marketing content created for the product will resonate with your audience.

2. Determine the positioning and messaging to set your product apart.

After your customer research and learning about your audience, you’ll have identified their needs, challenges, and pain points. From here, you can think about how to highlight the ways your product resolves those challenges for your customers.

However, that doesn't necessarily mean you’ve differentiated yourself from your competitors. After all, they are your competitors because they solve your customers' needs in a similar way to your company.

The key to setting your product apart is positioning (which we touched on earlier ) and messaging . Positioning answers key questions your customers might have about your product and what makes it unique and then turns those answers into the main points behind your product’s marketing strategy.

It’s your job as the product marketer to ensure your customers and audience know the answers to these questions and don't have to dig around for (or make assumptions about) them.

Examples of questions you’ll need to answer to develop your product’s positioning and messaging include the following:

What specifically makes our product unique?

Why is our product better than our competitors’?

Why are our product’s features ideal for our target audience?

What will our customers get out of our product that they cannot get from our competitors’ products?

Why should our customers trust and invest in us and our product?

Once you’ve answered these questions, you can compile these responses into one impactful and shareable statement that captures your positioning and messaging. To do this, follow these steps:

Turn the answers to the positioning and messaging questions into an elevator pitch .

Use action words to excite your customers.

Ensure the tone of your statement captures the style of your brand.

Focus on the benefit of your product as a whole (not just one specific feature).

Pro Tip: As product marketers, you should ensure the sales, product, and (the broader) marketing teams are also aware of your positioning and messaging around the product so they, too, can communicate the same information to prospects and current customers.

This allows you to ensure the entire company is consistent in the content and information they share about your product. Additionally, you can provide this information to your support team if you think it’s necessary, as they may be fielding support calls and working with your customers who’ve already invested in the product.

3. Set goals for your product.

Next, you’ll want to set goals for your product. These will vary based on your specific product, the type of company you work for, your overall marketing goals, and more — your goals will be specific to your business and situation. However, let’s review some common goals product marketers aim to achieve:

Increase revenue

Engage with customers

Improve market share

Gain customers from competitors

Boost brand recognition

Pro Tip: Feel free to combine several goals or choose one to focus on — every company and product will have different plans. The key is ensuring you view and set these targets in the SMART goal format, meaning they’re specific, measurable, attainable, realistic, and time-bound.

Use a free template to help you create and achieve your SMART goals.

4. Price your product.

As a product marketer, you’ll also have to contribute to the discussion of the price of your product . Depending on your company, you might work with other teams on this part of the strategy, or it might be a job just for you and your fellow product marketers. Either way, you can consider competitive vs. value-based pricing.

Competitive vs. Value-Based Product Pricing

Competitive pricing means you’re basing your product’s price off similar products your competitors sell. It’s ideal for companies that have an effect similar to one that several other companies sell.

Suppose you believe your unique features warrant a significantly higher price e of your competitors’. In that case, you might price your product above the other similar products on the market. An excellent way to evaluate the fairness of the pricing of all of your competitors is by studying financial reports and industry trends.

Value-based pricing allows you to maximize your profit, although it’s a bit more time-consuming to establish in comparison to competitive pricing. It’s ideal for companies selling a product with very few competitors on the market or one with exceptionally new and unique features.

Value-based pricing quantifies your item’s value in a way your customer can relate to their profitability. It allows you to base your product’s price on its value for your customer rather than whatever the market, industry trends, and your competitors say.

5. Launch your product.

Now it’s time for the most impoessentialt of your role as a product marketer — not to mention, the most exciting: the launch of the product you’ve been marketing.

There are two main parts to the launch to focus on as a product marketer: the internal launch (what goes on within your company upon product launch) and the external launch (what goes on outside of your company, with customers and audience members, upon product launch).

Internal Aspects of a Product Launch

As previously stated, your job as a product marketer entails ensuring the entire organization is on the same page about your product. This way, your customers only receive consistent and accurate details about the product.

The marketing, product, and sales teams at your company should be aware of the following information:

The product’s benefits

Any available product demo information

Sales training opportunities on your product and details about how it’s used

What the positioning and messaging looks like

Who your buyer personas, and ideal customers are

What the goals for your product include

What your product’s features are

The pricing of your product

How your product is being launched to customers

Now, you might be wondering how to provide this information to marketing, product, and sales. Which channels are ideal for sharing these details with your fellow employees?

Here are a few examples of ways to do this:

Sales enablement kit (ideal for sales)

Presentation (ideal for the broader marketing department and product)

Knowledge base (ideal for support)

External Aspects of a Product Launch

Externally, there are many ways to market your product launch so your current base of customers, prospects, and target audience learn about whatever it is you’re selling.

First, determine where you’re going to focus your product marketing efforts. Here are some examples of channels and places to do this (you might choose several of these or just one to focus on depending on your needs, goals, and resources).

Social media

Product launch event

Website landing page

Exclusive product preview (prior to the official launch)

Promotional event/ campaign (in-person and/ or online)

On whatever channel you choose to focus your product launch marketing efforts, you should include relevant product information ( focused on your positioning and messaging ) so prospects and customers can learn all about your product and why they need it. This includes your product’s features, what makes it unique, pricing, demos for customers, training for customers, and any other materials you’ve created and want to share.

Congrats! You’ve just worked through the steps to marketing a product. Remember, this process is one that should be thought about and updated as your products change and evolve so they remain relevant among your customers. (This shouldn’t be an issue as long as you have a member of your team focused on product marketing, considering it’s one of their main responsibilities.)

Now that you know how to create a product marketing strategy, how do you market a product across your channels? Let’s take a look.

How to Market a Product

• Create a product marketing deck for other marketing teams.
• Publish product-focused content on your blog.
• Insert product mentions naturally in your existing marketing collateral.
• Try comarketing with a similar brand.
• Launch PPC ads and bid on your and competitors’ keywords.
• Focus on the benefits, not the features.

1. Create a product marketing deck for other marketing teams.

Non-product marketers — i.e, social media marketers and content marketers — won’t have the full know-how on your product, impeding them from marketing it properly on customer-facing channels. As a product marketer, your job isn’t necessarily to execute marketing campaigns or write content. Instead, your job is to enable specialized teams — such as your social media and content team — to market your company’s products effectively.

The first step is to provide a deck, presentation, or document that outlines your product marketing strategy to other marketers. That way, when it’s time to execute on a strategy, they know the positioning they are aiming for, the wording they are to use, and the personas they are targeting.

2. Publish product-focused content on your blog.

A blog is primarily a place to attract inbound leads. Rather than trying to hammer them with information about your product, you might write content that helps them solve an issue instead, and then offer them a free guide or ebook to help them further.

But did you know that your team can publish content that attracts inbound leads and encourages purchases and sign-ups? At HubSpot, we call this product-focused content. It’s just as helpful as our other content, but with a critical difference: It has a call-to-action to try one of HubSpot’s products.

For instance, our blog post, What is a CMS and Why Should You Care? , aims to inform readers about content management systems, but then includes a call-to-action to try CMS Hub .

While the blog post is still informative and not overtly promotional, it still promotes one of our products. In the same way, you or your content team can write helpful content for your readers, help them the inbound way, and still encourage customers to try your offerings.

3. Insert product mentions naturally in your existing marketing collateral.

If you’ve had a longstanding marketing strategy prior to beginning product marketing, we have good news: You can retroactively market your product in existing collateral. For instance, if you already have an expansive library of blog posts, you can update them with information about your products (so long as the mention is natural).

Recent social media posts can also be candidates for an update, and your website content should also change to show your brand new product. Internal links from related pages can help drive traffic to your new product pages.

In addition, if your marketing team has created marketing offers in the past, you can have them update the offer and add a call-to-action to try your newest product — like in this example from HubSpot’s Case Study Templates offer , where we prompt users to try CMS Hub.

4. Try comarketing with a similar brand.

Comarketing is an excellent way to market your product to a related audience. You can do something as simple as filming a video together, writing a collaborative blog post, posting on each other’s social channels, or running a webinar.

Your product should be an excellent match for the other company’s customers. Ideally, both of your products can be used in conjunction and not compete directly. For instance, Ankor Software and HubSpot partnered for a webinar, but Ankor Software doesn’t compete with HubSpot CRM — it complements it.

5. Launch PPC ads and bid on your and competitors’ keywords.

Pay-per-click (PPC) is an essential product marketing tactic. While content and social media marketing can help you attract inbound leads, you can get the attention of even more potential customers by posting PPC ads on search engines.

When setting up your PPC campaign, bid not only on general product keywords (such as “crm software” or “[insert category]”), but on your own branded terms and your competition’s as well. That way, customers who are considering purchasing the same product from a competitor will consider you as an alternative.

6. Focus on the benefits, not the features.

Regardless of the channel or platform you’re promoting your product on, highlight the benefits customers will experience, not the features of your product. Not only can features feel jargony (like “Customizable attribution models” or “Automated contact workflows”), but they shroud the benefits and alienate non-technical customers.

Try, instead, leading with the benefits, such as “Know where exactly your leads come from” or “Save time by automating tasks using contact workflows.” For instance, on the Marketing Hub page, the features snapshot reads:

“ Attract visitors through blogging, social media, ads, and more. Convert visitors into customers with landing pages, email, marketing automation, ABM, and more. Track ROI with revenue attribution reporting. All powered by the customer data in your CRM to enable personalization at scale .”

Using benefit-first language will engage customers and prompt them to try your products. The “how” of the benefit — such as features or functionalities — come after.

Let's review four real-life examples of stellar product marketing.

Apple is a household name for leading technology products and software. Not only are its products gorgeously well-designed; it’s also super useful. But Apple's product marketing doesn't focus on the many product features — it markets the user benefits.

Apple doesn't simply list the impressive features of their products; the brand uses those features to tell consumers who they could be and how they could work if they have those products. Apple tells a narrative using its products and encourages people to buy in the process.

Billie is a women's razor brand. In a highly competitive market, Billie has helped its products stand out. How? It established a sharp competitive edge (no pun intended) by doing what no razor brand had done before — show body hair in its advertising.

Not only did this advertising approach get Billie's audience talking about the brand, but they also appreciated the brand's accurate portrayal of women's bodies and body hair. These differentiators were more than enough to set Billie apart from other razor brands and products.

3. Pepsi Cola

As a brand, Pepsi has positioned itself as one with youthful energy and excitement, and this can be seen consistently through its product marketing campaigns.

Pepsi's customers are mainly aged between 13 and 35 years old with modern and active lifestyles, so it only makes sense to hire popular celebrities like Doja Cat for a commercial in a homecoming tailgate.

Through highly targeted positioning, repetitive advertising, and consistent branding, Pepsi has become a truly global household name and product.

4. MailChimp

There are dozens of email marketing tools on the market, but MailChimp hasn't been fazed by competition. In fact, the company has risen above its competition by positioning itself as more than an email marketing tool: it's an all-in-one marketing platform that helps businesses grow.

Like Apple, MailChimp primarily highlights its benefits for the end-user, not just its product features. A recent rebranding and site redesign further drives this narrative home.

Start Marketing Your Products

Product marketing is the process through which a company brings a product to market. Being a product marketer (or product marketing manager) means you’re at the center of your company’s marketing, sales, and product teams.

You’re an integral part to the success of your product, as you create and manage your product’s specific marketing strategy, but you also serve as a liaison between all three of these departments, ensuring everyone is on the same page with your product, it’s features, capabilities, and more. So, start developing your latest product’s marketing strategy to ensure it’s a success among your target audience and customers.

This post was originally published in February 2020 and has been updated for comprehensiveness.

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• Content Marketing

35 Content Marketing Statistics You Should Know

Stay informed with the latest content marketing statistics. Discover how optimized content can elevate your digital marketing efforts.

Content continues to sit atop the list of priorities in most marketing strategies, and there is plenty of evidence to support the reasoning.

Simply put, content marketing is crucial to any digital marketing strategy, whether running a small local business or a large multinational corporation.

After all, content in its many and evolving forms is indisputably the very lifeblood upon which the web and social media are based.

Modern SEO has effectively become optimized content marketing for all intents and purposes.

This is when Google demands and rewards businesses that create content demonstrating experience, expertise, authoritativeness, and trustworthiness (E-E-A-T) for their customers – content that answers all of the questions consumers may have about their services, products, or business in general.

Content marketing involves creating and sharing helpful, relevant, entertaining, and consistent content in various text, image, video, and audio-based formats to the plethora of traditional and online channels available to modern marketers.

The primary focus should be on attracting and retaining a clearly defined audience, with the ultimate goal of driving profitable customer action.

Different types of content can and should be created for each stage of a customer’s journey .

Some content, like blogs or how-to videos, are informative or educational. Meanwhile, other content, like promotional campaign landing pages , gets to the point of enticing prospective customers to buy.

But with so much content being produced and shared every day, it’s important to stay updated on the latest trends and best practices in content marketing to keep pace and understand what strategies may be most effective.

Never has this been more true than in 2024, when we’re in the midst of a content revolution led by generative AI , which some feel represents both an opportunity and a threat to marketers.

To help you keep up, here are 35 content marketing statistics I think you should know:

Content Marketing Usage

How many businesses are leveraging content marketing, and how are they planning to find success?

• According to the Content Marketing Institute (CMI), 73% of B2B marketers, and 70% of B2C marketers use content marketing as part of their overall marketing strategy.
• 97% of marketers surveyed by Semrush achieved success with their content marketing in 2023.
• A B2B Content Marketing Study conducted by CMI found that 40% of B2B marketers have a documented content marketing strategy; 33% have a strategy, but it’s not documented, and 27% have no strategy.
• Half of the surveyed marketers by CMI said they outsource at least one content marketing activity.

Content Marketing Strategy

What strategies are content marketers using or finding to be most effective?

• 83% of marketers believe it’s more effective to create higher quality content less often. (Source: Hubspot)
• In a 2022 Statista Research Study of marketers worldwide, 62% of respondents emphasized the importance of being “always on” for their customers, while 23% viewed content-led communications as the most effective method for personalized targeting efforts.
• With the increased focus on AI-generated search engine results, 31% of B2B marketers say they are sharpening their focus on user intent/answering questions, 27% are creating more thought leadership content, and 22% are creating more conversational content. (Source: CMI)

Types Of Content

Content marketing was synonymous with posting blogs, but the web and content have evolved into audio, video, interactive, and meta formats.

Here are a few stats on how the various types of content are trending and performing.

• Short-form video content, like TikTok and Instagram Reel, is the No. 1 content marketing format, offering the highest return on investment (ROI).
• 43% of marketers reported that original graphics (like infographics and illustrations) were the most effective type of visual content. (Source: Venngage)
• 72% of B2C marketers expected their organization to invest in video marketing in 2022. (Source: Content Marketing Institute – CMI)
• The State of Content Marketing: 2023 Global Report by Semrush reveals that articles containing at least one video tend to attract 70% more organic traffic than those without.
• Interactive content generates 52.6% more engagement compared to static content. On average, buyers spend 8.5 minutes viewing static content items and 13 minutes on interactive content items. (Source: Mediafly)

Content Creation

Creating helpful, unique, engaging content can be one of a marketer’s greatest challenges. However, innovative marketers are looking at generative AI as a tool to help ideate, create, edit, and analyze content quicker and more cost-effectively.

Here are some stats around content creation and just how quickly AI is changing the game.

• Generative AI reached over 100 million users just two months after ChatGPT’s launch. (Source: Search Engine Journal)
• A recent Ahrefs poll found that almost 80% of respondents had already adopted AI tools in their content marketing strategies.
• Marketers who are using AI said it helps most with brainstorming new topics ( 51%) , researching headlines and keywords (45%), and writing drafts (45%). (Source: CMI)
• Further, marketers polled by Hubspot said they save 2.5 hours per day using AI for content.

Content Distribution

It is not simply enough to create and publish content.

For a content strategy to be successful, it must include distributing content via the channels frequented by a business’s target audience.

• Facebook is still the dominant social channel for content distribution, but video-centric channels like YouTube, TikTok, and Instagram are growing the fastest .  (Source: Hubspot)
• B2B marketers reported to CMI that LinkedIn was the most common and top-performing organic social media distribution channel at 84% by a healthy margin. All other channels came in under 30%.
• 80% of B2B marketers who use paid distribution use paid social media advertising. (Source: CMI)

Content Consumption

Once content reaches an audience, it’s important to understand how an audience consumes the content or takes action as a result.

• A 2023 Content Preferences Study by Demand Gen reveals that 62% of B2B buyers prefer practical content like case studies to inform their purchasing decisions, citing “a need for valid sources.”
• The same study also found that buyers tend to rely heavily on content when researching potential business solutions, with 46% reporting that they increased the amount of content they consumed during this time.
• In a recent post, blogger Ryan Robinson reports the average reader spends 37 seconds reading a blog.
• DemandGen’s survey participants also said they rely most on demos ( 62% ) and user reviews (55%) to gain valuable insights into how a solution will meet their needs.

Content Marketing Performance

One of the primary reasons content marketing has taken off is its ability to be measured, optimized, and tied to a return on investment.

• B2C marketers reported to CMI that the top three goals content marketing helps them to achieve are creating brand awareness, building trust, and educating their target audience.
• 87% of B2B marketers surveyed use content marketing successfully to generate leads.
• 56% of marketers who leverage blogging say it’s an effective tactic, and 10% say it generates the greatest return on investment (ROI).
• 94% of marketers said personalization boosts sales.

Content Marketing Budgets

Budget changes and the willingness to invest in specific marketing strategies are good indicators of how popular and effective these strategies are at a macro level.

The following stats certainly seem to indicate marketers have bought into the value of content.

• 61% of B2C marketers said their 2022 content marketing budget would exceed their 2021 budget.
• 22% of B2B marketers said they spent 50% or more of their total marketing budget on content marketing. Furthermore, 43% saw their content marketing budgets grow from 2020 to 2021, and 66% expected them to grow again in 2022.

Content Challenges

All forms of marketing come with challenges related to time, resources, expertise, and competition.

Recognizing and addressing these challenges head-on with well-thought-out strategies is the best way to overcome them and realize success.

• Top 3 content challenges included “attracting quality leads with content” ( 45% ), “creating more content faster” (38%), and “generating content ideas” (35%). (Source: Semrush’s The State of Content Marketing: 2023 Global Report)
• 44% of marketers polled for CMI’s 2022 B2B report highlighted the challenge of creating the right content for multi-level roles as their top concern. This replaced internal communication as the top challenge from the previous year.
• Changes to SEO/search algorithms ( 64% ), changes to social media algorithms (53%), and data management/analytics (48%) are also among the top concerns for B2C marketers.
• 47% of people are seeking downtime from internet-enabled devices due to digital fatigue.
• While generative AI has noted benefits, it also presents challenges for some marketers who fear it may replace them. In Hubspot’s study, 23% said they felt we should avoid using generative AI.
• Another challenge with AI is how quickly it has come onto the scene without giving organizations time to provide training or to create policies and procedures for its appropriate and legal use. According to CMI, when asked if their organizations have guidelines for using generative AI tools, 31% of marketers said yes, 61% said no, and 8% were unsure.

Time To Get Started

As you can clearly see and perhaps have already realized, content marketing can be a highly effective and cost-efficient way to generate leads, build brand awareness, and drive sales. Content, in its many formats, powers virtually all online interactions.

Generative AI is effectively helping to solve some of the time and resource challenges by acting as a turbo-powered marketing assistant, while also raising a few procedural concerns.

However, the demand for content remains strong.

Those willing to put in the work of building a documented content strategy and executing it – by producing, optimizing, distributing, and monitoring high-value, relevant, customer-centric content, with the help of AI or not – can reap significant business rewards.

More resources:

• 6 Ways To Humanize Your Content In The AI Era
• Interactive Content: 10 Types To Engage Your Audience
• B2B Lead Generation: Create Content That Converts

Featured Image: Deemak Daksina/Shutterstock 

Jeff has been helping organizations manage, measure and optimize their Web presences for over 20 years. He has deep knowledge ...

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Wall Street's main stock indexes were set to open sharply lower on Wednesday after a hotter-than-anticipated inflation reading dampened hopes of the Federal Reserve kicking off the monetary easing cycle in June.

How to Tap Into Underserved Markets

Robbie Kellman Baxter

7 min. read

Updated April 9, 2024

Retail stores are closing in large numbers. What does this tell you?

For starters, it confirms that the way consumers shop has fundamentally changed. They have grown more discerning and have more choice. High end consumers are willing to pay a premium for luxury products and services, as we’ve seen with everything from Tesla to Peloton and Whole Foods. Mainstream consumers expect selection, convenience, and competitive pricing, and have all kinds of new options.

But there’s still room for innovation among at least one segment—organizations targeting lower income consumers may be a bright star in an increasingly dismal picture.

Certainly, large companies have gotten the message. Amazon, for example, may be more well known for its one-click convenience and popularity among millennials. But they’ve recently begun offering a $5.99/month subscription to Amazon Prime for people with EBT Cards. In contrast to their standard pricing of $100/year or $10.99/month, this is a real discount, and the two day delivery means fewer expenditures on gas or long trips on the bus.

Financial services new entrant LendUp recently raised $200M to support their work making loans to underbanked consumers. They position their offer in contrast to payday loans, which have been an ugly necessity for many underbanked families, despite the exorbitant fees.

How can small business owners reach underserved markets?

Opportunities exist for small business owners as well. Entrepreneurs who can reach this unique and underserved group have an opportunity to win a loyal and potentially profitable segment of the population.

Stores are often far away from lower income neighborhoods, requiring expensive gas, or worse—lugging stuff home on public transit. Many businesses don’t accept Electronic Benefit Transfer (EBT) cards, making it hard for people on public assistance to access goods and services. Plus, many of the best deals require major purchases in large quantities—think Costco-sized ketchup jugs or 20-pack rolls of toilet paper. Families living paycheck to paycheck can’t afford to pantry load.

Some companies are focusing on understanding the needs of these communities. Dollar stores, with their smaller footprints, commitment to carrying products with low price per item (not just bulk discounts) and their many locations in low income neighborhoods have been thriving and expanding.

If you’re a small business wanting to serve lower income consumers, you need to join the membership economy, in which organizations put building a long-term relationship with their customers at the forefront.

Here are the steps to building a forever transaction, in which your customers become members and  demonstrate long-term loyalty, in exchange for your long-term focus on their well-being.

1. Start by understanding which needs aren’t well met in your target segment

Start small and specific —instead of “low income consumers,” how about “low income parents of toddlers living in urban centers.”  If you can delight a few hundred people, or even a few dozen, by providing them with something they’ve longed for, you are well on your way to a successful new business. From there, you can extend your offering as you saturate each market.

There are many industries in which low income consumers are underserved today, most of which are due to lack of access to transportation and to financial services, such as credit cards, bank accounts, and loans. Amazon Prime’s $5.99/month offering for EBT cardholders overcame both of these limitations. Uber and other ride sharing services provide affordable transportation to people who may not be able to afford their own car. There is plenty of room in various industries, such as in grocery delivery, health care, and after-school programming for kids, just to name a few.

• 2. Determine how you can solve the problem

From here, brainstorm ways to serve them—and focus on everything you could do to solve the problem entirely and forever for the customer. The key is to think outside the proverbial box about what it is customers really want and need in their lives, rather than looking for short-term solutions through the lens of what you currently sell.

For example, if you own a dry cleaner, think beyond “a better cleaning process” to “having clean clothes in my closet” which is a bigger, longer term goal. While some people want to own a car, most people just want reliable, convenient transportation whenever they need it, preferably without the hassles of maintenance and financing.

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What is the big goal of your business? What kind of “forever promise” can you make to the people you serve?

• Keeping people healthy (doctor, clinic, gym)?
• Ensuring that they’re up-to-date about local events (newspaper)?
• Spirituality and community (church, temple, mosque)?

When you take a step back and think about how your services and products fit into your customer’s lives, you’ll identify new combinations of services that can be uniquely packaged.

Consider some of the emerging technologies that might allow you to deliver in a differently. For example, can you create a regular delivery or service schedule and give your members the ability to adjust their routines? Or you could provide online support in addition to telephone, or mobile access for on the go.

You can always scale your offering back from this ideal vision, but it’s helpful to think big.

Brian Chesky, the founder of AirBnb, talks about providing an “11 star” experience—meaning, way more than a 5-star experience.

For example, he says:

“I’d get off the plane and there’d be 5,000 high school kids cheering my name with cars welcoming me to the country. I’d get to the front yard of your house and there’d be a press conference for me, and it would be just a mindf**k experience.”

• 3. Scale back to your minimum viable product (MVP)

What can you do today that would delight the people you want to serve? Maybe you can’t provide your customers with a cheering mob, but you can think of something pretty special and different.

For example, if your 11-star experience is providing home delivery of organic food at a low price to everyone, maybe you start with home delivery of a weekly meal each Tuesday to a single community. Once you have a small sign of success, you can expand—maybe to more markets, or by offering more services, or by lowering the pricing. You’ve got to start somewhere, right?

As you try new approaches, before you invest in systematizing and scaling the processes of each idea, test them in a less efficient way. For example, before you hire a team of delivery drivers, maybe the project team can do  deliveries, until the model is proven and refined.

Determine what you can provide your target group that gets as close to an 11-star experience as possible. Test it with a small group. Solicit feedback from the group and iterate. When you’re small, you can be nimble and adjust services, packaging and pricing as you go. If you’d like to learn how to do this, Bplans’ article on testing demand validation is a good next step.

• 4. Continue refining your offering

Keep tinkering with your offering and your target buyer until you have a perfect match, what is known as “product-market fit.”  Only after you know your customers love it and have gone from being consumers evaluating other options, to “members” who are totally committed to you, do you start investing in building awareness about your offering.

This process is true, by the way, of any underserved segment, not just low-income consumers. Small businesses have an advantage in that you probably actually know your best customers already, so you have unique access to their needs and challenges. You can do this process without fancy databases and technology because you truly understand your market, and also because you don’t need to scale to serve millions in order to have a successful business.

So start by thinking really small and really focused. Help a small group with a deep problem—especially one that has been ignored. Focus on making the problem go away and don’t limit yourself to “how it’s always been done.”  If you look to markets that are too small or too challenging for large companies to really focus on, you might find build the kind of loyalty that lasts forever.

Clarify your ideas and understand how to start your business with LivePlan

Robbie Kellman Baxter is the author of "The Membership Economy: Find Your Superusers, Master the Forever Transaction, and Build Recurring Revenue." She is the founder of Peninsula Strategies LLC, a consulting firm based in Menlo Park, CA, that helps companies excel in the membership economy.

Table of Contents

• How can small business owners reach underserved markets?
• 1. Start by understanding which needs aren’t well met in your target segment

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Money blog: Big rise in passport costs from tomorrow

Application fees for new passports are rising tomorrow by about 7% - so get in quick if you need to renew yours. Read this and the rest of today's consumer and personal finance news in the Money blog, and leave a comment or home gym hack in the form below.

Wednesday 10 April 2024 13:57, UK

• Britons can now 'work from home' in Italy for a year
• Big rise in passport costs from tomorrow
• Cheap Eats : Great British Menu legend shares ultimate toastie recipe
• Could I build a home gym for less than my gym membership?
• Masterchef judge to close restaurant
• Santander offering free railcard to new young customers
• Basically...  Tax codes

Ask a question or make a comment

Application fees for new passports are rising tomorrow by about 7% - so get in quick if you need to renew yours. 

It's the second year in a row that passport application prices have increased, following a 9% rise in February 2023. 

Here is a breakdown of the price increases... 

Adult - £88.50 , up from £82.50

Child - £57.50 , up from £53.50

Paper form 

Adult - £100 , up from £93

Child - £69 , up from £64

Fast track (one-week service) 

Adult - £166.50 , up from £155

Child - £135.50 , up from £126

Premium (same-day service) 

Adult - £207.50 , up from £193.50. 

It could be worth renewing now if you have less than 10 months left on your current passport. 

Some countries - such as Turkey, Thailand, Egypt and Singapore - require you to have at least six months' validity on your passport. 

If you're travelling within the EU, your passport...

• Must have been issued less than 10 years before the day you enter the EU/Schengen Zone 
• Must be valid for at least three months after the day you plan to leave.

The cheapest way to renew is through the gov.uk website, and you can expect to get your passport within three weeks for standard applications. 

Italy is allowing Britons who can work remotely to apply for a year-long "digital nomad" visa.

The scheme opened for applications for non-EU citizens at the end of last week - having been talked about for years.

Anyone wanting to take advantage needs to meet a few criteria, according to Italian law Studio Legale Metta - including:

• A university or college degree (minimum three years) from an accredited institution, an accredited professional licence, or accredited superior professional experience.
• At least six months in the industry in which they intend to work remotely.
• A work contract and a salary of at least €28,000 (£24,000).
• No specific immigration crimes within the past five years. 
• Evidence of a place to stay in Italy. 
• Health insurance. A private medical insurance usually costs between €350-700 a year.

The firm advises applying four to five months in advance.

Italy is trying to encourage growth amid an aging population.

A charity boss providing free haircuts for the homeless says it is helping people on the streets feel less "invisible".

Haircuts4Homeless, founded by Stewart Roberts, has 80 centres across the UK and has delivered 60,000 haircuts over the past decade.

Mr Roberts told Sky News' Breakfast with Kay Burley that some people have had "no communication with anyone" before getting their hair cut.

"Sometimes it's a quiet one, sometimes they just open up and... they tell you their stories," he said.

He said the situations charity staff hear of can be "really sad", but they also manage to have "amazing laughs" during the sessions.

Mr Roberts said he celebrated 18 years of sobriety yesterday and has struggled with drug problems in the past.

"I really relate to people and the struggles that they have," he said, though he noted it was a "misconception" that everyone on the streets was an alcoholic or a drug addict.

"But often it's the case that they will turn to that and you can't really blame them when they're in such bad positions," he said.

Asked how people can help, Mr Roberts said the charity is always looking for volunteers and sponsors as it "doesn't run itself".

"The main thing is, we're trying to humanise the face of homelessness. It's making sure that you spread our message out," he added.

The popular comedian has lamented increasing prices for performers wanting to take part in Edinburgh Festival Fringe. 

Manford said prices, especially for accommodation, were an "absolute joke" and were fuelled by "pure greed". 

"I've just priced up a week up there and even if every show sells out, I'm still operating at a loss," he wrote on social media site X. 

The comedian said this was less of a problem for him "as it's part of a much bigger tour" and because of the "stage of my career" but he feared it would shut out new performers. 

"No idea how anyone starting out is managing to get up there and showcase their talents!" he said. 

Manford said if prices stay high then "the only people who can do it are people with money or backing". 

A quick search on Booking.com puts the price of the hotel for the duration of the festival at about £4,000 upwards (looking at places with three stars or above) - although many are charging much more. 

One of five Bulgarian nationals who falsely claimed £50m in Universal Credit filmed themselves throwing a stack of £20 notes in the air.

The criminal threw the notes one by one and waited for an unknown woman to pick them up.

Stacks of cash tied with rubber bands were also shown in a separate video.

The benefit fraud gang made thousands of false claims for Universal Credit using either real people or hijacked identities and backed them up with an array of forged documents, including counterfeit payslips and fake GP letters in the largest prosecution of its type in English legal history.

Read the full story here ...

By Sarah Taaffe-Maguire , business reporter

Oil prices are sticking around $90 a barrel, slightly below the $91 cost of Monday but still higher than the six months since October. The latest high comes as a Ukrainian drone strike targeted Russia's third-largest refinery.

After nearly four months of falls, grocery business Ocado is the best performer of the morning.

Its share price is up 4.83%, the biggest increase among the 100 most valuable companies on the London Stock Exchange that make up the FTSE (Financial Times Stock Exchange) 100 index.

War in Ukraine and instability in the Middle East had been great news for arms makers. But there's a sense that the valuation of those companies may not be able to continue to rise as aerospace and defence company Rolls-Royce was the biggest loser of the FTSE 100 on Wednesday morning. Its share price fell 1.09%.

One pound buys €1.1675 and $1.2683.

By Ollie Cooper, Money team

Gym memberships can be steep. 

Industry giant PureGym told Sky News the average cost of its London gyms was around £32.32 per month. Outside of London it's around £23.30. 

If you're training in the capital, five years of membership will set you back nearly £2,000. 

So, in the long run, could you do it for less at home?

We enlisted Lee Mitchell, head personal trainer at Jogger.co.uk, to see if he could create a home gym for under £1,939.20 - the price of five years' membership at a London PureGym. 

We set him some criteria: we'd need a good range of equipment, including benches, dumbbells, cable machines and cardio machines - and at least some of it had to be brand new.

"A home gym setup can represent serious value over time, considering everything from commuting costs to the convenience of having your workout space readily available in the comfort of your own home," said Lee. 

But could he deliver on the challenge set?

What he bought

At the top of Lee's shopping list was a multi-purpose power rack that could double as a squat rack and smith machine.

"This equipment, although a larger investment, covers fundamental exercises for individuals at all fitness levels, making it integral to any home gym," he said. 

After a quick search, he found exactly what he was looking for in good condition on Facebook Marketplace. 

This cost him £250 - a good start, as this usually retails for around £2,000.

Next, Lee found a cable machine (£359.10 with new customer discount at Gym Master), a Spin bike (£219 at Fitness Superstore), a weight bench (£41.99 at Amazon) and a vertical leg press (£429 at Fitness Superstore) all brand new and well within budget.

"Certain items genuinely benefit from being sourced brand new, such as the cable machine (to prevent fraying cables for safety) and the vertical leg press (to ensure it's in proper working order, especially given the potential risks of a faulty machine)," Lee said. 

So far, we've got five items for £1,200.09. 

Lee picked up half of his total equipment brand new, but it was back to Facebook Marketplace for the rest. 

Having adjustable dumbbells maximises space (crucial for a home gym), and Lee was able to find a great set of two for just £200. They allow you to move from as little as 5kg all the way to 40kg. 

The current owner claimed to have spent around £300 when they bought them and insisted their condition was "like new".  

Next came an Olympic barbell and 100kg worth of weighted plates to go with it. 

Lee found exactly what he was looking for at a cost of £240. 

We're just a lifting platform away from completion now - which swiftly came in at £200. 

"In total, I spent just over an hour finalising my list of equipment, sourcing from various places including Facebook Marketplace, Amazon, Fitness Superstore and Gym Master," Lee said. 

He opted for a 50/50 split between brand-new items and second-hand products, "partially to prove that this is not all about bargain hunting pre-loved items".

What about space?

The obvious argument here is that it would take a significant amount of space to put all this (in some cases) shiny equipment. 

But Lee made his choices with that in mind. 

"I factored in that the average UK garage is typically 3x6m, a common size for gym conversions. 

"All the equipment I chose fit perfectly into a 3x3m space, allowing for ample "spreading out" room within a larger space," he added. 

Impressively, Lee managed to source eight key pieces of equipment for £1939.09 - which leaves us 11p to spare.

Use the form above to tell us your home gym hacks. 

Santander is offering a free four-year railcard to new current account holders aged between 20 and 25.

Santander Railcard holders get a third off standard fares in England, Scotland and Wales, plus money off London Underground.

It also comes with deals on holidays, restaurants and attractions. 

Customers need to act quickly if they want one - it's only available until 30 April. 

Here's what you need to know:

It is only available to new customers aged between 20 and 25 who open either an Everyday, Santander Edge or Santander Edge Up current account. 

In order to get the offer, you need to have paid in at least £500 to your Santander account by 14 May 2024. 

If you meet the eligibility requirements, the bank will send you a code to claim your railcard by the 31 July 2024. 

You'll also get an email to tell you it's arrived, and you'll find your code in the statements and documents section of your mobile app. 

Then just follow the instructions that come with it to claim your card. 

The bank has warned the number of railcards available is limited, so the offer could be withdrawn.

Every Wednesday we get Michelin chefs, top bloggers or critics to pick their favourite cheap eats around where they live and at home. 

This week, we're delighted to have Great British Menu queen Lisa Goodwin-Allen, executive chef of the Michelin-starred Northcote restaurant in Lancashire.

Hi Lisa, can you tell us your favourite places in Lancashire where you can get a meal for two for less than £40?

I love Jungle on the high street in Clitheroe. I go there a lot for brunch with my husband and my son. It's great value for money and just has a really cool, relaxed atmosphere, and they serve really tasty food. 

They have things like sweetcorn fritters with chilli jam and shakshuka with a falafel scotch egg on the menu.

The dishes always have a twist to them. It also feels great to be able to give back to the brilliant independents on the local high street.

What's your go-to cheap eat for a night at home?

A cheese toastie with tomato relish...

Tomato relish ingredients:

• 25g onion, finely sliced
• 1 garlic clove, grated
• 250g good quality, soft, ripe plum tomatoes, chopped
• 20g olive oil
• 10g tomato puree
• 50g tomato juice
• 1/4 tsp red chilli, finely diced
• 1 tsp lime juice
• Good pinch of salt and sugar
• In a medium sized pan, heat the olive oil and add the finely sliced onion
• Season with salt and cover the pan with cling film or a lid
• Cook the onion down until it is completely soft but with no colour
• Once soft, remove the lid and continue to cook on a medium heat until the onion is nicely caramelised
• Add chopped tomatoes, tomato puree, tomato juice, garlic and chili.

Ingredients for the cheese toastie:

• 125g semi-skimmed milk
• 15g egg yolk
• 12g cornflour
• 50g cheddar (grated)
• 5g Tunworth cheese (cut into to chunks)
• 4 slices of toastie bread
• 50g cheddar to garnish 
• In a small bowl whisk together the egg yolk and cornflour
• Pour the milk into a medium pan, bring to the boil, and once boiling pour on to the egg mix, mix well then pour back into the pan
• Cook on a medium heat, stirring continuously until the mixture thickens
• Once thickened whisk in the grated cheese and Tunworth
• Spoon the mix in semi spear molds (3cm) and freeze. If you don't have spear moulds, you can use an ice cube tray and fill half way up
• Take one slice of bread and brush with melted butter on one side, place the buttered side of bread on to the toastie maker, place two domes of frozen cheese on to the bread in each triangle then place a slice of bread on top, brush with more melted butter, close the lid
• Cook for 3-4 minutes until golden brown.
• Remove then put a good spoon of tomato compote on top, cover with more grated black cow cheddar and finish with a drizzle of olive oil and a touch of salt.

Read all our Cheap Eats recommendations around the UK here ...

The restaurant run by MasterChef judge Monica Galetti and her husband David is closing its doors after seven years of business. 

Mere in Fitzrovia, London, will hold its last service on 16 April, according to a statement on its website. 

"It is with heavy hearts that we announce the closure of Mere restaurant- but we feel this is the right time after seven years," it read. 

"We want to take this opportunity to wholeheartedly thank Alastair Storey (owner of catering company WSH, which backed the restaurant) and everyone who has supported us and our loyal patrons and dedicated staff throughout this journey.

"To our customers we thank you for your loyal and joyous visits. We hope to raise one last glass together before we close." 

While it did not hold a Michelin star, the eatery had been recommended in this year's Michelin Guide for its South Pacific Island inspired dishes. 

The owners haven't given a reason for the closure, but it comes as the hospitality sector continues to struggle with rising running costs. 

A survey by UKHospitality, the British Beer and Pub Association, British Institute of Innkeeping and Hospitality Ulster recently found that a quarter of operators had no cash reserves left after years of economic challenges.

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