Why is target marketing important?

My last four posts dealt with reasons why small business owners don’t use target marketing. You can link to the first of these posts below. Then each links to the next.

Why Some Small Business Owners Don’t Use Target Marketing

This post covers the importance of target marketing to successfully market your small business.

To answer the question “Why is target marketing important” first requires answering three other questions:

• What Is A Target Market?
• Why Is Target Marketing Important To Market Segmentation?
• Why Is Target Marketing Important For Conserving Resources?

What Is A Target Market?

A target market represents the people most likely to buy what you sell.

These people have something in common that solidifies their desire for your product or service. And that something distinguishes them from the market at large.

For example, the market at large includes people of all ages, all income levels, all education levels, all types of occupations, all social classes and all lifestyles.

But you can’t market to all these people at once. They are just too different.
So you have to pick a specific group of people from the market at large and market specifically to them.

Your best potential customers will be in only one age group, one income level, one education level, one occupation type, one social class and one lifestyle. By identifying the characteristics that best represent people who desire what you sell, you can market specifically to them.

So one answer to “Why is target marketing important?” is that it enables you to concentrate on people most likely to buy what your business sells.

Why Is Target Marketing Important To Market Segmentation?

Market segmentation is the process of distinguishing your target market from the market as a whole. It’s the actual research process that makes target marketing possible. Market segmentation is what marketing experts call this research process.

There are many ways to conduct market segmentation research, but the most common involves first determining the target market’s demographic characteristics. This in turn reveals many psychographic and behavioral characteristics. Using age to reveal generation and life stage is just one example.

Why Is Target Marketing Important For Conserving Resources?

Target marketing conserves your small business resources for marketing to the people most likely to buy what your business sells.

In this day and time, you can’t afford to waste any resources. You need to get as much return from your marketing investments as possible.

So having a target market is vital. It enables you to sell more products and services with fewer marketing resources.

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Why Is Target Marketing Important?

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Posted 11-5-08: Why Is Target Marketing Important?

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This is the third post on four reasons why small business owners don’t use target marketing. You can access the first two posts in this series by clicking the links below:

This post covers the third reason:

They don’t know how to conduct target market research themselves.

By the time you determine your customers demographic characteristics, you may think that you’ve done enough research on your target market. But not so.

Demographics like age, gender, income, and education level provide only a starting place in your target market research. Alone it wont’ help your marketing all that much.

To really benefit form target market research, you have to take it a step further and discover the personality and behavioral characteristics that go with the demographics.

Let me give you an example using age. Age reveals your target market’s generation and life stage. Both tell you much about what concerns them, what they value, what media reaches them and what kind of messages best speak to them.

So after you know age, you need to know what generation and life stage represent that age. Then you need to learn the personality and behavioral characteristics that go with that generation and life stage. But you need to know these characteristics not just for age, but for every other demographic.

Once you know all these characteristics, you can just do the kind of research that you did for a high school term paper. Sticking to our age example, you’d search for information about your target market’s generation and lifestyle. Let’s say, you realize that your target age group is in Generation X and the early adulthood life stage.

So you go to your local library or do a Google search for these terms. Copy what you find. Read and highlight it. Organize it, and eventually develop a profile for Generation X and the early adulthood life stage.

Now you need to repeat this process for every other demographic and related characteristic. So it can be a pretty time consuming process. And until now the only way to get your target market information without spending lots of time on research was to hire a marketing agency to do it for you. That’s the topic of the final post in this series.

Conducting target market research is easy when you use my automatic target market research program. Just complete the form below for your free trial:

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The Marketing Research Process - Time Consuming, Expensive?

Posted 10-31-08: How To Conduct Target Market Research

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Predicting characteristics of your potential customers isn’t easy. And some small business owners don’t select a target market primarily because they don’t know how to pick characteristics that define the target market.

So not knowing how to predict characteristics of your potential customers is a second major reason that small business owners don’t use target marketing.

Knowing that only one group of people comprise your target market still leaves you short of knowing what characteristics your potential customers share. It takes research to learn their characteristics.

Determining Characteristics Of Your Present Customers

If you already have a good customer base that research is easier than if you’re just starting out and don’t have many customers yet. That’s because it’s relatively easy to get your present customers to give you information. They have a relationship with you. They likely trust you, and they want you to provide them with their ideal product and services.

So they are motivated to give you information that you can use to give them back what they want. They will likely take a short survey, provide demographics and contact information to enter a contest, or give you on-the-spot feedback when they purchase from you.

But if you’re just starting out and haven’t already determined a target market, it’s much more difficult to determine shared characteristics for your best potential customers. But until you know what your potential customers have in common and how they are different from everybody else in the market, you’ll never do an effective job of marketing.

Determining Characteristics Of Your Potential Customers

One way to gather shared characteristics is to visualize the kind of person whom you think will likely buy your product. How old is this person? Is the person a man or woman? How much education does this person have? You just continue asking yourself these kinds of questions and recording the answers until you’ve got a good list of target market characteristics.

Then you seek out people with those characteristics and determine if they really are potential customers. If some are, but some aren’t, what characteristic makes them different from one another? Through this cyclical process of visualization and verification, you will discover your potential customers’ demographic characteristics.

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How To Conduct Target Market Research

Posted 10-29-08: Predicting Characteristics Of Your Potential Customers

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Why do some small business owners don’t use target marketing?.

The answer differs for each business owner. But most of the reasons fall into four main categories:

1. They really believe they can market to everybody - that everybody wants what they sell.
2. They don’t know how to predict characteristics of their potential customers in order to separate the target market from the market at large.
3. They don’t know how to conduct target market research themselves, and
4. They can’t afford to hire a marketing agency to do it for them.

This post covers the first reason that some small business owners don’t use target marketing. The remaining three reasons will be covered in my next three posts.

Reason 1: Some Small Business Owners Really Believe They Can Market To Everybody - That Everybody Wants What They Sell.

The truth is there are no products or services that everybody is going to want badly enough to pay for it. Only people who really believe they will benefit from a product will exchange their money for it. How much money they’ll pay you for it depends on how much they desire the benefits that your product offers.

Some may be willing to pay for your product but not enough that you can make a profit. Others may be willing to pay considerably more in order to get special benefits that increase your costs. But will they pay enough for you to make a profit after adding those increased costs? Some aren’t going to buy your product at any cost. They just don’t want it, can’t see how it will benefit them, and probably wouldn’t use it if you gave it to them.

Now that’s a hard pill for some small business owners to swallow, but it’s reality. Only some people will be willing to buy a product at a price that enables you, the business owner, to make a profit. Those people are the ones that you need to target.

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Predicting Characteristics Of Your Potential Customers

Posted 10-27-08: Why Some Small Business Owners Don’t Use Target Marketing

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The target market types of regulators, potential customers and present customers are defined with examples in this post.

My last post covered financiers, supporters, and influentials. If you missed that post, you can access it below:

Six Target Market Types: 1-3

Target Market Types: Regulators

Many small businesses are regulated by a government agency. And all business owners have to pay taxes of various kinds. So government officials who often determine how regulations are implemented and how taxes are collected become important target market types for small business owners.

For example, I recently got a penalty notice for a late withholding tax. Neither I nor my accountant can remember making any late payments. So I called and talked to a representative at the Arkansas withholding office, wrote a letter explaining the situation, and had the penalty forgiven because my accountant has maintained a positive relationship with them.

So although regulators don’t generally buy a small business’ products, they can affect profit through penalties. Thus, they are a target market type.

Target Market Types: Potential Customers

Potential customers are what are most often considered target markets by professional marketers. They are the people that the business targets with its marketing messages and activities. So potential customers comprise an important target market type.

It’s important to learn all you can about your potential customers so that your marketing messages, tactics and strategies work effectively with them. One way to learn about potential customers is market segmentation.

I offer an e-book and an automatic program that provide you the best appeals for your potential customers. You can get more information about my e-book at the page linked below:

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Target Market Types: Present Customers

But present customers are even more important to you business’ success. Because they have bought from your business before, they are likely to buy again. And it costs less to reach present customers than potential customers with your marketing messages.

So present customers comprise another important target market type.

Target Market Types: Conclusion

It’s important to know demographic, psychographic and behavioral characteristics of all target market types in order to most effectively reach your business goals.

Each type requires creating a special campaign, with different strategies and tactics that are appropriate and effective with the people in the target market type.

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Posted 10-13-08: Six Target Market Types: 4-6

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