Compiling Data for a Target Market Analysis
Identify your target market. The first step is to decide who you wish to target for your product or service. Certainly, it would be great if the entire world wanted what you have, but that is not realistic. For example, if you manufacture car parts, then your target market is going to be those people who own or work on cars. But if you are a musician specializing in children's music, then your target market will be parents of small children, or perhaps the children themselves. Identifying your target market will help you later decide how to advertise and maximize the value of your marketing resources. Write down clear statements of who is going to be using your product and how they're going to feel when they're using it to get a better sense of your target market.
Use a variety of available resources. Many sources are available online from a variety of reliable, government sources. In the United States, some of the most applicable sources for conducting your market research may be: U.S. Census Bureau, www.census.gov www.business.gov, contains links to state and national data about businesses Bureau of Labor Statistics, www.bls.gov U.S. Department of Commerce, www.commerce.gov
Study your target market demographically. By identifying your target market, you will be able to focus your marketing resources and increase your overall profits. The goal is not to exclude anyone, but rather to pinpoint your most likely customers. Demographic characteristics include age, gender, marital status, family size, income, education level, occupation, race, and religion. Demographic information can often be found online as a compilation of different reports from the federal government. Check the Census Bureau and Commerce Department websites. You can find a useful resource from the U.S. Census Bureau at https://www.census.gov/quickfacts/table/PST045215/00. If you are marketing to other businesses, demographic information includes where the business is located, how many branches they have, their annual revenue, number of employees, industry, and how long the business has been running. You can usually gather this data from annual reports, which are public record. Contact the secretary of state's office in your state and ask for corporations data.
Describe your target market psychographically. Psychographic information tells you about your audience's attitudes, beliefs, emotions, and values. It generally answers the question of “why?” Why do people buy what they do? Why do or don't they return to a particular store? Psychographic research includes your target market's family stage, hobbies and interests, type of entertainment they engage in, and lifestyle. Psychographic information is often found through surveys or focus groups. Though you can set these up yourself, it would be beneficial to hire a marketing research firm to help you structure the surveys, word questions carefully, and engage with focus groups in an effective way. For businesses, psychographic information can include the company's values or motto, how they wish to be seen by their own customers, and how formal or informal their work environment is. You can gather some of this information from your own observations if you visit their stores, or by reviewing their websites. You can also review the company's annual reports from the secretary of state's office.
Understand your target market behavioristically. Behavioristic information helps you understand why someone purchases one product or service over another. It includes how often your target market buys the product, how much or how many they buy, if there was a specific occasion for using it, and how long it took them to decide to buy that product. Using Internet sources, behavioristic marketing can be a powerful tool by individually targeting potential customers. Determine how important brand or company loyalty is to your target market. Find out if your audience most heavily values convenience, a good price, or quality. Discover how your target market usually pays for your product or service via market surveys. Ask if your customers prefer face-to-face interaction or an online store. For this sort of data, you may conduct your own research or hire a marketing research firm for assistance.
Formatting Your Target Market Report
Begin with a clear title page. You may be writing your market analysis for your own use, or you may wish to use it in the future as a marketing tool to generate interest in your company from others. You should begin with an attractive title page. Your title should be eye-catching but also informative. The reader should be able to tell right away what your analysis is about. For example, a strong title might be something like, “Target Market Analysis for Consumers of Apple Communication Products.”
Include a brief introduction. The introduction will explain to the reader your overall objective in preparing the target market analysis. If your analysis is to become part of a larger business plan, then this may be obvious. But if you are conducting the market report for a particular purpose, you should explain it here. For example, you may begin with, “This target market analysis report is being prepared to consider whether Acme Company should revise its marketing efforts and focus on a younger target audience.”
Write your analysis in several short paragraphs. Keeping the paragraphs short will help to keep your reader's attention and focus. Section headings at the beginning of each paragraph will help the reader form a quick, overall understanding of your analysis, like looking at an outline.Every target market analysis will differ. Some may be as brief as a few pages, while others, in more complicated fields, may be as long as 15 to 20 pages. In general, you should include most of the following sections: Introduction, identifying your general industry and defining your target market. Description of your target market, including its size and description of the general characteristics. Summary of your market research that went into drafting this analysis. Analysis of trends in the market and any anticipated shifts in your target's buying habits. Risks and competition that you anticipate. Projections and predictions for future growth or shifts in the market.
Provide source information in the body of your analysis. It is important to document any data or research that you used. The reader may want to verify your statements or conclusions. Providing the reference citations will assist the reader in reviewing your analysis. It is expected that the citations will be contained in the body of the work, rather than as footnotes at the end.
Use graphs, charts or other visual representations. It is often said that “a picture is worth a thousand words.” That holds true in market analysis. If you can compile your data into appealing charts or graphs, you can often make your point very emphatically. For example, a pie chart can instantly show someone the difference between 75% of the market and 25% of the market much more vividly than mere numbers and words.
Reviewing and Using your Analysis
Make projections, not just summaries. The real value in a target market analysis is not just in describing the current state of the market, but rather in predicting or projecting the future. You will want to consider how certain changes in the market or in your community may affect your business. By doing this, you can prepare and be ready in case those shifts actually occur. Address the following questions in this part of your analysis: How many customers will come back? How with the aging of your target market affect their interest in your service or product? How would economic changes in the community affect your target market? How would your target market be affected by governmental changes, new regulations, or so on?
Prepare your analysis report to share with others. Your target market analysis may stand on its own, or you may be including it as part of a larger business plan for your company. Review your company's prior reports or business plans, so you will understand the format that is expected. If a particular font is used, you should try to match it for internal consistency. If you are providing the market analysis for someone in higher administration in your company, you probably will be expected to provide recommendations. Based on your analysis, what steps would you recommend that the company take going forward? Should they increase or cut back on advertising in any particular area? Should new target markets be expanded? Bear in mind that your analysis could be an important step in the future of your company.
Follow through on your conclusions. Your target market analysis is meaningless unless you and your company follow through on it. When you complete your report, you will need to know who should receive it next, to take action. You may be involved in the actual marketing efforts, or you may hand that off to someone else in your company. After some time, you should follow through to find out what changes are being done to follow through on the research.
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