How to Define Your Target Market

Here is any easy guide to help define your product or business’s target market.  If you’re visual, there’s pictures, or you can always read too:

Two Types of a Target Market

We have two basic types of a target market (especially for a product): B2B and B2C, business or consumers.  You need to figure this out before you can further break it down.  Don’t pass this part off quickly, because there is some variables that you should take into account with your pricing, market strategy, and product offering with different types of target markets.  Let’s start with B2B:

B2B Target Market for a Product

Ask some basic questions about your product to see if you target B2B: B2B products sell to business.  Easy right?  Yeah, of course.  But what else do we need to know?  Well, do you know what size of company you target?  Who in the company will purchase your product?  The ONE sentence is overlooked in defining your target market.  WHO is the decision maker you need to reach in the business.  The CIO?  CEO?  Maybe the VP of business development?  This also relates to how you communicate to that person.  If you need to reach a CEO target market to sell your technology product, they’re big pictured people, they don’t like hearing all the details.  They’ll be more concerned about the “big picture of how this will help their business”.  Let’s look at this graph of things you should know about your b2b target market:

target market b2b product

A B2B Target Market Needs Product Value & Profit

This is something alot of people in B2B don’t understand.  If you are creating a product, and you want to sell it, it needs to bring value to that business.  It isn’t consumers, purchasing decisions aren’t usually made without considering the benefit to the business.  So if you’re developing a B2B product then, you need to keep these things in mind:

  • Relationship driven
  • Maximize the value of the relationship
  • Small, focused target market
  • Multi-step buying process, longer sales cycle
  • Rational buying decision based on business value

B2C Target Market

Onto consumers!  The B2C target market is very different.  It needs to be much larger then B2B.  It really loves Facebook, and YouTube marketing content.  With a B2C target market, we don’t want to analyze them based on what company they work for, etc.  We want to analyze them differently then the B2B market.  Here, we’re more worried about their marital status, gender, and other demographics:

B2C Target Market Product

With the B2C target market, you should take these things into account when building your product or establishing services:

  • Product driven
  • Maximize the value of the transaction
  • Large target market
  • Single step buying process, shorter sales cycle
  • Brand identity created through repetition and imagery
  • Merchandising and point of purchase activities
  • Emotional buying decision based on status, desire, or price

Don’t stress if you don’t know who your target market is before you build your product (this is actually pretty common), but you should at least be aware of what type of market your product or service is attracting, and try to customize it more to fit that target market (product-market fit).

Target Market Analytics Tools

There are a variety of different analytic tools you can use to determine who is visiting your site (if the majority of your visitors are coming from the web): For B2B, make sure you use a B2B analytics tool, such as Bizo.  For B2C, Quantcast gives pretty good demographics.

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