With today’s intense competition in the marketplace, it’s essential now more than ever for businesses to identify and market to the right demographic and target group. These are the people who are most likely to buy a company’s products or services. Sometimes, companies’ products appeal to various segments of the population, which they will have to identify. Following is the best way to go about this endeavor.
Assess Current Customer Base
To start the process, a company should always start by doing a cross-section of its own customer base. This is easily done if the business keeps specific information, like its key customers’ gender and ages. The business owner should then look for common characteristics or interests among the customers and why they purchase their products from the company, according to Inc.
Define Common Demographics
A savvy company will keep records on numerous demographics of their customers, including ages, genders, household incomes, education levels, occupations, and even ethnicity. Once the business knows which demographic group or groups comprise the largest portion of the customer base, it’s wise to determine whether these customers are also the heaviest users of the company’s products and services.
Consider Psychographics
A company owner or marketer should also identify the key psychographic characteristics of its customers. Some common psychographic variables include attitude, values, lifestyles, hobbies, personality, and values. Knowing whether customers are retired, travel frequently, or have certain hobbies may also be relevant to the company’s marketing department.
Conduct Market Research Among Demographic Groups
Most companies prefer to conduct two types of research before rolling out a product or realigning their marketing and advertising efforts: qualitative and quantitative. Qualitative research can be observed but not measured and includes several common methods, including unstructured interviews, focus groups, and direct observation, according to Simply Psychology. When conducting qualitative research, a company would keep the sample sizes relatively small and conduct multiple sessions. It may also include some competitive buyers among the sample size. The key is to determine which demographic groups like the product and would likely purchase it.
With quantitative research, the company can better quantify the data and ensure that the overall results are reliable and projectible across the general population. Standard quantitative research methods include phone surveys, personal interviews, and internet research.
Test the Offering
If the product looks highly promising at this point, it’s best to test the concept with the target audience in several markets. The objective is to ascertain whether actual sales support what the research is saying.
Identifying the right demographic composition of customers or target audience is crucial to a company’s success. The more information a company has on its core target customers, the higher its chance for success.