AAQ: Finding target market...

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You are asking: “What formula do you use to find target market?”

There does not seem to be any one surefire method of identifying target markets. The most common means of determining target market seems to employ “segmentation”. This process involves breaking down all the market into a variety of gender, cultural, geographic, political, social, and economic groups.

Once you have defined the categories in each group (e.g., Race: Blacks, Whites, Hispanics, Asians, etc.; Income: $10,000-20,00/year earners, $20,001-30,000/year earners, etc.; Age: 18-25 year olds; 26-35 year olds, etc.; Sexes: Male, Female, Transgender, etc.) select which category or categories is arguably more inclined to purchase the product – or whom you would like to purchase the product. From the selected segmentations, you would cross reference them and develop a matrix that defines your target market.

It is important to understand that no one product will appeal to all consumers, so the matrix will be different for each product – the best example is the wide variety of vehicle styles and colours that are available. Gone are the days of Henry Ford’s Model T and his assertion that, “Any customer can have a car painted any colour he wants so long as it is black.”

For example (without displaying the full market segmentation), if you were selling $100,000 coupe roadsters you would probably target people:

• making in excess of $100,000/year (because if a person made less, that person might have other priorities)
• males (not to say to say that females would not, but males might be more inclined)
• North American or European markets (because of the well developed road infrastructure and economies in these places, you might not be as concerned about targeting tolower per capita GDP nations such as China or India – despite their high GDPs and populations)
• 25-55 years old (a large spread, because the young hipster with money might “feel the need for speed” and the affluent Baby Boomer might have the disposable income; younger people in school might have other priorities and seniors might not seek the “status” that some seek in owning such vehicles)
• singles or childless couples (families need not apply, these cars are built for two and a baby seat would not fit)
  

Another means might be examining available statistics and trends that currently exist in the market – from the existing data, you might be able to answer, “Who is buying similar products now?” Additionally, the employment of focus groups or polls could also be used in determining what a “target market” is.

There is a good deal more to know about developing a scheme that would help you determine what your target market is. To learn more about determining target markets, search the library’s catalogue (http://darius.uleth.ca/search~S2) and use the “Basic Search”. Input a term such as “marketing” or phrases such as “target marketing” or “market segmentation”, and you are bound to discover many titles that are relevant to your needs. You can also use our
business databases (http://www.mhc.ab.ca/library/databases/business.html) to discover journal and magazine articles about this subject.

Thank you again for using the “Ask A Question” service. If you need more help, please use the service again or see the Information Desk in the Medicine Hat College Library (phone #: (403) 529-3867; Toll Free: 1 (866) 282-8394 (Ext. 3867)).

AAQ #: 43013