In our last post, we talked about two important factors for your market analysis, the market size and the market conditions. Today we’re going to talk about demographics which will allow you to segment your market. After you segment your market, you will be better able to understand who your target customer will be and you will know more about the stability of your market.
Identify your region and the characteristics of the region to enhance your knowledge of the market. Narrow the area of your customers by identifying what country, state and city your target customer most likely resides in. If you are offering services to customers in a specific region, determine the size in population of the area. Need help? Use the census website to determine population of certain US regions. Be sure to break your findings down by county.
Using demographics such as age and gender will help you to understand WHO you are targeting and how. This section of your plan should contain answers to questions such as: What is the age range of your target customer? Under what income bracket does your target customer fall? What is the typical level of education of your target customer?
Psychographic and Behavioral Segmentation
Now you need to determine the beliefs and habits of your target customer. Describe their lifestyle. What are their interests and activities? What opinions and attitudes do they hold? Research done in this section will allow you to better understand your target market. This section should answer questions such as: Based on the age group of your target customer, what activities are they most likely to participate in? Based on their attitudes and opinions, what values do your target customers generally hold? How brand loyal are your target customers? How ready is your target customer to buy your product or service?
Answers to these questions will allow you better understand your customers (which is important) and will help you to determine who constitutes your target market. This will allow you to easily reach those customers.
Do the demographics of your target market support your plan?