Target market analysis: Why it matters and how to perform it
No business can be all things to all people. Luckily, your business doesn’t have to be. You can focus your marketing and sales efforts on a specific target market—the group of consumers you want to have using your product the most.
To identify your ideal group of consumers and understand them fully, you’ll need to perform target market analysis. We’ll show you how, using surveys, but first, let’s review why this type of analysis is essential in the first place.
Benefits of target market analysis
Target market analysis determines where, and how, your product fits into the real-life market. With this information, you can:
- Determine which markets are most and least valuable to your business
- Develop accurate buyer personas
- Find gaps in the markets where your products might fit
- Evaluate the viability of a new product
- Find exciting new markets to explore
- Build a tighter, more specific business strategy
Let’s explore these benefits using a real-world example. Say you’re starting a pie business. Performing target market analysis can help you choose the best location for your bakery, land on the optimal price point for your pies, design appealing advertisements, and place them where the right people will see them.
Designing a target market analysis survey
A survey that includes the right questions in the right order can make all the difference in effectively conducting target market analysis.
Start your survey with consumer behavior questions that ask about their habits, their attitudes, their brand awareness, and their brand loyalties. The questions can be specific to your product or they can be general inquiries about where, when, and how the respondent shops.
Keep in mind that you can use your first consumer behavior question to disqualify respondents from taking your survey (if their answer makes it clear that they aren’t the right fit). For example, if we ask “how often do you purchase pie from a grocery store, bakery, or restaurant?” and the respondent says that they don’t purchase pie, we can disqualify them from taking the rest of our survey.
We call disqualifying questions “screening questions.” To learn more about using them in your surveys, check out our guide.
Once you’ve finished asking consumer behavior questions, ask for more basic background information: age, gender, location, family, income, etc. These demographic questions are the building blocks of your buyer personas.
Want to see how these survey design tips work in action? Check out our target market demographics survey template, which you can edit to fit the specifics of your target market analysis.
Tips for surveying the right people
Now it’s time to identify your target market by putting your survey in front of as many types of potential customers as you can.
To reach the best audience for your target market analysis, follow these steps:
- Narrow your pool of potential respondents. Sometimes, you already know who your buyers are or aren’t. For example, it’s pretty difficult to sell pies to someone two states away. Before you begin your target market analysis, you might need to limit your respondents by location or by some other demographic categories.
- Calculate your necessary sample size. If you want statistically significant results from your target market analysis, a significant number of people need to complete your survey. To find out just how many, use our sample size calculator.
- Put your survey in front of the right people. An unbiased audience gives you the most useful survey results and the most accurate target market(s). To reach unbiased respondents, use a 3rd-party survey panel, like SurveyMonkey Audience. Our tool can collect responses from individuals who match your target audience criteria—within days.
How to analyze your survey’s results
The survey results are in. Now what? To identify and understand your target market, use filters and Compare Rules.
- Filter your survey data to uncover your buyer persona and that of your competitors. Say you filter by the question, “which of these bakeries have the best pie?” and you select respondents who chose your business. You can then look at the rest of their responses to better understand who your persona is, how they behave, what they care about, etc. In addition, you can filter by respondents who selected a competitor and perform the same analysis to better understand their buyer persona.
- A compare rule helps you tease out the differences between different buyer personas. Say you want to know where people who eat pie more than once a week purchase that pie versus people who eat pie less than once a month. Add a compare rule to the responses you want to compare (“more than once a week” and “less than once a month”). The compare rule will show you, side by side, how these heavy and light pie eaters answered your other questions, including those about where they eat pie.
Target market analysis requires thoughtful survey design, an unbiased audience, and careful analysis of the results using filters and Compare Rules. If you can do each of these things well, you’ll understand your target market, and ultimately succeed in developing your product, positioning it, selling it to consumers, and more.
Ready to get started? Build your target market analysis survey today.
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