How to Write a Target Market Analysis: 13 Steps (with Pictures)

2024 Author: Jason Gerald | [email protected]. Last modified: 2024-01-19 22:11

Writing a strong target market analysis can help you use your marketing funds more effectively. By analyzing your audience, you identify the most important characteristics and use that information to promote your product or service directly to your target market. A strong target market analysis should help you and your company connect with the people with the greatest potential for using your product. It also increases the sales visibility of your product or service.

Step

Part 1 of 3: Collecting Data for Target Market Analysis

Step 1. Identify your target market

First of all, you have to determine who the company's product or service wants to offer. It's great if the whole world wants your product or service, but it's certainly not realistic. For example, if you manufacture auto parts, your target market is people who own or handle cars. However, if you are a musician who specializes in children's music, your target market will be parents with young children, or even the children themselves.

Identifying your target market will help you determine how to advertise and maximize the value of your marketing resources

Step 2. Use a variety of resources

There are many resources on the internet that are trusted because they come from various government sources. In the US some reliable sources include:

• U. S. Census Bureau, www.census.gov

• Step 3. Study the target market demographically

  Identifying your target market helps you focus your marketing resources and increase your overall profit. The purpose of identification is not to exclude anyone, but to identify a market that has a high potential to become a customer. Demographic characteristics consist of age, gender, marital status, family size, income, education level, race, and religion.

  • Demographic information can usually be found on the internet in the form of compilations of reports from the central government. You can try to find data in the Central Statistics Agency database at
  • If you market your products or services to other businesses, the demographic information also includes the location of the related business, number of branches owned, annual income, number of employees, industry, and how long the business unit has been in operation. You can usually collect this data from the company's publicly published annual financial statements. Try visiting the website of the related company, the website of the Indonesia Stock Exchange, or contacting the company directly to obtain the related business financial report.

  

  Step 4. Outline your target market psychographics

  Psychographic information describes the behavior, beliefs, emotions, and values of your audience. Usually this information answers the question “why?” Why would someone buy something? Why would someone return to a certain store? Psychographic research consists of family stage, hobbies and interests, type of entertainment involved, and lifestyle of your target market.

  • Psychographic information is often found in surveys or focus groups. While you can look it up yourself, it's a good idea to hire a marketing research company to help structure the survey, choose the words for the questions carefully, and engage with focus groups in an effective way.
  • For businesses, psychographic information can include values or mottos, how the company looks to customers, and how formal/informal the work environment is. You can gather some of this information from self-observation when visiting a store, or by reading reviews of related business sites. You can also review the annual financial statements through the IDX website.

  

  Step 5. Understand the target market behaviorally

  Behavioral information will help you understand why someone chooses one product or service over another. This information also consists of how often the target market buys, the amount and how to buy the product or service, whether the use of the product or service is related to a particular event, and how long the customer decides to buy the product. By leveraging the resources on the internet, behavioral marketing can be a powerful tool by targeting individual prospects.

  • Determine how important brand or company loyalty is to the target market.
  • Find out if your audience prefers convenience, affordability, or quality.
  • Use market surveys to find out how your target market usually pays for your product or service.
  • Ask if the customer has more interface interaction or online shopping.
  • For this type of data, you may need to do your own research or use the services of a research company.

  Part 2 of 3: Formatting the Target Market Report

  

  Step 1. Start with a blank title page

  You may write this report for your own use, or use it in the future as a marketing tool and build interest from other companies in your company. It's a good idea to start with a catchy title. We recommend using a bold, but informative title. Readers will immediately recognize the topic of analysis from your report.

  For example, a good title would be Target Market Analysis on Customers of Apple Communications Products.”

  

  Step 2. Include a brief introduction

  The introduction will explain the overall purpose of the analysis to the reader to prepare the target market analysis. If the analysis is going to be part of a larger business plan, the purpose of the analysis should be clear. However, if you're creating a market report for a specific purpose, it's best to describe it here.

  For example, you might start with, “This target market analysis report was prepared to review whether Acme Company needs to revise its marketing and focus on a younger target audience.”

  

  Step 3. Write down the analysis in a few short paragraphs

  You can keep the reader's attention and focus by writing short paragraphs. The section headings at the beginning of each paragraph will help readers understand your analysis quickly, much like reading the outline of a report. Each target market analysis is always different. Some analyzes consist of only a few sheets, while others are more complex and can be 15-20 pages long. In general, you should include the following sections:

  • Introduction. This section identifies your industry in general and defines your target market.
  • Description of your target market, including size and description of common characteristics.
  • An overview of the market research used to draft your analysis.
  • Market trend analysis and all forecast shifts in target market spending habits.
  • Estimated risk and anticipated competition.
  • Projections and predictions for future growth or shifts in the market.

  

  Step 4. Provide sources of information in the body of the analysis

  You must document all data or research used. Readers may want to verify statements or conclusions in your report. Provide reference citations to assist readers in reviewing your analysis. It's a good idea to include it in the body of the text instead of in a footnote at the bottom of the page.

  

  Step 5. Use graphs, charts, or other visual presentation aids

  There is a saying that “one picture is worth more than a thousand words”, and that sentence is very true in market analysis. If you collect data and present it in the form of an attractive chart or graph, you can often even make a point with great empathy. For example, a pie chart can immediately show the difference between 75% of the market and 25% of the market clearly versus just numbers and words.

  Part 3 of 3: Reviewing and Using Analysis

  

  Step 1. Create a projection, not just a summary

  The real value in target market analysis is not simply explaining the current state of the market, but predicting or projecting the future. You should consider how certain changes in the market may affect your business. That way, you can prepare yourself and be on the lookout for those changes to actually occur. Ask the following questions as part of your analysis:

  • How many customers will return?
  • How does the age of the target market affect interest in your product or service?
  • How do economic changes within the community affect the target market?
  • How affected is your target market by changes in government, regulation, and so on?

  

  Step 2. Prepare your analysis report for others to read

  Your target market analysis may be presented separately or included as part of a larger company business plan. Look at existing reports or business plans so you understand the format the company wants. If there is a specific font that must be used, adjust it to maintain consistency in the internal appearance of the report.

  If you're giving market analysis to someone higher up in the company, it's likely that you'll need to make recommendations as well. Based on the analysis, what steps need to be taken by the company to move forward? Does the company need to increase or decrease advertising spending in certain areas? Does the new target market need to be expanded? Keep in mind that this analysis can be an important step in determining the future of your company

  

  Step 3. Follow up on your conclusions

  Your target market analysis will be useless if you and the company don't follow through. When completing a report, you need to know who should receive it in order for your report to come to fruition. You can pass it on to a marketing employee in the field, or you can hand it over to someone at your company. After some time, you will need to find out what changes were made to follow up on your research.