Some people say you should build a product that you would use yourself, making you the target market. I’ve also heard the flip side that you shouldn’t build products for yourself because you’re probably smarter than, or different from most people outside of either Silicon Valley, or wherever you’re at. In either case, knowing who your audience is should be on your list of top priorities. If you know who your customer is, it tends to be easier to build your product for them. It’s also one of the most fundamental things you can ask of yourself as a startup or small business owner.
In advertising (which can take on many forms), not understanding your audience can cost you a lot of money, which can be said of a lot of other things like product development. There are five categories that you can break an audience into, which makes a lot of this advertising and product development stuff easier:
- Household consumers
- Members of business organizations
- Members of a trade channel
- Professionals
- Government officials and employees
Household consumersMost of the mass marketing is targeted to this group. Typical companies that would advertise to these people include McDonald’s, Toyota, Levi Jeans, and Budweiser. There are about 109 million households in the United States and 292 million household consumers. Annual retail spending is approximately $5.5 trillion in the United States with advertising being huge in this market. An example audience definition might be “women, 25 to 40, living in metropolitan areas, with incomes exceeding $40,000 per year.”
Members of business organizationsMost people in this group create business and industrial goods/services, like office equipment, machinery, software, and supplies, and the typical approach to these groups is personal selling. Advertising is primarily used with this group to help promote awareness and a positive attitude towards buyers.
Members of a trade channel
This group consists of retailers, wholesalers, and distributors and are suitable target markets for producers of household and business goods/services. Most producers rely on this market to reach their target audience, for example, the Nintendo Wii would struggle to reach its market without the proper distribution trade channels. The method used most for communicating with this group is personal selling.
ProfessionalsThis includes doctors, lawyers, teachers, accountants, and others with specialized skills and certifications. The members of this group usually have specialized needs and interests, so marketing efforts should emphasize a product or business’ unique features that are designed specifically for a particular market. The main method of reaching this market is through trade journals, which are magazines specifically written for members of a trade and typically contain highly technical material.
Government officials and employeesThis deserves its own category since government spending makes up a significant dollar volume of purchasing on behalf of federal, state, and local governments. A large part of the demand in this category consists of office furniture, vehicles, construction materials, computers, fertilizers, and business services. The major method of reaching this market is through catalogs, direct mail, and web-based advertising.