What is a target audience, which characteristics help to differentiate and what tips exist for the target audience analysis?
The recipients of the service, the users of the product
Whoever wants to offer a service or develop a product should be able to answer an important question: Who should use the service or who will use the product? The answer to this question helps the provider to develop a service or a product that offers advantages to potential customers while fulfilling their wishes and needs. These potential customers are the recipients of services, the users of products and the addressees of activities. In other words, they are the target audience.
A target audience is a group of people described by characteristics and addressed with defined activities, services or products.
Characteristics to determine the target audience
There are a number of features that organisations can use when defining target groups or market segmentation. These differ depending on the market. In a consumer market or in a B2C market these are typically
- demographic characteristics such as age, sex, marital status, place of residence, household type and household size.
- socio-economic characteristics such as educational attainment, occupation and disposable income.
- psychographic characteristics such as values, opinions, wishes, motivation and lifestyle.
In addition, there are also
- purchase and consumption-oriented characteristics such as price sensitivity, innovativeness, purchasing range or media usage.
If a company develops services and products for other companies, i.e. if it is active in the B2B market, other characteristics help to determine the target audience:
- organisational characteristics such as company size, location(s), type of company, industry, etc.
- economic characteristics such as turnover, profits, market share, liquidity, etc.
- purchasing behavior such as frequency, time period and timing of purchases, supplier loyalty, selection processes, partner programs, etc.
Furthermore there are also
- personal characteristics such as role, motivation, responsibility, budget, decision-making authority, etc.
Especially these personal characteristics should not be neglected in a B2B market, because organisations consist of people and people have – besides the mentioned characteristics in connection with a role – also values, opinions and wishes. And people are usually those who use services and products.
Example of a target audience description
“Department managers are our target audience” – when you hear such a statement, you should be wide awake. The role of a person in the hierarchy of an organisation is one characteristic, but only one among many. There are department managers who have 5 employees and others who have 1,000. There are department managers who are allowed to release amounts up to 5,000 Euro and others are responsible for several millions. A target group definition based on only one characteristic is therefore not enough.
Here you can find an example of a target audience description in the B2B market:
The target group consists of 45 – 65 year old department heads who are responsible for IT departments with a size of 100 – 300 employees.The company is based in Germany, the company language is German. The employees work remotely at different locations or in the home office. The company has been active in the automotive industry as a manufacturer or supplier for at least 10 years, its turnover is more than 10 million Euro per year. The department heads have a budget of more than 500,000 Euro for investments in the development or procurement of individual software. They have more than 10 years of management experience and value partners who work continuously on site, are available 365 days a year, are professionals in agile software development, and have industry experience and contacts to other manufacturers and suppliers. They are technically minded, have personal experience as software architects or developers, value quality more highly than price and image and prefer medium and long-term win-win situations.
Tips for target audience analysis
There are a number of challenges to be overcome when defining target audiences. Here you will find some hints and tips for target audience analysis:
- Finding access to information on groups of people is often difficult and time-consuming. So use every opportunity to talk to customers, potential users or partners to better understand their needs.
- Similar to a stakeholder analysis, it is advisable to deal with target groups in detail. Questioning techniques, observation techniques or creativity techniques can help with the definition.
- The definition of target audience is not a wishful thinking. It is not about defining “the ideal customer”, but about determining those persons for whom an organisation will become active.
- Groups of people are often inhomogeneous. Just because demographic and socio-economic or organisational and economic characteristics coincide, wishes, opinions and competences can differ.
- Even if each defined characteristic reduces the subset of people to be addressed in relation to the total, it is important to determine characteristics. The more precisely you know your target audience, the better you can address suitable services, products or activities.
- Target groups can be unstable over time, as characteristics change over time. For example, sales, market shares and budgets can shrink, or decision-making powers can be reduced.
In principle, it is advisable to continuously review the target group definition and to adjust it if necessary.
The target audience and marketing
It is often read that the definition of target audience would be the task of marketing in a company. This is true, but only if it is a holistic approach. If marketing is understood as the interface of a company to a market, then the determination of the needs of groups of people is the basis for the definition of target audiences as well as for the development of services and products, and the subsequent marketing. Consequently, the target group definition thus also becomes an element in product management, requirements engineering or project management.
If the target audience definition is merely a “subsequent” determination of groups of people to be addressed with suitable advertising, companies miss opportunities. This is reflected, for example, in definitions such as “The target audience defines a group of people that a company wants to reach with its marketing measures in order to sell products or services to them”.
Impulse to discuss:
Thinking in terms of target audiences no longer makes sense in highly individualised times.
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