Understand Your Market
"Who is your daddy, and what does he do?" - John Kimble, Kindergarten Cop
How you do this is through a process called a market analysis. A market analysis uses quantitative and qualitative assessments to understand the size and scope of a market, its economic environment, your target markets, and your competition. You will use this market analysis to define your SWOT – Strengths, Weakness, Opportunities, and Threats. Market analyses are especially useful in determining the viability of a business venture.
Conducting a market analysis can be time consuming and confusing. If you are a start-up or entrepreneur in the WNC area and are looking to build a business plan or need help with this section, check out this resource from the North Carolina Small Business Center Network. Also check out our Resource Center for more local resources that help small businesses in Asheville for free.
2.1 Target Profiles
If modern branding is geared towards the consumer, then the first step to creating or recreating your brand is understanding your market. How do you go about that? This is a process called market segmentation where we study our target market to group them in four distinct segments: geographic, demographic, psychographic, and behavioral. We will then use our market segmentation, research, and experience to build a target profile.
- Zip code
- Education level
- Income level
- Marital status
- Family size
- Personality traits
- Brand loyalty
- Usage frequency
- Readiness to purchase
- Online usage, i.e. page views, time spent on page
- Preferred means to consume information
2.2 Geographic & Demographic Profile
This is the process of segmenting markets by physical location. If you are a barber in Asheville, your target geographic profile may be as narrow as the surrounding neighborhoods or as wide as the entire county.
This is more granular. Thanks to government agencies and processes like Census, much of this information is readily available for free. There is a list of resources we created to help you gather this data further down the page.
Do not rely solely on intuition. You may be surprised what “hidden gems” you can recover through research.
2.3 Psychographic & Behavioral Profile
This refers to the process of segmenting markets by personality traits, interests, hobbies, attitudes, values, and lifestyle. Who is your target market? What are they passionate about? This information is extremely valuable, as it allows you to craft messaging that connects with audiences on a deeper level.
While psychographic profiling looks at the “who,” behavioral profiling looks at the “how.” How does your target audience make purchase decisions? These metrics may include brand loyalty, interactive preference, readiness to purchase, or usage frequency. You can use this information to create customized marketing funnels for each segment to maximize conversions.
2.4 Target Profile Research
Your target profile is like a living organism. It is always evolving and becoming more specific with every campaign you run, sale you make, or service you provide – just like your brand does.
Now that you understand market segmentation, here are some resources to help you begin building your target profile.
Conducting a Survey
Build a custom survey on Survey Monkey with questions you write for the purpose of understanding more about the traits of your current foundation of your target profile. Don’t just focus your questions on what they currently think of your brand, but of those “traits” and what type of traits matter to your brand. Learn how to craft a psychographic survey here.
Fun Fact: As of September 2018, Survey Monkey filed for a $100 million IPO to hit the Nasdaq after 19 years of operation.
Conducting Focus Groups
Traditionally, focus group research is a way of collecting qualitative data, which—essentially—involves engaging a small number of people in an informal group discussion (or discussions), ‘focused’ around a particular topic or set of issues” (Wilkinson, 2004, p. 177).
Focus groups may seem like a tactic reserved only for large corporations, but that could not be further from the truth! With proper research and initiative, businesses of all sizes can take advantage of them.
Some articles will tell you to utilize friends or family for your focus group, but we advise against that to prevent bias from contaminating your results.
There are a few ways you can find the right people within your target market to take part in your focus group. First and foremost, utilize networking groups like your local Chamber of Commerce. If you are lucky enough to be close to the great town of Asheville, we have identified a huge list of amazing local resources you can use for networking, and I can guarantee you the people in these groups would be more than happy to participate in your focus group.
Utilize any current database you may have. If appropriate, your supporting customers may be thrilled to help your brand develop.
This TedEd video has a great explanation of the history of focus groups and how they work.
Implementing A/B Testing
A/B Testing refers to comparing two versions of a single variable, typically by testing a subject’s response to variant A against variant B, and determining which of the two variants is more effective. It really depends on what you are testing to determine how you can use A/B testing, but it is very effective on social media. You can test content, brand voices and imagery, and even test new brand concepts by comparing the results of different posting on different brand accounts.
Here are other ways to test your brand messages:
Learn Through Engagement!
Who better to tell you about your target profile than your customers themselves? Talk to your customers during check out, online or in-store. Ask them questions. You can map out their answers and find out where your customers live and work. If you don’t operate the type of business that can ask that of your customers, have a business card-drawing giveaway. Each business card is a goldmine of information – name, email, profession, website, where they work, what social media channels they’re on. You can even go as far to estimate annual income or property value. Use this information to sharpen your target profiles and messaging.
Find out what your target profile is interested in. Conduct thorough research into social media accounts, websites, articles, blogs, and more about your competitors, your current customers, or your target profile. You can also find services that can conduct this research for you, more procedurally, and build a target profile for you. But if you are thorough and persistent enough, we recommend doing this yourself. Nobody knows your brand better than you.
2.5 Competitor Research
Know your competition in and out by creating a full detailed analysis of your competitors! Start by doing some research and creating a framework to build off – here’s a template to get you started. Break them down by their price and their value compared to your goods or services. Determine their place in the market, value, incomes, and as much technical information as you can gather. Thoroughly investigate their online presence compared to your own. With a solid understanding of your competitors, you will be much more effective at creating and fine-tuning your brand to set you apart, while ensuring you turn over every stone they do.
Inc.com has a pretty good framework for conducting the competitor research on your own. However, this and many other resources will miss one of the many important advantages you have when conducting competitor research today: online presence. A competitor research doesn’t only need to tell you your place in the market, but you can also learn a lot about your competition’s marketing efforts and budgets, brand voice and objectives, and their overall online presence. You will learn more about some of these within other courses of The MEP. For now, here are a few digital tactics to assist you in understanding your market online.
Check out their website scores to see how their prioritize their online presence using some website audit tools like SEO Power Suite, which is a great program you can purchase and download, however the free version doesn’t give you much information. Some great free tools include GTmetrix, dareboost, and Web Page Test.
Search Engine Rankings
Research your competitor’s keyword rankings to learn their SEO strategies using tools like Small SEO Tools. You can also find holes in the SEO marketplace and plan what keywords have the best real estate for your business.
Digital Marketing Efforts
Learn which competitors are dominating digital marketing strategies. Search for industry-specific keywords in Google and visit webpages to note competitor results in search and display ads. Don’t spend money on this research, as typically this information wouldn’t be publicly available and you will get the most accurate results researching manually.