How to Define and Analyse Your Target Market

How to Define and Analyse Your Target Market
To best serve your customers, you have to know who they are. Here's how to determine who your core group of customers is.
by Colleen Egan May 01, 2019 — 4 min read
How to Define and Analyse Your Target Market

To best serve your customers, you have to know who they are. Of course, not everyone who buys your products or services fits the same profile, but as a company you should have a core customer base in mind. Not only does it help you streamline your product offerings, it also allows you to give those customers the best possible experience.

A system that grows with your business.

We’re with you from Square one to whatever’s next.

Learn More

What is a target market?

Another way to describe your core customer base is your target market. These are the people you think are the most suited to your products and services, so it’s essential that you understand them.

Understanding your target market is different from just making assumptions about it. Instead, it’s about really trying to figure out its needs and motivations. Demographics such as age, gender, education level, occupation, and family situation can help you determine what your customers need and what they’re willing to spend.

Beyond this, you should also consider who your customers are as people. What do they value? What is their lifestyle? What do they enjoy doing with their spare time? The answers to these questions can help you understand your target market on a deeper level.

How to identify your target market

Determining your target market isn’t as simple as guessing who your customers are, or hoping for a certain demographic. Instead, it requires an in-depth review of your products and services, the marketplace, your potential (or current) customers, and more.

Here are some tactics to help you identify your target market:

Analyse your offerings

Ask yourself what problems your products and services solve, and, in turn, to whom they appeal. For example, if you operate a landscaping business, your services would be attractive to homeowners with lawns and, more specifically, people who are too busy to care for their yard and can afford to pay someone to do it.

So, your target market would include higher-income adults with demanding jobs and/or children, who don’t have time for or interest in lawn care but still want it to look good.

Conduct market research

Analysing your target market goes beyond understanding your customers — you also have to understand the marketplace. Analytics tools like Quantcast, Alexa, and Google Trends give you a comprehensive view of the landscape by identifying and assessing competitors, helping you find new customers, and enabling you to determine ways to improve.

And check out the Australian Government’s website,, which offers lots of tips like how to research your market and the ABS Business Portal, which can help you research your industry and provides a number of resources for small businesses.

And don’t forget that some of the most helpful data can come from both existing and prospective customers. Tools like surveys, focus groups, and in-person discussions can help you understand what your target market needs, why it is (or isn’t) shopping with you, and what you can do to make your offerings more appealing. You can also look at data from your POS or CRM to glean insights about your customers.

Create customer profiles and market segments

Market segmentation is the process of organising a group based on various categories, like demographics and psychographics.

As discussed earlier, demographics describe the more surface-level, baseline characteristics, like age, gender, education level, ethnic background, and marital and family status. Psychographics, on the other hand, offer a deeper look into who people really are, like behaviors, values, personality, and lifestyle.

It’s important to consider both demographics and psychographics when trying to conduct a full analysis of your target market.

Assess the competition

Conduct a competitive analysis or use the online tools discussed above to get a comprehensive view of the competitive landscape. What are the businesses that offer comparable products and services? How much do they charge? What are they doing differently?

Unless you believe you have a significant advantage, avoid going after the same customer, especially in a small market where your competitors’ businesses are well established.

Using your target market analysis

Once you’ve completed your analysis, put that data to work. Here are some ways to use the information to grow and improve your business.

Product development: If your analysis helped you identify some holes in the market, you can use this information to create products and services that your target market needs.

Running a business is no easy feat, but Square is here to help. We have all the tools you need to start, run, and grow your business, whether you’re selling in person, online, or both. And we’ve made all our tools to work together as one system, saving you time and money — and making decisions easier. So you can get back to doing the work you love and focusing on whatever’s next. See how Square works.

Colleen Egan
Colleen Egan writes for Square, where she covers everything from how aspiring entrepreneurs can turn their passion into a career to the best marketing strategies for small businesses who are ready to take their enterprise to the next level.


Keep Reading

Tell us a little more about yourself to gain access to the resource.

i Enter your first name.
i Enter your surname.
i Enter a valid email.
i Enter a valid phone number.
i Enter your company name.
i Select estimated annual revenue.
i This field is required.

Thank you!
Check your email for your resource.

Results for

Based on your region, we recommend viewing our website in:

Continue to ->