target market profile example business plan

How to Create a Target Market Profile and Positioning Statement

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Many business professionals seem ready to accept credit for the saying, "When you try to sell to everyone, you end up selling to no one." You can find the saying on websites across the business and marketing continuum, which ought to tell you something: The saying holds much truth, particularly for the small-business owner, whose success, if not very survival, lies in differentiating his business.

No doubt you've already sketched a profile of your ideal customer, if only because you were prompted to do so as you wrote the business and marketing plans for your business. At some point, though, you want to refine and expound on that profile by creating a target market profile and positioning statement. The value of undertaking these exercises can be reduced to one word: detail. In the end, you'll have more details about your ideal customer than you may have thought possible. Just watch.

Your Ideal Customer Holds the Key

You probably already have a good start on a target market profile. You may have filed it under "ideal customer profile," your "target audience profile example," or your "target market demographics examples." Try not to get bogged down in semantics, though it's easy to do with marketing.

What you're after is finding out everything you can about your ideal customer – the person who is most likely to purchase your product or service. You know full well that when you try to sell to everyone, you end up selling to no one. So your goal is to discover as much as you can about your best customer, your ideal customer – not your competitor's or the customer you'd like to pursue in five or 10 years. Your business depends on developing a deep understanding of who your ideal customer is today. When you accomplish this, Digital Brand Blueprint advises, you can:

• Fully understand the wants and needs of your ideal customer
• Figure out how you can fulfill those wants and needs like no one else
• Effectively communicate with this customer
• Expertly target your marketing efforts

Another benefit should go without saying: You won't waste your valuable time and money marketing to "everyone."

Develop Your Profile in Five Steps

Your marketing plan may already include some target market demographic examples. You may have begun the process with a target audience profile template containing lots of questions. This is precisely where you want to begin the process of creating a target market profile, which consists of five steps:

• Describing the basic demographics of your ideal customer
• Explaining their needs, wants, problems and personality traits
• Mapping the stages they go through as they make a purchase
• Aligning your goals with theirs so that you can communicate you're on the same page
• Drafting a strategy for reaching these customers

Take the First Three Steps

First, your basic demographics should include:

• Education level
• Marital status
• Nationality
• Number of children
• Political affiliation
• Religious affiliation

At this point, a picture should be emerging, and it will become clearer when you proceed to the second step and delve into your ideal customer's personality and lifestyle. Now you're going to the heart of what is known as psychographics, which usually don't come fast and easy. They may emerge over time as you tweak and update your target market profile over the life span of your business. However, you can begin the process by figuring out:

• How do your ideal customers spend their free time?
• What type of activities do your customers enjoy?
• What types of problems do your ideal customers face? What are the most urgent concerns?
• How could your business present a solution to these problems?

Drilling down to your ideal customer's goals, aspirations and values may take the most time, which makes sense because many people are unwilling to share such private details until they feel comfortable doing so. For now, do the best you can and flag any gaps so that you can fill them in later.

The third step may also take some time, but you want to know how your ideal customer approaches and proceeds through the buying process, which typically involves:

• Identifying a need
• Searching for information
• Evaluating alternatives
• Considering a purchase
• Making a purchase
• Formulating a post-purchase evaluation

Unless a consumer is making an emergency purchase – for a water heater, for example – it's rare for any customer to glide through the process without pausing at least once. Your ideal customer, like many others, may spend the most time evaluating the alternatives. This alone is a dynamite piece of information to have; just imagine how you could frame marketing initiatives to position your company as the best choice.

Take the Next Two (or Three) Steps

The fourth step in creating a target market profile underscores another marketing truism: Customers are not created equal. Some may buy from you once and never return. Others may pop in only when you offer a promotion or discount. So aligning your business goals with your ideal customer may take some doing. If you sell an expensive, high-end product, such as built-in swimming pools, your profile will look very different from the small-business owner who owns a vitamin store and hopes to see his ideal customer every four weeks as he stocks up for the month.

Once you know who your ideal customer is, what's important to him or her, what he needs and how you fit in, it should be easier to devise a marketing strategy – the fifth step. Expect some trial and error at this phase because there are several moving parts that all need calibration:

• How do you capture their attention?
• How do you keep their attention?
• How do you steer them to your offering?
• How do you make them loyal customers who return to you again and again?

At this point, you may be worried about not just one gap in your target market profile, but several. Rather than develop "paralysis by analysis," solve the problem with one winning tactic. Oberlo recommends: Survey them. Flatter them with a pitch to get to know them better and ask them directly for the information you need to better serve them. This move should get their attention, and offering a thank you gift ought to help them remember your interest.

Move On to Your Positioning Statement

With your target market profile well in hand, your positioning statement supplies the finishing touch: How your product or service fills your ideal customer's prime need or want. Its purpose – and value – should be clear. According to Hubspot , "The positioning statement acts as a way to convey the value proposition to the brand's ideal customers while calling out the brand's identity, purpose and distinguishing features."

This brief and memorable statement should reflect your understanding of your:

• Target market
• Market category
• Customer pain point
• Brand promise
• Brand identity and values

Your positioning statement should declare, if not boast about:

• Your credible promise about what you can provide
• How your business is different from others, otherwise known as your differentiator

Writing isn't easy even for professional writers, so if you're struggling for inspiration, consider the positioning statements of two well-known companies:

• Amazon: "For consumers who want to purchase a wide range of products online with quick delivery, Amazon provides a one-stop online shopping site. Amazon sets itself apart from other online retailers with its customer obsession, passion for innovation, and commitment to operational excellence."
• Nike: "For athletes in need of high-quality, fashionable athletic wear, Nike provides customers with top-performing sports apparel and shoes made of the highest quality materials. Its products are the most advanced in the athletic apparel industry because of Nike's commitment to innovation and investment in the latest technologies."

Take some of the pressure off yourself and expect to go through several drafts before you come up with a positioning statement that says it all. Between this statement and your target market profile, you may be ready to write your own mantra: "Only careless types try to sell to everyone. When you identify your ideal customer, you've taken a huge step toward ensuring success for your small business."

• Digital Brand Blueprint: How to Create Target Customer Profiles
• Oberlo: What Is a Customer Profile? 4 Steps to Create Your Customer Profile
• Hubspot: 12 Examples of Positioning Statements & How to Craft Your Own

Mary Wroblewski earned a master's degree with high honors in communications and has worked as a reporter and editor in two Chicago newsrooms. Then she launched her own small business, which specialized in assisting small business owners with “all things marketing” – from drafting a marketing plan and writing website copy to crafting media plans and developing email campaigns. Mary writes extensively about small business issues and especially “all things marketing.”

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• 1 How to Write a Marketing Profile
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• 4 5-Step Strategic Marketing Process

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How to Write a Business Plan: Target Market Analysis

The Business Plan and the Importance of Defining Your Target Market

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Conducting a Market Analysis

Polling your target market, writing the market analysis, online tools for market research, u.s. online market research sources, canadian online market research, local sources of market research, doing your own market research.

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The market analysis is basically the target market section of your business plan . It is a thorough examination of the ideal people to whom you intend to sell your products or services.  

Even if you intend on selling a product or service only in your community, you won't be selling that service to everyone who lives there. Knowing exactly what type(s) of people might be interested in buying your product or service and how many of them reside in your projected area or region is fundamental in creating your market analysis.

Once target market data has been established, you'll also work on sales projections within specific time frames, as well as how prospective sales might be affected by trends and policies.

Research is key and cornerstone of any solid  business plan .

Don't Skip This Step!

Don't skip market research; otherwise, you could end up starting a business that doesn't have a paying market.

Use these general terms as linchpins in research data for the market analysis section of your business plan, and to identify your target market:

But don't stop here. To succinctly define your target market, poll or survey members of your prospective clients or customers to ask specific questions directly related to your products or services. For instance, if you plan to sell computer-related services, ask questions relating to the number of computing devices your prospective customers own and how often they require servicing. If you plan on selling garden furniture and accessories, ask what kinds of garden furniture or accessories your potential customers have bought in the past, how often, and what they expect to buy within the next one, three, and five years.

Answers to these and other questions related to your market are to help you understand your market potential.

The goal of the information you collect is to help you project how much of your product or service you'll be able to sell. Review these important questions you need to try to answer using the data you collect:

• What proportion of your target market has used a product similar to yours before?
• How much of your product or service might your target market buy? (Estimate this in gross sales and/or in units of product/service sold.)
• What proportion of your target market might be repeat customers?
• How might your target market be affected by demographic shifts?
• How might your target market be affected by economic events (e.g. a local mill closing or a big-box retailer opening locally)?
• How might your target market be affected by larger socio-economic trends?
• How might your target market be affected by government policies (e.g. new bylaws or changes in taxes)?

One purpose of the market analysis is to ensure you have a viable business idea.

Find Your Buying Market

Use your market research to make sure people don't just like your business idea, but they're also willing to pay for it.

If you have information suggesting that you have a large enough market to sustain your business goals, write the market analysis in the form of several short paragraphs using appropriate headings for each. If you have several target markets, you may want to number each. 

Sections of your market analysis should include:

• Industry Description and Outlook
• Target Market
• Market Research Results
• Competitive Analysis

Remember to properly cite your sources of information within the body of your market analysis as you write it. You and other readers of your business plan, such as potential investors, will need to know the sources of the statistics or opinions that you've gathered.

There are several online resources to learn if your business idea is something worth pursing, including:

• Keyword searches can give you an overall sense of potential demand for your product or service based on the number of searches.
• Google Trends analysis can tell you how the number of searches has changed over time.
• Social media campaigns can give you an indication of the potential customer interest in your business idea.

The U.S. Small Business Administration (SBA) has information on doing your market research and analysis , as well as a list of free small business data and trends resources you can use to conduct your research. Consider these sources for data collection:

• SBA  Business Data and Statistics  
• The U.S. Census Bureau maintains a huge database of demographic information that is searchable by state, county, city/town, or zip code using its census data tool . Community, housing, economic, and population surveys are also available.
• The U.S. Department of Commerce Bureau of Economic Analysis (BEA) has extensive statistics on the economy including consumer income/spending/consumption, business activity, GDP, and more, all of which are searchable by location.

The Government of Canada offers a guide on doing market research and tips for understanding the data you collect. Canadian data resources include:

• Statistics Canada  offers demographic and economic data.
• The  Business Development Bank of Canada (BDC)  offers market research and consulting with industry experts.
• The Canada Business Network provides business information to entrepreneurs by province/territory, including market research data.

There are also a great many local resources for building target market information to explore, including:

• Local library
• Local Chamber of Commerce
• Board of Trade
• Economic Development Centre
• Local government agent's office
• Provincial business ministry
• Local phone book

All of these will have information helpful in defining your target market and providing insights into trends.

The above resources are secondary sources of information, in which others have collected and compiled the data. To get specific information about your business, consider conducting your own market research . For instance, you might want to design a questionnaire and survey your target market to learn more about their habits and preferences relating to your product or service.

Market research is time-consuming but is an important step in affording your business plan validity. If you don't have the time or the research skills to thoroughly define your target market yourself, hiring a person or firm to do the research for you can be a wise investment.​

Small Business Administration. " Market Research and Competitive Analysis. " Accessed Jan. 13, 2020.

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How to Write a Market Analysis for a Business Plan

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A lot of preparation goes into starting a business before you can open your doors to the public or launch your online store. One of your first steps should be to write a business plan . A business plan will serve as your roadmap when building your business.

Within your business plan, there’s an important section you should pay careful attention to: your market analysis. Your market analysis helps you understand your target market and how you can thrive within it.

Simply put, your market analysis shows that you’ve done your research. It also contributes to your marketing strategy by defining your target customer and researching their buying habits. Overall, a market analysis will yield invaluable data if you have limited knowledge about your market, the market has fierce competition, and if you require a business loan. In this guide, we'll explore how to conduct your own market analysis.

How to conduct a market analysis: A step-by-step guide

In your market analysis, you can expect to cover the following:

Industry outlook

Target market

Market value

Competition

Barriers to entry

Let’s dive into an in-depth look into each section:

Step 1: Define your objective

Before you begin your market analysis, it’s important to define your objective for writing a market analysis. Are you writing it for internal purposes or for external purposes?

If you were doing a market analysis for internal purposes, you might be brainstorming new products to launch or adjusting your marketing tactics. An example of an external purpose might be that you need a market analysis to get approved for a business loan .

The comprehensiveness of your market analysis will depend on your objective. If you’re preparing for a new product launch, you might focus more heavily on researching the competition. A market analysis for a loan approval would require heavy data and research into market size and growth, share potential, and pricing.

Step 2: Provide an industry outlook

An industry outlook is a general direction of where your industry is heading. Lenders want to know whether you’re targeting a growing industry or declining industry. For example, if you’re looking to sell VCRs in 2020, it’s unlikely that your business will succeed.

Starting your market analysis with an industry outlook offers a preliminary view of the market and what to expect in your market analysis. When writing this section, you'll want to include:

Market size

Are you chasing big markets or are you targeting very niche markets? If you’re targeting a niche market, are there enough customers to support your business and buy your product?

Product life cycle

If you develop a product, what will its life cycle look like? Lenders want an overview of how your product will come into fruition after it’s developed and launched. In this section, you can discuss your product’s:

Research and development

Projected growth

How do you see your company performing over time? Calculating your year-over-year growth will help you and lenders see how your business has grown thus far. Calculating your projected growth shows how your business will fare in future projected market conditions.

Step 3: Determine your target market

This section of your market analysis is dedicated to your potential customer. Who is your ideal target customer? How can you cater your product to serve them specifically?

Don’t make the mistake of wanting to sell your product to everybody. Your target customer should be specific. For example, if you’re selling mittens, you wouldn’t want to market to warmer climates like Hawaii. You should target customers who live in colder regions. The more nuanced your target market is, the more information you’ll have to inform your business and marketing strategy.

With that in mind, your target market section should include the following points:

Demographics

This is where you leave nothing to mystery about your ideal customer. You want to know every aspect of your customer so you can best serve them. Dedicate time to researching the following demographics:

Income level

Create a customer persona

Creating a customer persona can help you better understand your customer. It can be easier to market to a person than data on paper. You can give this persona a name, background, and job. Mold this persona into your target customer.

What are your customer’s pain points? How do these pain points influence how they buy products? What matters most to them? Why do they choose one brand over another?

Research and supporting material

Information without data are just claims. To add credibility to your market analysis, you need to include data. Some methods for collecting data include:

Target group surveys

Focus groups

Reading reviews

Feedback surveys

You can also consult resources online. For example, the U.S. Census Bureau can help you find demographics in calculating your market share. The U.S. Department of Commerce and the U.S. Small Business Administration also offer general data that can help you research your target industry.

Step 4: Calculate market value

You can use either top-down analysis or bottom-up analysis to calculate an estimate of your market value.

A top-down analysis tends to be the easier option of the two. It requires for you to calculate the entire market and then estimate how much of a share you expect your business to get. For example, let’s assume your target market consists of 100,000 people. If you’re optimistic and manage to get 1% of that market, you can expect to make 1,000 sales.

A bottom-up analysis is more data-driven and requires more research. You calculate the individual factors of your business and then estimate how high you can scale them to arrive at a projected market share. Some factors to consider when doing a bottom-up analysis include:

Where products are sold

Who your competition is

The price per unit

How many consumers you expect to reach

The average amount a customer would buy over time

While a bottom-up analysis requires more data than a top-down analysis, you can usually arrive at a more accurate calculation.

Step 5: Get to know your competition

Before you start a business, you need to research the level of competition within your market. Are there certain companies getting the lion’s share of the market? How can you position yourself to stand out from the competition?

There are two types of competitors that you should be aware of: direct competitors and indirect competitors.

Direct competitors are other businesses who sell the same product as you. If you and the company across town both sell apples, you are direct competitors.

An indirect competitor sells a different but similar product to yours. If that company across town sells oranges instead, they are an indirect competitor. Apples and oranges are different but they still target a similar market: people who eat fruits.

Also, here are some questions you want to answer when writing this section of your market analysis:

What are your competitor’s strengths?

What are your competitor’s weaknesses?

How can you cover your competitor’s weaknesses in your own business?

How can you solve the same problems better or differently than your competitors?

How can you leverage technology to better serve your customers?

How big of a threat are your competitors if you open your business?

Step 6: Identify your barriers

Writing a market analysis can help you identify some glaring barriers to starting your business. Researching these barriers will help you avoid any costly legal or business mistakes down the line. Some entry barriers to address in your marketing analysis include:

Technology: How rapid is technology advancing and can it render your product obsolete within the next five years?

Branding: You need to establish your brand identity to stand out in a saturated market.

Cost of entry: Startup costs, like renting a space and hiring employees, are expensive. Also, specialty equipment often comes with hefty price tags. (Consider researching equipment financing to help finance these purchases.)

Location: You need to secure a prime location if you’re opening a physical store.

Competition: A market with fierce competition can be a steep uphill battle (like attempting to go toe-to-toe with Apple or Amazon).

Step 7: Know the regulations

When starting a business, it’s your responsibility to research governmental and state business regulations within your market. Some regulations to keep in mind include (but aren’t limited to):

Employment and labor laws

Advertising

Environmental regulations

If you’re a newer entrepreneur and this is your first business, this part can be daunting so you might want to consult with a business attorney. A legal professional will help you identify the legal requirements specific to your business. You can also check online legal help sites like LegalZoom or Rocket Lawyer.

Tips when writing your market analysis

We wouldn’t be surprised if you feel overwhelmed by the sheer volume of information needed in a market analysis. Keep in mind, though, this research is key to launching a successful business. You don’t want to cut corners, but here are a few tips to help you out when writing your market analysis:

Use visual aids

Nobody likes 30 pages of nothing but text. Using visual aids can break up those text blocks, making your market analysis more visually appealing. When discussing statistics and metrics, charts and graphs will help you better communicate your data.

Include a summary

If you’ve ever read an article from an academic journal, you’ll notice that writers include an abstract that offers the reader a preview.

Use this same tactic when writing your market analysis. It will prime the reader of your market highlights before they dive into the hard data.

Get to the point

It’s better to keep your market analysis concise than to stuff it with fluff and repetition. You’ll want to present your data, analyze it, and then tie it back into how your business can thrive within your target market.

Revisit your market analysis regularly

Markets are always changing and it's important that your business changes with your target market. Revisiting your market analysis ensures that your business operations align with changing market conditions. The best businesses are the ones that can adapt.

Why should you write a market analysis?

Your market analysis helps you look at factors within your market to determine if it’s a good fit for your business model. A market analysis will help you:

1. Learn how to analyze the market need

Markets are always shifting and it’s a good idea to identify current and projected market conditions. These trends will help you understand the size of your market and whether there are paying customers waiting for you. Doing a market analysis helps you confirm that your target market is a lucrative market.

2. Learn about your customers

The best way to serve your customer is to understand them. A market analysis will examine your customer’s buying habits, pain points, and desires. This information will aid you in developing a business that addresses those points.

3. Get approved for a business loan

Starting a business, especially if it’s your first one, requires startup funding. A good first step is to apply for a business loan with your bank or other financial institution.

A thorough market analysis shows that you’re professional, prepared, and worth the investment from lenders. This preparation inspires confidence within the lender that you can build a business and repay the loan.

4. Beat the competition

Your research will offer valuable insight and certain advantages that the competition might not have. For example, thoroughly understanding your customer’s pain points and desires will help you develop a superior product or service than your competitors. If your business is already up and running, an updated market analysis can upgrade your marketing strategy or help you launch a new product.

Final thoughts

There is a saying that the first step to cutting down a tree is to sharpen an axe. In other words, preparation is the key to success. In business, preparation increases the chances that your business will succeed, even in a competitive market.

The market analysis section of your business plan separates the entrepreneurs who have done their homework from those who haven’t. Now that you’ve learned how to write a market analysis, it’s time for you to sharpen your axe and grow a successful business. And keep in mind, if you need help crafting your business plan, you can always turn to business plan software or a free template to help you stay organized.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

On a similar note...

What Is a Target Market (And How to Find Yours)

The better you understand your target market, the more you’ll be able to focus your ads and reach the audience most likely to convert into customers.

Table of Contents

Your target market sets the tone for your entire marketing strategy — from how you develop and name your products or services right through to the marketing channels you use to promote them.

Here’s a hint before we dig in: Your target market is not “everyone” ( unless you’re Google ). Your task in defining your target market is to identify and understand a smaller, relevant niche so you can dominate it. It’s all about narrowing your focus while expanding your reach.

In this guide, we’ll help you learn who’s already interacting with your business and your competitors, then use that information to develop a clear target market as you build your brand .

Bonus: Get the free template to easily craft a detailed profile of your ideal customer and/or target audience.

What is a target market?

A target market is the specific group of people you want to reach with your marketing message . They are the people who are most likely to buy your products or services, and they are united by some common characteristics, like demographics and behaviors.

The more clearly you define your target market, the better you can understand how and where to reach your ideal potential customers. You can start with broad categories like millennials or single dads, but you need to get much more detailed than that to achieve the best possible conversion rates.

Don’t be afraid to get highly specific. This is all about targeting your marketing efforts effectively, not stopping people from buying your product.

People who are not included in your targeted marketing can still buy from you—they’re just not your top focus when crafting your marketing strategy. You can’t target everyone, but you can sell to everyone.

Your target market should be based on research, not a gut feeling . You need to go after the people who really want to buy from you, even if they’re not the customers you originally set out to reach.

What is target market segmentation?

Target market segmentation is the process of dividing your target market into smaller, more specific groups. It allows you to create a more relevant marketing message for each group.

Remember — you can’t be all things to all people. But you can be different things to different groups of people.

For example, as a vegetarian, I’ve eaten plenty of Impossible Burgers. I’m definitely a target customer. But vegetarians are a surprisingly small target market segment for Impossible Foods: only 10% of their customer base.

That’s why Impossible Foods’ first national advertising campaign was definitely not targeted at me:

https://www.facebook.com/ImpossibleFoods/videos/158779836141556

The target market segment for this ad campaign was “meat eaters who haven’t yet tried Impossible products.”

Vegetarians and meat eaters have different reasons for eating plant-based burgers and want different things from the experience. Target market segmentation ensures the company reaches the right audience with the right message.

How to define your target market

Step 1. compile data on your current customers.

A great first step in figuring out who most wants to buy from you is to identify who is already using your products or services. Once you understand the defining characteristics of your existing customer base, you can go after more people like that.

Depending on how someone connects with your business, you might have only a little information about them, or a lot.

This doesn’t mean you should add a lot of questions to your order or opt-in process just for audience research purposes — this can annoy customers and result in abandoned shopping carts.

But do be sure to use the information you naturally acquire to understand trends and averages .

Your CRM is a goldmine here. UTM parameters combined with Google Analytics can also provide useful information about your customers.

Some data points you might want to consider are:

• Age: You don’t need to get too specific here. It won’t likely make a difference whether your average customer is 24 or 27. But knowing which decade of life your customers are in can be very useful.
• Location (and time zone): Where in the world do your existing customers live? In addition to understanding which geographic areas to target, this helps you figure out what hours are most important for your customer service and sales reps to be online, and what time you should schedule your social ads and posts to ensure best visibility.
• Language: Don’t assume your customers speak the same language you do. And don’t assume they speak the dominant language of their (or your) current physical location.
• Spending power and patterns: How much money do your current customers have to spend? How do they approach purchases in your price category?
• Interests: What do your customers like to do, besides using your products or services? What TV shows do they watch? What other businesses do they interact with?
• Challenges: What pain points are your customers facing? Do you understand how your product or service helps them address those challenges?
• Stage of life: Are your customers likely to be college students? New parents? Parents of teens? Retirees?

If you’re selling B2B products, your categories will look a little different. You might want to collect information about the size of businesses that buy from you, and information about the titles of the people who tend to make the buying decisions. Are you marketing to the CEO? The CTO? The social marketing manager?

Step 2. Incorporate social data

Social media analytics can be a great way of filling out the picture of your target market. They help you understand who’s interacting with your social accounts, even if those people are not yet customers.

These people are interested in your brand. Social analytics can provide a lot of information that might help you understand why. You’ll also learn about potential market segments you may not have thought to target before.

You can also use social listening to help identify the people who are talking about you and your product on social media, even if they don’t follow you.

If you want to reach your target market with social ads, lookalike audiences are an easy way to reach more people who share characteristics with your best customers.

Step 3. Check out the competition

Now that you know who’s already interacting with your business and buying your products or services, it’s time to see who’s engaging with the competition.

Knowing what your competitors are up to can help you answer some key questions:

• Are your competitors going after the same target market segments as you are?
• Are they reaching segments you hadn’t thought to consider?
• How are they positioning themselves?

Our guide on how to do competitor research on social media walks you through the best ways to use social tools to gather competitor insights.

You won’t be able to get detailed audience information about the people interacting with your competitors, but you’ll be able to get a general sense of the approach they’re taking and whether it’s allowing them to create engagement online.

This analysis will help you understand which markets competitors are targeting and whether their efforts appear to be effective for those segments.

Step 4. Clarify the value of your product or service

This comes down to the key distinction all marketers must understand between features and benefits. You can list the features of your product all day long, but no one will be convinced to buy from you unless you can explain the benefits .

Features are what your product is or does. The benefits are the results. How does your product make someone’s life easier, or better, or just more interesting?

If you don’t already have a clear list of the benefits of your product, it’s time to start brainstorming now. As you create your benefit statements, you’ll also by default be stating some basic information about your target audience.

For example, if your service helps people find someone to look after their pets while they’re away, you can be pretty confident that your market will have two main segments: (1) pet owners and (2) existing or potential pet-sitters.

If you’re not sure exactly how customers benefit from using your products, why not ask them in a survey, or even a social media poll ?

You might find that people use your products or services for purposes you haven’t even thought of. That might, in turn, change how you perceive your target market for future sales.

Step 5. Create a target market statement

Now it’s time to boil everything you’ve discovered so far into one simple statement that defines your target market. This is actually the first step in creating a brand positioning statement , but that’s a project for another day. For now, let’s stick to creating a statement that clearly defines your target market.

For example, here’s Zipcar’s brand positioning statement, as cited in the classic marketing text Kellogg on Marketing . We’re interested in the first part of the statement, which defines the target market:

“To urban-dwelling, educated, techno-savvy consumers who worry about the environment that future generations will inherit, Zipcar is the car-sharing service that lets you save money and reduce your carbon footprint, making you feel you’ve made a smart, responsible choice that demonstrates your commitment to protecting the environment.”

Zipcar is not targeting all residents of a particular city. They’re not even targeting all the people in a given city who don’t own a car. They’re specifically targeting people who:

• live in an urban area
• have a certain degree of education
• are comfortable with technology
• are concerned about the environment

These are all interests and behaviors that Zipcar can specifically target using social content and social ads .

View this post on Instagram A post shared by Zipcar (@zipcar)

They also help to guide the company’s overall approach to its service, as evidenced by the rest of the positioning statement.

When crafting your target market statement, try to incorporate the most important demographic and behavior characteristics you’ve identified. For example:

Our target market is [gender(s)] aged [age range], who live in [place or type of place], and like to [activity].

Don’t feel like you need to stick to these particular identifiers. Maybe gender is irrelevant for your market, but you have three or four key behaviors to incorporate in your statement.

If you offer multiple products or services, you might need to create a target market statement for each market segment. In this case, it’s useful to define buyer personas .

Target market examples

Nike target market.

Despite its current market domination, Nike actually provides a great example of what can go wrong when you try to target too general of an audience.

Nike started out as a running shoe company. In the 1980s, they tried to expand their target market beyond runners to include anyone who wanted comfortable shoes. They launched a line of casual shoes, and it flopped.

Here’s the thing: Non-runners were already buying Nike shoes to walk to work, or for other casual purposes. Nike spotted this as an opportunity to expand. Instead, they diluted their brand promise, and the company actually started losing money.

The lesson, according to company founder Phil Knight?

“Ultimately, we determined that we wanted Nike to be the world’s best sports and fitness company and the Nike brand to represent sports and fitness activities. Once you say that, you have focus.”

While Nike would certainly not stop casual users from buying its shoes, the company refocused everything from product development to marketing on its target market: athletes of all levels, from pro to beer league.

In fact, understanding the importance of focus led Nike into a highly effective strategy of target market segmentation. The brand has multiple target markets for its various product lines.

On social, that means they use multiple accounts to reach their different target market groups. No one account tries to be all things to all customers.

The post below from Nike’s general Instagram account targets the segment of their audience interested in fashion and lifestyle products.

View this post on Instagram A post shared by Nike Basketball (@nikebasketball)

But the company also has channels dedicated to specific sports. Here’s an example of the content they create for runners:

View this post on Instagram A post shared by Nike Running (@nikerunning)

And that means … the brand has been able to return to marketing its products specifically for casual wear. It just reaches the casual target market through different channels than it uses for its athletic markets. It’s a different target market segment, and a different marketing message

View this post on Instagram A post shared by Nike Sportswear (@nikesportswear)

Like Nike, you might have one target market, or many, depending on the size of your brand. Remember that you can only speak effectively to one target market segment at a time.

Takasa target market

Takasa is a Canadian retail homewares company that specializes in organic, fair trade bedding and bath linens.

Here’s their target market as defined by founders Ruby and Kuljit Rakhra:

“ Our target market is the LOHAS segment, which means Family Lifestyles of Health and Sustainability. This group of people is already living, or striving to live, a green lifestyle … We know our target demo is very conscious about what their families consume, as well as the impact this consumption has on the environment.”

In their social content, they clearly identify the product features most important to their target market: organic materials and fair labor practices.

View this post on Instagram A post shared by Organic + Fairtrade Home Goods (@takasa.co)

The City of Port Alberni’s target market

Why does a city need a target market? In Port Alberni’s case, the city is working to “attract investment, business opportunities and new residents.” To that end, they launched a rebranding and marketing campaign.

And a marketing campaign, of course, needs a target market. Here’s how the city defined it:

“ Our target market is young people and young families 25 to 45 years of age who are entrepreneurial-minded, family oriented, adventurous, enjoy an active lifestyle, desire an opportunity to contribute to growth, well-educated and skilled professionals or tradespeople.”

In their social content, they highlight recreational opportunities aimed at those active and adventurous young families, even using the handle @PlayinPA.

View this post on Instagram A post shared by City of Port Alberni (@playinpa)

White House Black Market target market

White House Black Market is a women’s fashion brand. Here’s how they describe their target customer on their website :

“Our customer … is strong yet subtle, modern yet timeless, hard-working yet easy-going.”

That’s a fine description when talking directly to customers. But the marketing department needs a target market definition with a few more specifics. Here’s the detailed target market as described by the company’s former president:

“ Our target market is women [with a] median age of about 45 … at a stage in her life where she’s very busy, primarily a working woman. She’s probably got one or two kids left at home [or] … her children may be out of the house and on their way to college.”

With their hashtag #WHBMPowerhouse, they focus on this key demographic of women in their 40s with busy home lives and careers.

View this post on Instagram A post shared by White House Black Market (@whbm)

Use Hootsuite to better target your audience on social media. Create, schedule, and publish posts to every network, get demographic data, performance reports, and more. Try it free today.

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Christina Newberry is an award-winning writer and editor whose greatest passions include food, travel, urban gardening, and the Oxford comma—not necessarily in that order.

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Home > Business Plan > Target Market in a Business Plan

Target Market in a Business Plan

… we are targeting this part of the market …

What is the Target Market?

Target Market Segments

Your product will not be of equal interest to all potential customers, as they do not all have the same needs and characteristics. This section of the business plan deals with the analysis of the target market into different groups of customers (customer or target market segments) each having distinct characteristics and needs from the product.

The target market segmentation strategy depends on the business and the product, but generally segmentation falls into the following customer characteristics groups.

Psychographic segmentation

Psychographic segmentation splits up a sales market of a business based on such things as the social class, lifestyle choices, personality traits, tastes, attitudes, and the opinions of its customers.

Psychographic market segmentation examples include the promotion of products such as cars as these often reflect a customers lifestyle, and leisure activities. For example, a car business might identify customers who are interested in keeping the environment green and promote hybrid cars to them, or a business involved in activity holidays will seek to market to customers who show a preference for an active lifestyle.

Demographic segmentation

• Social class
• Size of family
• Nationality

Geographic Segmentation

Geographic segmentation is the process of splitting up a sales market of a business based on the geographical location of the customers. It is a particularly important marketing tool when the business is a multinational, worldwide business, but is also used by businesses to split their markets into region, county, state, city, neighborhood, or postal code.

A geographic segmentation example would be seasonal clothing items such as coats and swimwear. In contrast, in a colder climate coats would be marketed and sold all year round whereas swimwear would be highly seasonal during the holiday period. In a hot climate swimwear would be the all year round product and winter coats might not be sold at all.

Behavioral segmentation

Behavioral segmentation is the process of splitting up the sales market based on brand loyalty, usage, benefits required.

Target Market Presentation in the Business Plan

The business plan target market section can be presented in a number of formats, but a listing of the major customer segments together with a pie chart will show the investor where the main potential for the product lies. In the example below, the market is split into four main segments both in terms of number of customers and percentage of the total target market.

The average customer spend is also included, to reconcile the total target market back to the served available market (SAM) in monetary terms. Finally, a brief statement about the growth prospects for the market is included to show the investor the potential for growth in your chosen customer segments.

When identifying the target-market segments, it is important to be as specific as possible about the customer characteristics which make up each segment. In choosing which segments to concentrate on, take into account the size and potential for growth of each segment, and identify clearly what benefits, both emotional and financial, the product provides for the customer.

This is part of the financial projections and Contents of a Business Plan Guide , a series of posts on what each section of a simple business plan should include. The next post in this series is about the analysis of the competition for the target-market.

About the Author

Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.

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How To Define Your Target Market in 7 Steps

• Written by Bryan Philips
• Topic: Digital Marketing
• 19 minutes read

Customers are the lifeblood of any business, and knowing them is vital to your digital marketing strategy . You must ask yourself, “Who would be a good fit for my product? And what are their interests and priorities?” These questions might help you decide which contracts you’re most likely to win. But, precisely, how do you identify a target market, and what exactly is it?

Let’s look at what a target market is, analyze, see some helpful examples and go through target market segmentation.

Target Market Definition

A target market is a group of people for whom your products and services are intended. Typically, it’s established by industry, representing a specific part of the larger market that the sector covers. It’s usually determined by behavioral patterns, geographic location, and demographic variables.

Let’s assume you’ve developed a B2B software product that automates the calculation of sales commissions. You’d presumably concentrate on businesses that pay cash incentives with more than 20 salespeople in this scenario.

You’re well-versed in your industry, but there’s no one-size-fits-all mold for the companies that operate within it. If you were attempting to target a market for your product, start with company qualities such as scale.

A targeting strategy is a long-term approach that focuses on your ideal customer’s demographic, psychographic, and behavioral variables to improve sales performance. To do so, you must first figure out who your target market is and what they want from you.

For example, suppose you’re a B2B SaaS company with less than 100 employees selling to a Fortune 1000 company. In that case, this isn’t the same thing as it is for a large telecommunications corporation with millions of customers. You’d want to know exactly how big your ideal client’s business was to get started on a target market analysis.

How to Analyze Your Audience

To properly grasp your target audience, you must first conduct some research. You’ll design a marketing plan that works if you know who your products and services are and how to locate them.

Analyze Your Niche

Whatever you’re offering, it’s most valuable to a very particular set of people. Take a look at what you’re selling and why you’re selling it to understand your niche. This will assist you in not only determining what you have to offer and why your potential customer would want to buy it. Consider the following questions:

• What purpose does your product or service serve?
• Is there anything wrong with their life that your product or service could help them solve?
• What are the advantages of buying your goods or service? How does it benefit your potential consumer’s life?

Return to these answers whenever you’re lost in the minutia of your target market study. Allow them to be your guide while conducting your research.

Know Your Existing Customers

If you’re already generating a profit in your business, that means you have immediate access to your target audience. After all, since your present clients have already purchased with you, you can reasonably assume they convert.

You may target more people similar to your current clientele with your marketing strategy once you recognize them. Examine your customer base for any patterns in their characteristics, such as demographic or psychographic data like:

• Age  – What is the typical age range of your existing customers? This information will come in handy when determining your target segment for social media advertisements.
• Gender  – Are your customers primarily male or female? This may assist you in better comprehending their distinct requirements and desires, which may be gender-specific.
• Income  – What is the maximum amount of money your consumers can spend on your goods or services? Are they able to make repeat purchases, or do they need to save up for your product? Are there any financial restrictions in place that you must consider?
• Location  – What time zone are your customers in, and where do they live? What cultural issues do they face that are particular to their region (for example, advertisements for American football versus real football)?
• Behavior  – How do your consumers spend their time online? Which websites or brands do they follow, and which social media platform do they prefer? What material do your customers enjoy, and can you utilize it in your content marketing plan?
• Lifestyle  – What hobbies or activities do your consumers enjoy? What goods or services do they require to pursue those interests?
• Values  – What are the beliefs and values of your target audience? Is there a link between their brand loyalty and these beliefs and values?

This is the stage of developing a buyer persona. Start by dividing your target market into several target customers, also known as buyer personas.

Perhaps your target market is midsized firms wanting to buy sales performance management software. You might categorize your target consumers into several categories: finance department executives, sales leaders, founders, or CEOs.

What if I don’t have any customers?

No sweat! Check out the competition and their clients’ testimonials. From there, you’ll be able to reverse engineer a buyer persona for your own business. It also doesn’t hurt to reach out to these people for a 1:1 to discuss their opinions on your product’s niche.

Access Your Analytics

Knowing what content to post and where to publish it is critical to employ ads or create a digital marketing plan. This is simple to figure out by looking at what type of material attracts people to your website or social media profile and engages with your content.

You’ll find may find a wealth of data in your website’s analytics dashboard, as well as on its social media platforms. Here are some of the apps we recommend using:

• Search Engine Optimization: SEMrush
• LinkedIn: Shield
• Social Media: Reportei

Know Your Competition

Examine your competition to see who they’re aiming at. Take a look at their customer base to see if you can find a missing segment of the market that they may be neglecting.

Conducting a competitive analysis is the most effective approach to do so. You’ll research to figure out who your competitors are, what they have to offer, and even how they sell. Visit their website, blog, social media accounts, and advertisements in order of preference to see if you can figure out their target market strategy. Consider the following while investigating:

• Can you figure out how they have segmented their clients?
• What is their ideal customer profile?
• Do they have a particular target industry or many different ones? What is it/are they, and why do you want to know about them?
• What methods do they use for marketing their goods? What types of language do they utilize? What product characteristics are highlighted in their advertisements?
• What is their typical publishing frequency? Do they send or publish emails regularly?

Looking at your competition can assist you in identifying target market gaps that you may address. Are there any markets where they aren’t paying attention to?

This may encourage you to expand into new markets or develop new goods to cater to a different sector.

Product Features And Benefits

When conducting a target audience analysis, you should invest time to figure out what motivates potential consumers to buy your goods.

This is after you’ve determined who your target audience is and before you begin making efforts to reach them. The aim is to:

• Demand Generation is to use distribution channels and provide people content that educates, informs, and changes their perceptions before they need a solution to their problems.
• Lead Generation is to catch them in the decision-making process while they’re still trying to decide whether or not they want to buy anything.

The best approach is to demonstrate how your solutions or services may help them improve their lives.

Many marketers talk about this in terms of product features vs. product benefits. The product feature is what the item or service is or performs. The result, as well as its influence on your potential consumers, is known as the benefit.

Let’s use Performio (Sales Performance Management Software) as an example; one of the product’s features is “Performance Reporting and Dashboards” and the benefits are “better motivate your sales teams and agents by showing them all their performance metrics.”

What do their customers think?

Do salespeople really find Performio easy to use? YES! Performio delivers on its promise to help reps improve and track performance.

Customers are more inclined to buy your product if you demonstrate how it will benefit them. Better marketing, in a nutshell, improves your sales velocity and lowers customer acquisition costs.

If you aren’t yet clear on your product’s benefits, now is the time to make a list. Make a list of your top items that you plan to advertise with Facebook and Instagram ads.

Not only will this approach assist you in selling your items, but it will also aid you in identifying your target audience.

As in the case with Performio, the product has customers spending less time paying for performance and more time driving performance. Their target audience is businesses that are high-growth or enterprise organizations.

You’ll discover more about your target consumer if you grasp how your product benefits them.

Validate Value Proposition

Now that you’ve finished your audience study and have a clear image of who your target consumer is, it’s time to start advertising. Though search engine optimization (SEO) is the most effective marketing approach with the greatest return on investment, producing ads allows you to make quick progress while also providing you with a wealth of information.

You can start running Facebook and Instagram advertising quickly with Facebook Ads Manager. And if you’re not sure where to start placing advertisements, check out Audience Insights to see how your target audience compares to real-world Facebook users.

To begin, build a custom audience based on your research, then create variants of advertising for the same product.

You may also use the same ad on multiple audiences you develop with custom audiences. Spend around  $5 per ad set to see how people respond, whether they click your ads or even buy your items . The goal is to test out your advertisements and audiences until you discover the best combination that results in conversions.

Use this testing procedure regularly and with each new product you want to market. Also, if required, conduct further audience analysis to verify that your marketing is reaching the correct people.

Examples of Target Markets in Technology

Apple’s target market.

Isn’t there another company that straddles both the B2B and B2C markets? How can a company with such a broad client base identify a target market? Apple is the textbook example of innovation and product design.

But how does this relate to locating a target market? With so many different products, Apple has something for everyone. Here are two of their target markets:

• Consumers:  Apple still pays attention to technology enthusiasts, who have been with the brand for decades. By introducing new technology categories (including wearables, Apple TVs, and HomePods), Apple has demonstrated that it still provides value to this group. There’s also an ecosystem play in which having a set of Apple devices allows for greater interoperability among your tech.
• Pro Users:  Apple had seemingly forgotten why people bought the MacBook Pro in the first place, and professionals were delighted to remind it. Five years later, Apple has delivered on everything those pros said they wanted.

Apple does not appear to exclude many people from its target market. It has positioned itself to benefit both customers and businesses – even with the same items as the iPad. Its success can be attributed to its management’s ability to grasp the value of each part rather than excluding people from them.

Facebook’s Target Market

The focus market for Facebook has changed over time. The company targeted college students in the United States in its early years. Facebook now targets a broader market and is viewed as a social media network primarily utilized by middle-aged (25-34 years) mobile using adults in 157 countries.

IBM’s Target Market

IBM is changing part of its sales organization to target the small-to-midsized business sector better. IBM will break down its Systems and Technology Group (STG) into two separate sales teams: selling to large enterprise customers and selling to SMBs. They are classified as company clients with fewer than 1,000 employees.

Atlassian’s Target Market

Atlassian’s suite of collaboration tools is designed to assist developers and product leaders in taking their projects from concept to completion. On their “Customers” page, you’ll discover that it serves a variety of industries.

Like other large firms, Atlassian uses target market segmentation to analyze various markets and distinguish between its distinct value propositions, language, and values. When we look at one sector, such as retail, we find that they’re linked with several prominent firms – especially in terms of customer support products.

Atlassian can work with almost any developer, but it recognizes the market segment in which its value proposition varies. Even the same product for two different client types generates varying levels of value.

Netflix’s Target Market

Rather than attempting to reach their target market through one-size-fits-all advertising, Netflix took a different tack: fostering relationships with renowned creators and building customer loyalty.

They constantly research their customers and give them precisely what they want. Netflix, for example, has notoriously leaned into its audience and pivoted when needed by offering a wide range of streaming services.

They also allow word-of-mouth marketing to power their sales by letting it do so.

Types of Target Market Segmentation

The process of categorizing your target audience into smaller, more focused groups (or segments) is known as target market segmentation. It’s a broad idea that can take on many shapes and forms, including:

• Firmographic segmentation:  B2B sales specifically, B2B companies are divided based on characteristics like company size or the number of employees.
• Technographic segmentation:  Dividing your target market according to what types of technology they have purchased.
• Geographic segmentation:  Dividing your target market according to geographic boundaries.
• Demographic segmentation:  Dividing your target market into groups based on variables such as income, education, race, gender, or profession.
• Behavioral segmentation:  Dividing your target market into segments based on behavioral biases and decision-making habits.
• Psychographic segmentation:  Dividing your market into groups based on personality traits, values, or beliefs.

Firmographic Segmentation

The practice of dividing clients into groups based on similar corporate or organization characteristics is known as firmographic segmentation. Firmographic data is collected and assessed in the same way as other sorts of segmentation to understand the needs and wants of the target audience.

The most common factors of firmographic segmentation are:

• Company Size or Department Size
• Company Structure
• Annual Revenue of Funding Round
• Growth Rate

Mapping your competitors’ business pages to understand their marketing and advertising efforts, as well as the company’s tone of voice, is an excellent way to begin analyzing how you might improve. By targeting a firm based on its name (or trade name), you can find out what it does and learn more about potential customers through their social media feeds without having to seek them out one by one.

Like demographic segmentation, Firmographic segmentation provides essential insights about prospects to shape and advance company policies. However, firms employing firmographic segmentation should consider that demographic segmentation is a crucial division.

Firmographics are concerned with analyzing consumer behaviors and preferences. Their main goal is to assist businesses in segmenting prospective B2B customers into relevant categories. Salespeople and marketers may save time and money by having access to pre-segmented client data on each potential customer’s size, location, or revenue classification. Here are a few reasons why firmographic segmentation is proper:

Better Resource Allocation

Firmographics may be readily added to the marketing process at a low cost, allowing marketers to meet their marketing objectives without spending much money.

It also helps you save time. Marketers may spend a significant amount of time learning about metrics at first. However, adopting firmographics will help them avoid wasting hours on unproductive leads in the long run by allowing them to skip learning about metrics for now. Instead, they’ll focus their efforts on prospects who are more qualified.

Better Interaction with Customers

Like any other form of segmentation, it may aid companies in developing a more personalized marketing strategy for their clients by drawing their attention.

Customizing communications and strategies is one of the many ways that Internet-based firms may improve consumer interactions and services by connecting more efficiently with their customers.

Higher ROI and Better Targeting

Companies that want to sell products or services to the B2B market should understand the firmographic data, such as size, structure, and market size. As a result, sales and revenue will increase.

Technographic Segmentation

Technology companies can learn a lot from Technographics data. A person’s technographic profile is the sum of their technology ownership and use.

The data is particularly beneficial for B2B software and technological firms. While other sectors might be evaluated on various actions, technology features are most advantageous to these businesses in qualifying ideal-fit leads.

The Technographics measure the use of technology to reach consumers, especially in young adulthood. The Technographics are frequently confused with the similarly named Technological age group. Most data providers rely on a mix of data mining and curation to acquire information about people’s technological usage. Users may then segment their audience based on specific verticals.

Individuals may be classified into six distinct technographic profiles. These six types are regarded as a ladder, with each rung representing a progressively deeper relationship with technology. Individual technographic profiles range from least to most active, including:

• Inactives:  People with zero engagement. They don’t create content and have no intention of engaging with everyone else.
• Spectators:  People who don’t create content but will happily observe. Think people who consume content like videos, podcasts, and blog posts – without maintaining their social profile.
• Joiners:  People who maintain their online presence but do not distribute content.
• Collectors:  People who have a steady stream of content they consume and are beginning to engage, e.g., Likes, Tags, and Shares.
• Critics:  People who contribute their opinions to the content that others have created, e.g., leaving a comment to offering their contributions to a forum.
• Conversationalists:  People who can distribute content to a broad enough audience that creates engagement.
• Creators:  People who develop and distribute the content consumed by the technographic profiles beneath them.

Technographic segmentation may be pretty beneficial in a variety of ways thus far. There are several ways for businesses to use technographic segmentation. The most excellent method will be determined by the company’s target audience, industry, and sales strategy. Here are a few examples of technographic segmentation:

Anticipating and timing prospect needs

Knowing when a firm uses particular hardware or software might signal the need for contact if you provide professional services. Instead of guessing what tools a firm is using or sending out your outreach at random, technographic data ensures that you have all the necessary information to make a compelling sales call.

Improving sales efforts.

The Technographic data can significantly enhance the entire sales process. Your team may better prioritize their leads, reject poor-fit possibilities, and simplify outreach operations by thoroughly comprehending both your clients’ and prospects’ technology ownership and usage.

Anticipating and overcoming sales barriers.

With a firm grasp on your prospects’ technology infrastructure, you can enter any sales discussion with a clear view of their current state. If you’ve noticed recurring sales difficulties or questions that specific hardware or software users tend to ask, you may anticipate them ahead of time.

Enter and expand new markets.

Technographics may reveal potential overlap you weren’t aware of before. Assume you spent a long time working in one industry and then discovered that the same technological platform is also used in another, completely unrelated sector. It would appear natural for you to look into possibilities since it makes sense.

Gain a competitive advantage.

Technographic data may help you catch up with the competition in today’s noisy environment. More profound knowledge of your target consumers’ technology stack can help you deliver a more personalized, frictionless sales process that you couldn’t otherwise offer.

Improving marketing messaging.

You can produce highly targeted marketing messaging that your audience identifies with if you have a thorough knowledge of your prospects and customers. Instead of making expansive claims or using broad phrases about the types of goods a prospect purchases, you may get more specific in terms of their experiences and pain spots. As a result, you’ll see improved marketing conversions.

Geographic Segmentation

The most basic type of market segmentation is geographic segmentation, which may be the simplest to understand. However, there are still a lot of applications for it that firms never consider.

Depending on your needs as a business, the size of the area you target should vary. On average, the larger the company, the bigger the places you’ll be targeting. After all, targeting each postcode separately wasn’t cost-effective when many more people might benefit from your content.

In total, six factors have to be considered while geographic segmentation is implemented:

• Location (country, state, city, ZIP code)
• Climate and season
• Cultural preferences
• Population type and density (urban, suburban, exurban, or rural)

What’s excellent about Geographic Segmentation is:

• Easy to implement – requires fewer data points.
• Higher product relevancy – which improves user experience and builds trust.
• Improved advertising effectiveness – which lowers customer acquisition costs.

Demographic Segmentation

Demographic segmentation is the process of classifying buyers or end-users by measurable characteristics. Age, location, education, gender, profession, and marital status are just a few examples of such traits. This information is usually easy to come by. Most people provide their demographic data on their social media profiles openly.

There are frequently numerous stakeholders involved in the sales process at any firm. Consequently, there will likely be stakeholders with various demographic characteristics for each organization that matches your sought-after firmographic profile.

The first step in demographic segmentation is to figure out your target buyer’s firmographic profile. You can then find the demographics of specific buyers at that business from there. Many stakeholders may be involved in technology procurement decisions depending on the company’s size.

Begin by detailing the demographic characteristics of your decision-makers, influencers, and end-users. You may then target those people with customized communication through demographic segmentation.

Market segmentation may be as simple as targeting recently married, female C-suite executives in the Bay Area with an Instagram ad campaign or correspondence to 25-35-year-old engineering students on the East Coast.

Behavioral Segmentation

Behavioral segmentation is a marketing method that categorizes consumers into segments based on their behaviors when interacting with a firm or website.

Customers can be grouped in a variety of ways. For example, you might want to group them by:

• Attitude towards your brand, product, or service,
• How they use or interact with your app, website, or product,
• Overall understanding and knowledge of your brand, application, product, service,
• Purchasing tendencies, such as on buying discounted items or on special occasions.

Targeting customers based on behavioral data or non-traditional demographic and geographic segmentation methods extend marketing campaigns’ effectiveness.

At the very least, behavioral segmentation provides marketers and company owners with a more thorough knowledge of their target audience, allowing them to customize products or services to fit specific customer requirements.

The benefits of behavioral segmentation are:

• Identifies the most engaged users – so you can focus on those most likely to make a purchase.
• Improves messaging accuracy – so you can optimize your advertising budget and reduce customer acquisition costs.
• Provides refined personalized experiences – to offer better customer experiences.
• Builds brand loyalty – to help retain your client and build a community of evangelists to attract even more customers.

Psychographic Segmentation

Another method for organizing prospects and customers is psychographic segmentation. The following are some examples of psychological characteristics:

• Personality traits

Data from your customer’s personalities can be used to supplement demographic information to provide a more comprehensive picture of your potential clients and their buying practices. This allows you to develop more effective messaging and anticipate your prospects’ requirements more accurately.

Today, virtually all users’ online activities are monitored and categorized. You may obtain insights about your target audience by utilizing this data. Simply “liking” a few Facebook pages, for example, might reveal your political affiliation, family life, personal interests, religious beliefs, and more.

The ability to develop targeted, emotive messaging to connect with and engage their audience on the right platforms at the right moment is a benefit of organizations that employ psychographic segmentation.

Target is one of the most famous brands to employ psychographic segmentation. Their researchers noticed a few essential purchasing behaviors shared by pregnant women, such as stocking up on more supplements early in their pregnancy, buying unscented lotion in their second trimester, and so on. Once they established these trends, Target monitored other consumers making similar purchases and began sending tailored advertising their way.

As Target did above, brands used to be restricted to obtaining psychographic data from their purchasing or through lengthy questionnaires. Thanks to big data, several psychographic segmentation tools are available today, allowing you to access this information immediately.

How Sales and Marketing Teams Can Use Target Markets

Segmentation poses several advantages for salespeople. When conducting most sales process phases, you get a leg up if you know who will be most receptive to your product or service.

One of the most important reasons for this is that effective segmentation might significantly help prospecting. Suppose your SDRs have a good understanding of which sort of consumers are interested in your product. In that case, cold leads can become a little warmer – allowing those reps to make more thoughtfully planned use of your sales messaging when interacting with prospects.

Beyond that, segmentation may also assist with lead qualification. Knowing whether a prospect fulfills the requirements of a high-converting category gives reps an early advantage during that process.

You need a method for identifying a prospect who needs your product or service from one who doesn’t have the cognitive capabilities, where you are, or economic conditions to get anything out of it. Target market segmentation is the answer.

Target markets provide salespeople with the knowledge to break into new areas and sell successfully to them. Suppose you’re not keeping up with any developing markets that require your product or service. In that case, you may run into trouble regarding your sales potential and miss out on highly lucrative business possibilities.

One of the most basic principles of practical sales efforts is to understand your target markets inside and out. If you don’t conduct thorough research, pursue, and improve your knowledge of your target markets, you’re missing out on sales and putting yourself in a bind with your business potential.

Target Market FAQs

A target market is a specific group of people or businesses that a company aims to sell its products or services to, based on shared characteristics, needs, or interests.

Companies determine their target market by researching and analyzing factors like their niche, the preferences of their current customers, market trends, and competitors. The goal is to identify the group most likely to purchase the company's offerings.

The primary target market is crucial because it's the main group of consumers or businesses that a company focuses its marketing and sales efforts on. This group represents the largest potential customer base and is most likely to buy the product or service.

Yes, businesses can segment their target markets based on various criteria, including demographic, geographic, psychographic, behavioral, and firmographic. Each type focuses on different characteristics, such as age, location, lifestyle, buying behavior, or company specifics.

A targeted market segment is a subgroup within the larger market that shares specific characteristics or needs. Companies identify these segments through research and analysis and then tailor their marketing strategies to appeal to this group.

The two primary activities businesses use to reach their target market are demand generation and lead generation. Demand generation educates and informs potential customers, while lead generation captures potential customers during their decision-making process.

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Top 5 Target Market Profile Templates with Samples and Examples

Hanisha Kapoor

How often do you clean your spam folder of promotional offers from companies? Or how often do you mark their emails with the star icon to view their amazing deals? We often discard items that do not belong to us and keep what serves our purpose.

Are you also afraid that your newsletters might be going to the spam folder and then getting trashed? It’s time you looked into your customers’ data to ensure that your products and services resonate with them. You may have an interesting product or an out of the box newsletter, but if it is not hitting your target market then your effort is mere waste.

Thus, it is imperative that you dive deep into your user persona profile and identify a target market that helps you strike the right chord. Figure out your target market by demographics, interest, choices, purpose, etc. to show them exactly what they need.

Target Market Profile Templates to Sell Your Products

SlideTeam brings you a collection of content-ready and custom-made Target Market Profile PPT Templates to filter, focus and, engage your customers. Incorporate these actionable PPT Slides to develop and implement successful marketing strategies, campaigns, and more. These PowerPoint Layouts are easy to use and help you find your ideal customer.

Browse the collection below to target specific customers, with whom you have the best chance of striking a deal.

Let’s begin!

Template 1: Target Market Profile PPT Template

This is a predesigned PPT Template showcasing a target market profile with description. Use this professional and appealing PowerPoint Slide to outline key characteristics, preferences, and behaviors of the group of consumers who are most likely to purchase from your company. Deploy this content-ready PowerPoint Diagram to create a detailed profile of your ideal customers. Download now!

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Template 2: Competitive Landscape Target Market PowerPoint Slide

Want to know your customer better? Grab this actionable PowerPoint Template to get a better understanding of you who you are serving. Use this ready-made PowerPoint Slide to know the characteristics of your target market, and outline marketing plans that resonate with your customers. This is a top-notch PPT Diagram to increase your company’s engagement and conversion rates. Download now!

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Template 3: Target Market Profile PPT Template

Here is another PowerPoint Template to help you create a comprehensive target market profile for your organization. Use this preset to understand the needs and preferences of your target market. Grab this flexible PowerPoint Slide to develop products or services that better meet your customers' needs. It is a professional and appealing PowerPoint Template to help you showcase an elaborate description on your target audience. Get it now!

Download this slide

Template 4: Target Market Profile PowerPoint Slide

Creating a target market profile? Deploy this ready-made PowerPoint Template to build a compelling buyer persona. It is a predesigned PowerPoint Slide showcasing steps to develop an easy-to-understand target market profile. This PPT Design exhibits some questions which you can use to identify your ideal customers. It also provides you with some space to help you add answers. Grab this flexible PPT Diagram to gather all essential information about your audience and use it to your great advantage. Download now!

Template 5: Demographic Profile of Target Market PowerPoint Template

This is another content-ready PowerPoint Template to help you comprehend your customers better and make informed decisions about your products, services, and marketing efforts. This predesigned PowerPoint Slide allows you to outline a perfect demographic profile of your target market to be more efficient with your resources and marketing efforts, all of which lead to increased profitability. Grab this ready to use PPT Slide to improve your bottom line and grow your business.

TURN CUSTOMERS INTO BRAND ADVOCATES

Before you begin to spend your energy, time, and resources on product development, marketing campaigns, customer service, sales, or anything else, you must develop an elaborate target market profile. It is essential that you focus on your customers and build strong relationship to transform your audience into brand advocates. Use SlideTeam’s content-ready and custom-made target market profile PPT Templates to understand the needs and preferences of your audience. Incorporate above Templates or download these with a click here .

FAQs on Target Market Profile

What is the profile of a target market.

A target market is a group of consumers or organizations that a company or business is aiming to sell its products or services to. Typically, a target market is segregated on demographic, psychographic, and behavioral characteristics that are used to identify and understand the needs, preferences, and behaviors of the target market.

Creating the profile of a target market helps companies develop marketing strategies that are tailored to specific needs and preferences of their target audience. By understanding the characteristics of their target market, companies can create more effective marketing messages, design products and services that meet the needs of customers, and make better decisions on allocating resources for advertising and promotion.

What are the four types of target market?

The four types of target markets are:

Geographic: This type of target market is based on geographic location, such as a country, region, city, or neighborhood. Companies may focus on geographic areas based on factors such as population density, climate, culture, and language.

Demographic: This type of target market is based on demographics such as age, gender, income, education, occupation, and family size. Companies may target specific demographic groups based on their purchasing habits, preferences, and needs.

Psychographic : This type of target market is based on psychographic characteristics such as personality traits, values, attitudes, interests, and lifestyles. Companies may target specific psychographic groups based on their preferences and behavior patterns.

Behavioral: This type of target market is based on consumer behavior, such as purchasing habits, brand loyalty, product usage, and decision-making processes. Companies may target specific behavioral groups based on their buying patterns, product usage, and decision-making processes.

By understanding the characteristics of their target market, companies can develop more effective marketing strategies and make better decisions about how to allocate resources for advertising and promotion.

How do you write a target market profile?

Here are the steps to write a target market profile:

Identify your product or service: Start by defining what your product or service is and what it offers. This will help you understand what kind of customer will benefit from your product or service.

Research your market : Conduct market research to identify the demographics, psychographics, and behaviors of your potential customers. This will help you create a comprehensive target market profile.

Define demographics : Define the age, gender, income, education level, occupation, and geographic location of your target market. This helps you identify the specific group of people who are most likely to buy your product or service.

Define psychographics : Define personality traits, values, attitudes, interests, and lifestyles of your target market. This helps understand the emotional and psychological factors that influence their purchasing decisions.

Define behaviors : Define purchasing habits, brand loyalty, product usage, and decision-making processes of your target market. This helps you understand how your target market interacts with your product or service.

Create a summary: Summarize the key characteristics of your target market in a concise statement. This summary should include details about your target market, such as age, gender, income, location, personality traits, values, purchasing habits, and more.

Revise and refine: Revise and refine your target market profile, based on new information or changes in your business strategy.

Writing a target market profile requires careful research and analysis. By creating a detailed profile of your target market, you can tailor your marketing efforts to specific needs and preferences of your customers and improve your chances of success.

What are the target market strategies?

There are many target market strategies that businesses can use to reach and engage their ideal customers. Here are some common strategies:

Differentiation strategy : This strategy involves targeting a specific market segment with unique products or services that set the business apart from competitors. The goal is to create a competitive advantage by offering something that cannot be found elsewhere.

Cost leadership strategy : This strategy involves targeting price-sensitive customers by offering lower-priced products or services than competitors. The goal is to gain a larger market share by providing products or services that are more affordable.

Niche strategy : This strategy involves targeting a small, specialized market segment with a unique product or service that meets specific needs. The goal is to establish a strong position in a specific market niche.

Segmentation strategy : This strategy involves dividing the target market into smaller subgroups based on common characteristics, such as age, gender, income, or interests. The goal is to tailor marketing messages and product offerings to each subgroup for more effective engagement.

Mass marketing strategy : This strategy involves targeting a broad audience with a single marketing message and product offering. The goal is to reach as many potential customers as possible and establish a strong brand identity.

Concentration strategy: This strategy involves targeting a single market segment with a focused product or service offering. The goal is to establish a strong position in a specific market segment.

Businesses can use one or more of these target market strategies to reach their ideal customers and grow their business. The strategy chosen will depend on the business goals, the characteristics of the target market, and the industry competition.

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What Is a Target Market?

• Defining a Product's Target Market
• 4 Target Markets

Why Are Target Markets Important?

What are market segments, target market and product sales.

• Target Market FAQs

The Bottom Line

• Marketing Essentials

Target Market: Definition, Purpose, Examples, Market Segments

Investopedia / Mira Norian

A target market is a group of people that have been identified as the most likely potential customers for a product because of their shared characteristics, such as age, income, and lifestyle.

Identifying the target market is a key part of the decision-making process when a company designs, packages, and advertises its product.

Key Takeaways

• A target market is a group of customers with shared demographics who have been identified as the most likely buyers of a company's product or service.
• Identifying the target market is important in the development and implementation of a successful marketing plan for any new product.
• The target market also can inform a product's specifications, packaging, and distribution.

How Do I Define My Product's Target Market?

Part of creating a new product is envisioning the consumers who will want it.

A new product must satisfy a need or solve a problem, or both. That need or problem is probably not universal unless it reaches the level of indoor plumbing. More likely, it is needed by a subset of consumers, such as environmentally-conscious vegetarians, or science nerds, or outdoor enthusiasts. It may appeal to a teenager or a middle-aged professional, a bargain-hunter or a snob.

Envisioning your likely target market is part of the process of creating and refining a product, and informs decisions about its packaging, marketing, and placement.

What Are the 4 Target Markets?

Market researchers use activity, interest, and opinion (AIO) surveys to construct psychographic profiles of their target customers. Marketing professionals divide consumers into four major segments:

Demographic: These are the main characteristics that define your target market. Everyone can be identified as belonging to a specific age group, income level, gender, occupation, and education level.

Geographic: This segment is increasingly relevant in the era of globalization. Regional preferences need to be taken into account.

Psychographic: This segment goes beyond the basics of demographics to consider lifestyle, attitudes, interests, and values.

Behavioral: This is the one segment that relies on research into the decisions of a company's current customers. New products may be introduced based on research into the proven appeal of past products.

What Is an Example of a Target Market?

Each of the four target markets can be used to consider who the customer for a new product is.

For example, there are an estimated 100,000 Italian restaurants in the U.S. Clearly, they have enormous appeal.

But a corner pizza joint might appeal mostly, although by no means entirely, to a younger and more budget-conscious consumer, while an old-fashioned white tablecloth place might be dominated by older folks and families who live in the neighborhood. Meanwhile, a newer place down the street might cater to an upscale and trend-conscious crowd who will travel a good distance for the restaurant's innovative menu and fancy wine list.

In each successful case, a savvy business person has consciously considered the ideal target market for the restaurant and has tweaked the menu, decor, and advertising strategy to appeal to that market.

Few products today are designed to appeal to absolutely everyone. The Aveda Rosemary Mint Bath Bar, available for $26 a bar at Aveda beauty stores, is marketed to the upscale and eco-conscious woman who will pay extra for quality. Cle de Peau Beaute Synactif Soap retails for $110 a bar and is marketed to wealthy, fashion-conscious women who are willing to pay a premium for a luxury product. An eight-pack of Dial soap costs $12 at CVS, and it is known to get the job done.

Part of the success of selling a good or service is knowing to whom it will appeal and who will ultimately buy it. Its user base can grow over time through additional marketing, advertising, and word of mouth.

That's why businesses spend a lot of time and money in defining their initial target markets, and why they follow through with special offers, social media campaigns , and specialized advertising.

Dividing a target market into segments means grouping the population according to the key characteristics that drive their spending decisions. Some of these are gender, age, income level, race, education level, religion, marital status, and geographic location.

Consumers with the same demographics tend to value the same products and services, which is why narrowing down the segments is one of the most important factors in determining target markets.

For example, people who fall into a higher income bracket may be more likely to buy specialty coffee from Starbucks instead of Dunkin' Donuts. The parent companies of both of these brands need to know that in order to decide where to locate their stores, where to stock their products, and where to advertise their brand.

A business may have more than one target market—a primary target market, which is the main focus, and a secondary target market, which is smaller but has growth potential. Toy commercials are targeted directly to children. Their parents are the secondary market.

Identifying the target market is an essential part of a product development plan, along with manufacturing, distribution, price, and promotion planning. The target market determines significant factors about the product itself. A company may tweak certain aspects of a product, such as the amount of sugar in a soft drink or the style of the packaging, so that it appeals more to consumers in its target group.

As a company’s product sales grow, it may expand its target market internationally. International expansion allows a company to reach a broader subset of its target market in other regions of the world.

In addition to international expansion, a company may find its domestic target market expands as its products gain more traction in the marketplace. Expanding a product's target market is a revenue opportunity worth pursuing.

How Detailed Should a Target Market Be?

It depends. Broadly speaking, a product may be designed for a mass market or a niche market, and a niche market can be a very small group indeed, especially in a product's early introductory phase.

Some carbonated beverages aim for a practically universal market. Coca-Cola had to branch out to 200 markets abroad to continue growing its customer base. Gatorade is owned by Pepsi Cola, but the brand is positioned as a drink for athletes. The soda brand Poppi, which is branded as a healthy, sparkling, prebiotic soda with real fruit juice, gut health, and immunity benefits, is clearly aimed at a younger, healthier, and more trend-conscious target market.

Consider a casual apparel company that is working to build its distribution channels abroad. In order to determine where its apparel will be most successful, it conducts some research to identify its primary target market. It discovers that the people most likely to buy their products are middle-class women between the ages of 35 and 55 who live in cold climates.

It's reasonable for the company to focus its advertising efforts on northern European websites that have a strong female audience.

But first, the company may consider how its apparel can be most attractive to that target market. It may revise its styles and colors and tweak its advertising strategy to optimize its appeal to this new prospective market.

What Is the Purpose of a Target Market?

A target market defines a product as well as vice versa.

Once a target market is identified, it can influence a product's design, packaging, price, promotion, and distribution.

A product aimed at men won't be packaged in pink plastic. A luxury cosmetic won't be sold in a pharmacy. An expensive pair of shoes comes with a branded cloth drawstring bag as well as a shoebox. All of those factors are signals to the target audience that they have found the right product.

Identifying the target market is part of the process of creating and refining a new product.

A target market can be translated into a profile of the consumer to whom a product is most likely to appeal. The profile considers four main characteristics of that person: demographic, geographic, psychographic, and behavioral.

National Geographic. " How Italian Cuisine Became as American as Apple Pie ."

Aveda. " Rosemary Mint Bath Bar ."

Cle de Peau. " Synactif Soap ."

CVS. " Dial Antibacterial Deodorant Bar Soap, White ."

Coca-Cola Australia. " Coca-Cola: From Start-Up to Global Enterprise ."

Pepsico Partners. " Gatorade ."

DrinkPoppi. " Home ."

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6 Real-Life Target Audience Examples to Help You Define Your Own (B2B and B2C)

Target audience research allows you to better understand your potential customer(s) and their underlying pain points.

The more you drill down into your high-value audience groups through strategic market segmentation, the closer you are to your next sale.

Learn the ins and outs of target marketing with plenty of examples to inform your strategy.

What Is a Target Audience?

How a target audience differs from a buyer persona, how psychographic and demographic data informs marketing campaigns.

• How To Analyze and Define Your Target Audience

Do Target Audiences Vary by Channel?

3 b2b target audience examples.

• 3 B2C Target Audience Examples

A target audience is a group of consumers within a predefined target market that has been identified as the best recipients for a particular marketing message. And a target market broadly describes B2C or B2B consumers who care about your product or service and, under the right conditions, are most likely to spend money with your company.

An audience is a segment within that market.

For example, the target market for an online bookkeeping tool might include businesses with over $500K in annual revenue.

So a target audience profile for our bookkeeping program might be technology stakeholders with influence on decision-makers at companies that haven’t reviewed their accounting software needs in over two years. It’s much more specific than our target market, which is important because we can craft content marketing collateral that speaks directly to the challenges and needs of this influential group.

To create effective messaging within your marketing campaigns, you first need to define your target audience.

When marketers try to appeal to the broadest possible audience for their products and services, they often end up feeling exhausted without much to show for their efforts. Their messaging seems inauthentic and doesn’t really resonate with anyone in particular.

To create effective messaging within your marketing campaigns, you first need to define your target audience. Doing so will help you engage key decision-makers and eventually convert them into loyal customers.

At this point, you might be asking, “Isn’t that just a buyer persona?” And while the two concepts are similar, they are distinct enough to warrant further discussion.

A buyer persona is a fictional character who represents one of your ideal customers . They have names, occupations, likes and dislikes, as well as challenges and ambitions.

While target audiences are valuable tools for many types of content marketing campaigns, buyer personas tend to be more useful in a B2B context, because they focus on challenges and business information. For example, a B2C company that sells protein bars would not need to create multiple personas, because people from many backgrounds and with varying job titles might purchase their products.

In a B2B context, targeting personas can be extremely valuable, especially when employing content marketing strategies. A SaaS company might create personas for each stakeholder involved in the buying process, for instance. An HR persona might be interested in blog content that addresses common pain points, while a CFO persona would be more interested in white papers with lots of data.

Personas aren’t entirely without value to B2C marketers, however. They can serve as useful guides when crafting messages to engage and inform consumers.

A persona typically includes:

• Personal information: Name, age and geographic location.
• Content preferences: Favorite channels, content formats, tone and style.
• Business background information: Job title, level of influence in decision making processes.
• Objectives: Measurable goals related to the persona’s job.
• Challenges: Frustrations and pain points standing in the way of the persona’s goals.

Your target audiences should be informed by both demographic and psychographic information. The former category describes your intended audience on a superficial level, while the latter describes their motivations.

• Demographics may include cursory information such as gender, age, income and marital status.
• Psychographics include personal interests, attitudes, values, desires and specific behaviors.

When defining and targeting an audience, demographics will only get you so far. For example, if you’re promoting a B2B SaaS solution, your specific audience may be made up of men and women ages 35-49 who earn more than $100,000 annually. That’s all good information to have, but it applies to too broad of a cohort.

Psychographic data for this specific audience could include: worrying about lost resources throughout a supply chain, wanting to eliminate redundancies, or being skeptical of flashy new technology.

Combined, demographic and psychographic information can help you fine-tune your audience targeting goals.

Combined, demographic and psychographic information can help you fine-tune your audience targeting goals. The challenge is where to find this data. Psychographic research may include interviewing existing clients, conducting polls and analyzing your site traffic.

How to Analyze and Define Your Target Audience

Defining the target audience for a particular marketing campaign requires data. Unfortunately, there isn’t a crystal ball that can tell you how to adjust your messages to bring in the right audience. But that’s not to say you can’t trust your gut.

You know your business better than anyone, so combine that experience with hard data to generate a market segment and target audience that is characteristically human, and also strategically defined by scientifically gathered data.

A Three-Step Approach To Defining A Target Audience

1. Conduct target customer research

Your business plan , content marketing strategy, professional experience and prior knowledge of your target customers will lay the foundation for your research. Compile all of your existing intelligence on your target market, and look for opportunities to learn more about it. For example, you might know that most of your customers are senior-level business people, but you may not know if they all have the same job title, or if they all consume content through the same channels.

To uncover key audience insights, use Google Analytics to drill down into your site traffic and perform a deep audience analysis. Custom audience reports can show you demographic and psychographic data, geographic locations as well as the types of technology your site visitors use.

2. Analyze the market

Once you know a little more about your target customers and have compared that data with your business process or goals, it’s time to get some context. Not only are you attempting to place the right messages in front of the right people at the right time, but you’re also competing with potentially thousands of other messages.

Review your competitors’ marketing efforts and business plans to better understand what you’re up against. Likewise, you’ll want to be aware of any other campaigns your business is currently running, as you don’t want to cannibalize your share of audience attention.

3. Define the audience

With hard data in tow and a thorough understanding of your audience’s interests, challenges and needs, it’s time to create a concise target audience to which you can direct your content marketing efforts.

Ask yourself these questions as you work to define your target audience:

• What problems does your product or service solve?
• Which demographic characteristics influence the decision-making process?
• Which psychographic traits impact content consumption?
• How does your audience prefer to engage with brands similar to yours?
• Is your audience segment large enough?

That last question is particularly important, because it will prevent you from sinking resources into ultra-niche campaigns with low ROI. Niche marketing is certainly a useful tactic, but your target audiences should represent a group large enough to reach through social and organic channels.

Knowing your intended audience is only one half of the equation. The next step in the target audience analysis process is to determine where this group consumes content so you can develop an actionable marketing strategy.

Depending on the demographic and psychographic data you’ve collected, some channels will be more effective at engaging your intended audience than others. For instance, some decision-makers in a market segment may be more likely to open an email than to click on a social media ad.

Within channels, a specific audience may prefer unique platforms. B2B buyers are more inclined to seek out information on LinkedIn than Instagram, for example.

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(Keep in mind the following custom audiences are meant to inform specific campaign messages! These companies may have different audience segments for other targeting efforts. Each example is based on a real client I’ve worked with.)

1. Bookkeeping SaaS Solution

Key demographics

• Age range: 35-49.
• Gender: 65% male, 35% female.
• Common job titles: Head of Digital, Senior Accountant, Chief Financial Officer.

Key psychographics

• Values job security.
• Likes to review all the data before making a decision.
• Striving for a better work-life balance.
• Skeptical of solutions that promise to solve all their problems.
• Their current digital solution is showing its age.
• Current lack of third-party integration is slowing down internal processes.
• Boss/shareholder demands are making work stressful.

Preferred channels

• Email for first contact, then phone conversations.
• Browses social media platforms like LinkedIn , mostly looking for news.

Preferred content types

• Data-rich white papers.
• Case studies.

2. Business Travel Company

• Age range: 30-55.
• Gender: 70% female, 30% male.
• Common job titles: Procurement Officer, Travel Buyer, Supplier Relations Expert.
• Values relationships when working with suppliers.
• Dislikes working on repetitive, mundane tasks.
• Is wary of handing off responsibilities to a third party.
• Suppliers fail to deliver on promised rates.
• Doesn’t have enough data to make informed decisions.
• Not familiar with ground-level travel concerns.
• Looks for answers via organic search.
• Communicates with other procurement professionals on social media platforms.
• Easily digestible blog posts.

3. Facility Security Services

• Age range: 45-60.
• Gender: 80% male, 20% female.
• Common job titles: Facility Manager, Head of Security.
• Doesn’t like drawn-out negotiations.
• Likes to be prepared for everything; gets nervous when things are uncertain.
• Prefers to get pitches from two or three companies before making a decision.
• Needs to save costs, but isn’t willing to sacrifice quality of service.
• Needs a third-party supplier with technology integrations.
• Email for marketing materials.
• Blogs and news sites for industry trends.
• Data-rich infographics.
• Email newsletters.

B2C Target Audience Examples

4. athletic shoes.

• Age range: 18-29
• Gender: 60% male, 40% female
• Wants to look stylish, but doesn’t like to follow trends.
• Looks up to sports figures.
• Strongly values friendships and community.
• Loyal to one or two athletic brands.
• Finding athletic footwear that is both stylish and comfortable.
• Loves the look of designer sneakers, but can’t afford them.
• Follows athletes and influencers on social media.
• Watches sponsored events on YouTube.
• Looks for exercise tips on Google.
• Social media posts.
• Image-rich articles.

5. Organic Protein Bars

• Age range: 18-35.
• Gender: 50% female, 50% male.
• Strives to eat food that is nutritious and sustainable, but isn’t always successful.
• Loves to hang out with friends in nature.
• Feels loyalty toward brands with values similar to their own.
• Finds it difficult to eat healthy food when they’re busy.
• Has a limited food budget.
• Needs a protein source that is compact and easy to transport.
• Follows nature photography accounts on Instagram.
• Watches supplement reviews on YouTube.
• Follows health gurus on Twitter.
• Event marketing.

6. Credit Union Mortgage Products

• Age range: 25-39.
• Gender: 50% male, 50% female.
• Enjoys spending time with friends and family at home.
• Tries to spend their money wisely, but isn’t always sure how to do that.
• Craves stability, but fears another economic recession.
• Feels anxious every time they think about having a mortgage.
• Is thinking about mortgages for the first time ever.
• Unclear on the difference between a bank and a credit union.
• Reads online news sites.
• Downloads how-to guides online.
• Watches home-hunting videos on YouTube.

When you have well-defined, custom audiences informed by strong research, you can stop waiting for buyers to stumble upon your brand and start actively pursuing them with precise messaging.

Editor’s note: Updated November 2021.

Michael O'Neill

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Mike O'Neill is a writer, editor and content manager in Chicago. When he's not keeping a close eye on Brafton's editorial content, he's auditioning to narrate the next Ken Burns documentary. All buzzwords are his own.

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Customer Profile Template And Examples

Published: Jun 23, 2023, 1:26pm

Table of Contents

What is a customer profile, why customer profiles are important, how to create a customer profile in 4 steps, b2b customer profile examples, b2c customer profile example, frequently asked questions (faqs).

Compiling a customer profile can help you understand your target market more accurately, and should be updated on a regular basis. By gathering information on your ideal customers, you can tailor your marketing efforts and deliver more personalized experiences. We’ll give you a comprehensive guide to customer profiles, including templates and examples for both B2B and B2C businesses. Learn why customer profiles are important, how to create them, and find inspiration for your own profiles.

Download template here

A customer profile is a detailed description of your ideal customer. It provides demographic information, such as age, gender, income, education and location, as well as customer behaviors and interests. By creating a customer profile, businesses can better understand their target audience and tailor their marketing efforts to meet their needs.

Demographic Information

Demographic information includes details about a customer’s age, gender, income, education and location. This information can help businesses understand who their target audience is and what their needs may be.

Customer Behaviors and Interests

In addition to demographic information, a customer profile should also include details about customer behaviors and interests. This can include information about their shopping habits, social media use, hobbies and other interests. Understanding these behaviors and interests can help businesses better target their marketing efforts and create more effective campaigns.

Knowing your customers is key to any business’s success. Customer profiles allow you to gain insights into the needs, preferences and behaviors of your target audience. Here are some reasons why customer profiles are important:

Better Targeting

Customer profiles enable you to target your marketing and sales efforts more effectively. By understanding your customers’ needs, you can tailor your messages and offers to resonate with them and increase the chances of conversion. When you know what a customer likes, you can create products best aligned with their needs and desires.

Improved Customer Service

Customer profiles help you understand your customers’ pain points, allowing you to provide better customer service. You can address their concerns and issues proactively and enhance their overall experience with your brand.

Higher Retention

When you understand your customers’ needs, you can create products and services that meet those needs, increasing the likelihood of customer retention. You can also use customer profiles to identify customers who are at risk of churn and take steps to retain them.

Data-Driven Decisions

Customer profiles provide you with data that can inform your business decisions. By analyzing customer behavior and preferences, you can identify trends and make data-driven decisions about product development, marketing strategy and customer service.

Competitive Advantage

Customer profiles give you a competitive advantage by enabling you to provide a more personalized and relevant customer experience. This can help you stand out from your competitors and build customer loyalty.

Crafting a customer profile is vital for a successful marketing approach. Knowing exactly what a customer wants and needs can help you tailor your products, marketing and services. You can have multiple customer profiles—many businesses choose to have one for each sector—and you should update these regularly, especially as market conditions and customer life cycles change. These steps will help you set up a customer profile.

Collect Customer Data

Analyze customer data, identify customer segments, share customer data.

Having customer profiles is crucial for both B2B and B2C. Learn about your ideal customer, so you can create marketing and sales campaigns that work for them. Use this B2B customer profile template to craft your own, and consider adding information you gather below.

Company Information

Include details such as company size, industry, location and annual revenue.

Company: Madison Corporation

Company Size: Large corporation with 500-1,000 employees

Industry: Technology and software

Location: Madison, WI

Annual Revenue: $1 billion

Madison Corporation is a large technology and software company based in Madison, WI. The company is committed to supporting local businesses and the Wisconsin economy by sourcing materials and services from local vendors. They are interested in purchasing Wisconsin-made products for employee gifts and corporate events.

Decision-Makers and Influencers

Identify the individuals who will be involved in the purchasing process, including decision-makers and influencers.

Decision-Makers

Mary Johnson, Owner of Johnson’s Gifts – Mary is responsible for making purchasing decisions for her gift shop. She is interested in carrying Wisconsin-made products that are unique and of high-quality, and that resonate with her customer base.

John Peterson, CEO of Madison Corporation – John has the final say on all purchasing decisions for Madison Corporation. He is interested in purchasing Wisconsin-made products for employee gifts and corporate events, and is looking for products that align with the company’s values and brand.

Influencers

Sarah Smith, Marketing Manager of Wisconsin Tourism Board – Sarah is responsible for promoting Wisconsin tourism and is always on the lookout for new and exciting Wisconsin-made products to feature in her marketing campaigns. She has a strong influence over tourists and visitors to the state.

Tom Jackson, Local Business Advocate – Tom is a local business advocate who works to promote local businesses and the Wisconsin economy. He has a strong influence over purchasing decisions made by local businesses and corporations, and is interested in promoting Wisconsin-made products to his network.

Pain Points and Challenges

Understand the pain points and challenges your target customers face, and how your product or service can address these issues.

Difficulty finding authentic and high-quality Wisconsin-made products that are not mass-produced or sold at big-box stores.

Navigating the crowded marketplace of Wisconsin-themed souvenirs and gifts, and finding products that are unique and showcase the state’s culture and heritage.

The desire to support local businesses and the Wisconsin economy, but not knowing where to find or how to identify Wisconsin-made products.

How Stapleton Badger Co.’s products can address these issues:

By focusing on producing handcrafted and unique Wisconsin-made products, Stapleton Badger Co. can provide customers with authentic and high-quality products that cannot be found at big-box stores.

Stapleton Badger Co. can differentiate itself from the crowded marketplace of Wisconsin-themed souvenirs and gifts by offering products that are both unique and of high-quality, and that showcase the state’s culture and heritage in a way that resonates with customers.

By marketing itself as a Wisconsin-based business that supports the local economy, Stapleton Badger Co. can appeal to customers who want to support local businesses and the Wisconsin economy. This messaging can be reinforced through the use of Wisconsin-sourced materials and a transparent supply chain that emphasizes the company’s commitment to local sourcing and manufacturing.

Goals and Objectives

Analyze what your customers anticipate from your product or service and how it can bring them closer to their goals.

Supporting the local economy: Madison Corporation is committed to supporting local businesses and the Wisconsin economy. By purchasing Wisconsin-made products from Stapleton Badger Co., the company can help support local artisans and manufacturers, and create jobs in Wisconsin.

Gifting high-quality and unique products: Madison Corporation is interested in purchasing Wisconsin-made products for employee gifts and corporate events. By purchasing products from Stapleton Badger Co., the company can provide employees and clients with high-quality and unique gifts that showcase Wisconsin’s culture and heritage.

Building a positive reputation: Madison Corporation values its reputation as a responsible and sustainable business. By purchasing Wisconsin-made products from Stapleton Badger Co., the company can demonstrate its commitment to supporting local businesses and the Wisconsin economy, and build a positive reputation with customers and stakeholders.

Purchasing Habits and Criteria

Find out how your target customers make purchasing decisions and what criteria they use to evaluate potential vendors.

Researching products and vendors online: Customers are increasingly using the internet to research products and vendors before making a purchase. They may look for reviews, ratings and social media presence to assess the credibility and quality of a vendor.

Shopping locally: Customers who prioritize supporting local businesses may prefer to shop at local stores or markets to find Wisconsin-made products. They may also look for locally sourced materials and transparent supply chains when evaluating vendors.

Attending local events and festivals: Customers may attend local events and festivals to discover new vendors and products. These events may also provide an opportunity for customers to meet the makers and learn more about the production process.

Quality and authenticity of products: Customers value high-quality and authentic Wisconsin-made products that are unique and well-crafted. They may evaluate vendors based on the quality of their products, materials used and the production process.

Reputation and credibility of vendor: Customers may evaluate vendors based on their reputation and credibility within the community. They may look for vendors who have positive reviews, strong social media presence, and a transparent supply chain.

Price and value for money: Customers may compare prices and value for money when evaluating vendors. They may be willing to pay a premium for high-quality and unique Wisconsin-made products, but also expect fair and transparent pricing.

Marketing and Sales Strategy

Outline a strategy to advertise and distribute your product or service to your intended customers, based on the information you have gathered about their characteristics and preferences.

Research and identify Madison Corporation’s needs and preferences: Before reaching out to Madison Corporation, Stapleton Badger Co. should research and identify the company’s needs and preferences for Wisconsin-made products. This can involve analyzing the company’s brand and values, and understanding the types of products that are typically used for employee gifts and corporate events.

Develop a customized product offering: Based on Madison Corporation’s needs and preferences, Stapleton Badger Co. should develop a customized product offering that aligns with the company’s brand and values. This can involve creating unique and high-quality products that showcase Wisconsin’s culture and heritage, such as custom-made home decor, accessories, and gifts.

Establish a sales pitch: Stapleton Badger Co. should establish a sales pitch that emphasizes the quality, authenticity, and uniqueness of its products, and how they can benefit Madison Corporation’s goals and objectives. This can include providing transparent information about the sourcing and production process, highlighting the positive impact on the local economy, and showcasing the products’ durability and craftsmanship.

Reach out to decision-makers and influencers: Stapleton Badger Co. should reach out to decision-makers and influencers at Madison Corporation, such as John Peterson, the CEO, and Tom Jackson, the local business advocate. This can involve sending customized emails or direct mail that showcase the products and explain their benefits, or arranging face-to-face meetings or calls to discuss the product offering and establish a long-term partnership.

Provide excellent customer service: Stapleton Badger Co. should prioritize providing excellent customer service to Madison Corporation, including timely and reliable deliveries, transparent communication, and flexible payment options. This can help establish trust and reliability and build a strong relationship between the two companies.

Knowing your target audience is key to making marketing campaigns that connect with people who might buy from you. In this section, we’ll provide an example of a B2C customer profile to help you get started, as well as information to consider when customizing your template.

When creating a B2C customer profile, start with demographic information, such as age, gender, income and location. This’ll help you work out who your customers are and what they want.

Demographics

Gender: Male and Female

Income: $50,000-$150,000 per year

Location: Primarily located in the Midwest region of the United States, with a focus on Wisconsin residents and visitors.

Stapleton Badger Co.’s target B2C customers are typically middle-aged and middle-class individuals who are interested in supporting local businesses and the Wisconsin economy. They may be homeowners, parents, or working professionals, and may have a strong interest in Wisconsin culture, heritage, and history.

Their income level suggests that they have disposable income to spend on high-quality and unique products. They may be willing to pay a premium for Wisconsin-made products that are handcrafted and authentic.

In addition to demographic information, consider your customers’ behaviors and interests. What motivates them to make purchases? What are their pain points and challenges? What types of media do they consume? Understanding these factors can help you tailor your marketing efforts to better reach and engage your target audience.

Interest in supporting local businesses: Stapleton Badger Co.’s B2C customers may be motivated by a desire to support local businesses and the Wisconsin economy. They may be more likely to purchase products that are locally-sourced and handcrafted, and that support local artisans and manufacturers.

Appreciation for Wisconsin culture and heritage: Many of Stapleton Badger Co.’s B2C customers may have a strong appreciation for Wisconsin’s culture and heritage, and may be interested in purchasing products that showcase the state’s unique history, traditions, and natural beauty.

Desire for high-quality and unique products: Stapleton Badger Co.’s B2C customers may value high-quality and unique products that stand out from mass-produced and generic items. They may be willing to pay a premium for products that are well-crafted, authentic, and distinctive.

Active on social media: Many of Stapleton Badger Co.’s B2C customers may be active on social media platforms like Facebook, Instagram, and Pinterest. They may use these platforms to discover new products and brands, and to share their experiences and recommendations with friends and family.

Psychographic Information

Consider psychographic information when creating a B2C customer profile. This includes personality traits, values and attitudes. Know what your audience wants and needs, then create messages that they’ll respond to and build loyalty to your brand.

Environmental and social consciousness: Many of Stapleton Badger Co.’s B2C customers may value environmental sustainability and social responsibility. They may be more likely to purchase products that are eco-friendly, locally sourced, and support local communities and artisans.

Appreciation for craftsmanship and authenticity: Stapleton Badger Co.’s B2C customers may appreciate the time, skill, and attention to detail that goes into handcrafted products. They may be more likely to purchase products that showcase the unique skills and techniques of local artisans, and that offer a sense of authenticity and heritage.

Nostalgia and sentimentality: Many of Stapleton Badger Co.’s B2C customers may have a sense of nostalgia and sentimentality for Wisconsin’s culture and heritage. They may be interested in purchasing products that evoke memories of childhood, family traditions, or experiences, and that help them feel connected to their roots.

Appreciation for quality and durability: Stapleton Badger Co.’s B2C customers may value high-quality and durable products that can withstand the test of time. They may be more likely to purchase products that are well made, with attention to detail and quality materials, and that offer good value for the price.

Bottom Line

Building a customer profile is a helpful resource for any company seeking to engage with its target customer. Acknowledging the demographic, behavioral and interest-based details of your customer base can result in the development of more productive marketing and sales efforts. Begin developing your own customer profiles by using the provided templates and examples.

How do I gather customer data for my profile?

You can gather customer data through surveys, customer feedback and analyzing customer behavior on your website and social media.

Can I have multiple customer profiles for different customer segments?

Yes, it’s common for businesses to have multiple customer profiles for different customer segments.

What are some common mistakes to avoid when creating a customer profile?

One common mistake is relying too heavily on assumptions instead of collecting and analyzing data. Another mistake is not regularly updating your customer profile as your target audience evolves.

How do I use a customer profile to improve marketing efforts?

When you’re sure of who your ideal customer is, you can tailor your messaging, content and offers to fit their desires and interests. This can lead to higher conversion rates and improved ROI on your marketing efforts.

What tools or resources are available to help create a customer profile?

There are many customer profiling tools available, ranging from free templates and worksheets to paid software solutions that help collect and analyze customer data. Some popular options include HubSpot, UpLead and ZoomInfo.

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Katherine Haan is a small business owner with nearly two decades of experience helping other business owners increase their incomes.

Business Plan Demographics – Defining a Target Market

Sorting through demographic information is one of the first steps in doing market research and competitive analysis. This is stuff you’ll need to know in order to prepare an effective business plan. Without this information, you, as a founder, don’t know if there is a sufficient market to support your business. You will also be starting off at a disadvantage when planning other aspects of your business.

**Note: this business plan demographics guide was written just before the Census Bureau changed its primary portal for data from the American FactFinder to Data.Census.Gov .

Download a free copy of the workbook used in this post

Complete the form below and click Submit . Upon email confirmation, the workbook will open in a new tab.

Keep in mind that this workbook is only designed to work with table S0201 , Selected Population Profile in the United States . Any other table might not be in the correct format.

About these posts

This series of posts was written to convey my take on how to write a business plan. My intent is to follow up with several more posts after this one.

I’m using the U.S. Small Business Administration (SBA) Plan your business guide as my outline ( link ). In true SpreadsheetsForBusiness.com fashion – I plan to include free downloadable spreadsheets where appropriate.

Rather than just recycling the same information you could find elsewhere, I’m going to take this journey with you. I’ll be building my own business plan as I write these posts. This is my first business plan, so you’ll be learning right along with me.

My business plan

My plan is based around a hypothetical business that will manufacture and market a hair regrowth product for men (and women, I suppose). The plan is to manufacture the product with all-natural ingredients.

What are business plan demographics?

Sorting through demographic data for your business’ potential customers is the first step in understanding what type of person (or business) might be interested in your product or service.

It can provide an unofficial ceiling to the number of customers you might expect. It’s from this information you can get into more detail about demand, market saturation, pricing, and so on.

Common demographic information includes:

• Marital status
• Employment status
• Geographic area

Why worry about business plan demographics?

Focusing on marketing to specific individuals helps you plan with clarity. The saying goes: “you can’t please all the people all the time.” By not trying to market to everyone a little bit, you can focus your efforts on creating a really good experience for some people.

Understanding your target demographics can help you determine if your target market is saturated. Read this post: CALCULATING MARKET SATURATION FOR YOUR BUSINESS PLAN

Whatever your business is, it probably is a reflection of yourself. Your interests and talents, that is. Who you market to will also depend on your characteristics and preferences. So, as you choose the demographics of your avatar, consider who you identify with and would be comfortable marketing to.

How to find and analyze business plan demographics

The market for a product or service is quantified by the number of people who make it up and the total amount of money they spend. We can quantify the size of the market by segmenting people based on their demographic characteristics

Of course, since most of this information is numerical, I’ll be using a spreadsheet to keep track of what I found and what changes in variables mean for the market of my aspiring business.

Also, I’ll be using online resources for the sake of time and simplicity. Theoretically, market research could involve things like focus groups and surveys. That’s more involved than I want to get for this idea, so, I’ll stick with the free information.

The SBA has a nice list of resources for market and competitive analysis here .

Demographic information

Here, we’re just looking for basic information about the people who I might be selling to. For instance, how many people are in the age range that I would market to? How much money do they make? Are they single and looking to mingle? Or, are they in committed relationships and proud of their bald head (like a certain “old man” I used to know and miss very much)?

From FactFinder to spreadsheet

First stop is the U.S. Census FactFinder ( link ).

Here, you can find Census data about your state, city, or even zip code. Not every business is going to be nationwide. Some, like a restaurant, will be very local.

Also, if your business will market to other businesses (B2B), then the information contained here may or may not be pertinent to you. Try another part of the Census website called the Small Business Edition ( link ) if you’re not finding what you need.

Interested in mining the Census website for more valuable market research? Read this post: CENSUS DATA MARKET RESEARCH AT THE NEW DATA.CENSUS.GOV

Since, as of now, I envision my business being nationwide (at the very least regional), I chose to use the “Guided Search.” From there, in the “Topics” section, I chose to look at information pertaining to age, sex, age group, income/earnings (households), and marital status.

I can always delve into more detail or retrieve different information at a later time. My hope is that this gets me started.

Additionally, on the next screen, I chose to break the information down by region. I included all regions so that I could total them for a view of the entire country.

Finally, on the last screen, I opted to see the one table that outlined this information in 2017, the latest year available.

Don’t bother with the “Download” Action. It will give you your data in a different format than it is displayed.

Instead, just highlight everything in the FactFinder table and copy + paste it in a spreadsheet.

Fixing errors

From there, do a Find and replace in your spreadsheet to get rid of the errors that are a result of a “=” being placed in front of the “+/-.01” in the Margin of error column. Replace the “=” with an apostrophe. Be sure to Also search within formulas .

Filtering for the demographic information I need

My goal here is to get a range of the number of potential customers based on a set of demographic statistics. I have a lot more information than I need, so let’s see if we can widdle this down into something more useable.

To do this, I added some columns to the Demographic Info worksheet.

First of all, I added a column ( Estimate # ) that aimed to translate some of the percentage population information into quantities. The format of every download from FactFinder isn’t going to be the same. But, an attempt was made to give you access to both percentage and quantity information for each line item.

Additionally, you’ll find a column named Enter 1-10 to rank demographics . Here, you’ll be able to rank demographic information and narrow down your market on the Pick Demographics worksheet.

Want to nail down the size of your market before you move forward? Read this post: MARKET SIZE FOR A BUSINESS PLAN – 2 METHODS TO GAUGE IT

Creating customer avatars

Maybe you have a couple of different mixes of demographics in mind. That’s fine. Once you are satisfied with one mix of demographics you can highlight the information on the Pick Demographics worksheet, then copy and paste the values (Ctrl + Shift +V) into one of the boxes on the Customer Avatars worksheet.

This allows you to keep tabs on several different customer profiles as you move forward with your business plan.

Keep in mind, this is just the first step of the business plan. The whole point of a plan such as this is to be proactive. In order to be proactive, you’re going to have to be flexible.

If, as you move along through the steps, you reconsider your target demographic – that’s fine. Just circle back and refine your avatars and make adjustments to other parts of the plan as necessary. Don’t get discouraged if you have to do this. That is the whole point of this exercise.

For my avatars, I created four, relatively similar mixes of demographic characteristics.

Gender and income

All include males. Though females can also suffer from hair loss, I am assuming that males would be the primary customer and who the majority of marketing would be geared toward.

Next, every mix of demographics included individuals with earnings as opposed to those with retirement income , with Social Security income , or any other type of public assistance.

Right now, I anticipate that this product would be sold at a premium price due to its uniqueness and all-natural ingredients. This would mean that customers would likely need to earn above-median incomes in order to be in a position to buy a product such as this. Assumptions such as this might change as I progress through this business plan.

In three out of my four avatars, I made assumptions about the relationship status of these men. The demographics included were Now married, except separated , Never married , and Separated . These were my three main avatars.

The fourth included Males , With earnings , and who were High school graduates . This is my “catch-all” avatar. The real total addressable market for my product is probably between this population and the total of the three mentioned above.

The main difference between the three main avatars had to do with education. I assumed that men who were single might be more likely than married men to purchase a product such as this, I lowered the EDUCATION ATTAINMENT to Some college or associate’s degree .

Defining a target market with business plan demographics

Be sure to download your own copy of the workbook used in this post. Just fill out the form at the top.

What other sources would you use to find demographic information for your business plan?

How about the avatars? How would you have screened them further?

Join the conversation on Twitter!

Small Business Trends

How to create a business plan: examples & free template.

This is the ultimate guide to creating a comprehensive and effective plan to start a business . In today’s dynamic business landscape, having a well-crafted business plan is an important first step to securing funding, attracting partners, and navigating the challenges of entrepreneurship.

This guide has been designed to help you create a winning plan that stands out in the ever-evolving marketplace. U sing real-world examples and a free downloadable template, it will walk you through each step of the process.

Whether you’re a seasoned entrepreneur or launching your very first startup, the guide will give you the insights, tools, and confidence you need to create a solid foundation for your business.

Table of Contents

How to Write a Business Plan

Embarking on the journey of creating a successful business requires a solid foundation, and a well-crafted business plan is the cornerstone. Here is the process of writing a comprehensive business plan and the main parts of a winning business plan . From setting objectives to conducting market research, this guide will have everything you need.

Executive Summary

The Executive Summary serves as the gateway to your business plan, offering a snapshot of your venture’s core aspects. This section should captivate and inform, succinctly summarizing the essence of your plan.

It’s crucial to include a clear mission statement, a brief description of your primary products or services, an overview of your target market, and key financial projections or achievements.

Think of it as an elevator pitch in written form: it should be compelling enough to engage potential investors or stakeholders and provide them with a clear understanding of what your business is about, its goals, and why it’s a promising investment.

Example: EcoTech is a technology company specializing in eco-friendly and sustainable products designed to reduce energy consumption and minimize waste. Our mission is to create innovative solutions that contribute to a cleaner, greener environment.

Our target market includes environmentally conscious consumers and businesses seeking to reduce their carbon footprint. We project a 200% increase in revenue within the first three years of operation.

Overview and Business Objectives

In the Overview and Business Objectives section, outline your business’s core goals and the strategic approaches you plan to use to achieve them. This section should set forth clear, specific objectives that are attainable and time-bound, providing a roadmap for your business’s growth and success.

It’s important to detail how these objectives align with your company’s overall mission and vision. Discuss the milestones you aim to achieve and the timeframe you’ve set for these accomplishments.

This part of the plan demonstrates to investors and stakeholders your vision for growth and the practical steps you’ll take to get there.

Example: EcoTech’s primary objective is to become a market leader in sustainable technology products within the next five years. Our key objectives include:

• Introducing three new products within the first two years of operation.
• Achieving annual revenue growth of 30%.
• Expanding our customer base to over 10,000 clients by the end of the third year.

Company Description

The Company Description section is your opportunity to delve into the details of your business. Provide a comprehensive overview that includes your company’s history, its mission statement, and its vision for the future.

Highlight your unique selling proposition (USP) – what makes your business stand out in the market. Explain the problems your company solves and how it benefits your customers.

Include information about the company’s founders, their expertise, and why they are suited to lead the business to success. This section should paint a vivid picture of your business, its values, and its place in the industry.

Example: EcoTech is committed to developing cutting-edge sustainable technology products that benefit both the environment and our customers. Our unique combination of innovative solutions and eco-friendly design sets us apart from the competition. We envision a future where technology and sustainability go hand in hand, leading to a greener planet.

Define Your Target Market

Defining Your Target Market is critical for tailoring your business strategy effectively. This section should describe your ideal customer base in detail, including demographic information (such as age, gender, income level, and location) and psychographic data (like interests, values, and lifestyle).

Elucidate on the specific needs or pain points of your target audience and how your product or service addresses these. This information will help you know your target market and develop targeted marketing strategies.

Example: Our target market comprises environmentally conscious consumers and businesses looking for innovative solutions to reduce their carbon footprint. Our ideal customers are those who prioritize sustainability and are willing to invest in eco-friendly products.

Market Analysis

The Market Analysis section requires thorough research and a keen understanding of the industry. It involves examining the current trends within your industry, understanding the needs and preferences of your customers, and analyzing the strengths and weaknesses of your competitors.

This analysis will enable you to spot market opportunities and anticipate potential challenges. Include data and statistics to back up your claims, and use graphs or charts to illustrate market trends.

This section should demonstrate that you have a deep understanding of the market in which you operate and that your business is well-positioned to capitalize on its opportunities.

Example: The market for eco-friendly technology products has experienced significant growth in recent years, with an estimated annual growth rate of 10%. As consumers become increasingly aware of environmental issues, the demand for sustainable solutions continues to rise.

Our research indicates a gap in the market for high-quality, innovative eco-friendly technology products that cater to both individual and business clients.

SWOT Analysis

A SWOT analysis in your business plan offers a comprehensive examination of your company’s internal and external factors. By assessing Strengths, you showcase what your business does best and where your capabilities lie.

Weaknesses involve an honest introspection of areas where your business may be lacking or could improve. Opportunities can be external factors that your business could capitalize on, such as market gaps or emerging trends.

Threats include external challenges your business may face, like competition or market changes. This analysis is crucial for strategic planning, as it helps in recognizing and leveraging your strengths, addressing weaknesses, seizing opportunities, and preparing for potential threats.

Including a SWOT analysis demonstrates to stakeholders that you have a balanced and realistic understanding of your business in its operational context.

• Innovative and eco-friendly product offerings.
• Strong commitment to sustainability and environmental responsibility.
• Skilled and experienced team with expertise in technology and sustainability.

Weaknesses:

• Limited brand recognition compared to established competitors.
• Reliance on third-party manufacturers for product development.

Opportunities:

• Growing consumer interest in sustainable products.
• Partnerships with environmentally-focused organizations and influencers.
• Expansion into international markets.
• Intense competition from established technology companies.
• Regulatory changes could impact the sustainable technology market.

Competitive Analysis

In this section, you’ll analyze your competitors in-depth, examining their products, services, market positioning, and pricing strategies. Understanding your competition allows you to identify gaps in the market and tailor your offerings to outperform them.

By conducting a thorough competitive analysis, you can gain insights into your competitors’ strengths and weaknesses, enabling you to develop strategies to differentiate your business and gain a competitive advantage in the marketplace.

Example: Key competitors include:

GreenTech: A well-known brand offering eco-friendly technology products, but with a narrower focus on energy-saving devices.

EarthSolutions: A direct competitor specializing in sustainable technology, but with a limited product range and higher prices.

By offering a diverse product portfolio, competitive pricing, and continuous innovation, we believe we can capture a significant share of the growing sustainable technology market.

Organization and Management Team

Provide an overview of your company’s organizational structure, including key roles and responsibilities. Introduce your management team, highlighting their expertise and experience to demonstrate that your team is capable of executing the business plan successfully.

Showcasing your team’s background, skills, and accomplishments instills confidence in investors and other stakeholders, proving that your business has the leadership and talent necessary to achieve its objectives and manage growth effectively.

Example: EcoTech’s organizational structure comprises the following key roles: CEO, CTO, CFO, Sales Director, Marketing Director, and R&D Manager. Our management team has extensive experience in technology, sustainability, and business development, ensuring that we are well-equipped to execute our business plan successfully.

Products and Services Offered

Describe the products or services your business offers, focusing on their unique features and benefits. Explain how your offerings solve customer pain points and why they will choose your products or services over the competition.

This section should emphasize the value you provide to customers, demonstrating that your business has a deep understanding of customer needs and is well-positioned to deliver innovative solutions that address those needs and set your company apart from competitors.

Example: EcoTech offers a range of eco-friendly technology products, including energy-efficient lighting solutions, solar chargers, and smart home devices that optimize energy usage. Our products are designed to help customers reduce energy consumption, minimize waste, and contribute to a cleaner environment.

Marketing and Sales Strategy

In this section, articulate your comprehensive strategy for reaching your target market and driving sales. Detail the specific marketing channels you plan to use, such as social media, email marketing, SEO, or traditional advertising.

Describe the nature of your advertising campaigns and promotional activities, explaining how they will capture the attention of your target audience and convey the value of your products or services. Outline your sales strategy, including your sales process, team structure, and sales targets.

Discuss how these marketing and sales efforts will work together to attract and retain customers, generate leads, and ultimately contribute to achieving your business’s revenue goals.

This section is critical to convey to investors and stakeholders that you have a well-thought-out approach to market your business effectively and drive sales growth.

Example: Our marketing strategy includes digital advertising, content marketing, social media promotion, and influencer partnerships. We will also attend trade shows and conferences to showcase our products and connect with potential clients. Our sales strategy involves both direct sales and partnerships with retail stores, as well as online sales through our website and e-commerce platforms.

Logistics and Operations Plan

The Logistics and Operations Plan is a critical component that outlines the inner workings of your business. It encompasses the management of your supply chain, detailing how you acquire raw materials and manage vendor relationships.

Inventory control is another crucial aspect, where you explain strategies for inventory management to ensure efficiency and reduce wastage. The section should also describe your production processes, emphasizing scalability and adaptability to meet changing market demands.

Quality control measures are essential to maintain product standards and customer satisfaction. This plan assures investors and stakeholders of your operational competency and readiness to meet business demands.

Highlighting your commitment to operational efficiency and customer satisfaction underlines your business’s capability to maintain smooth, effective operations even as it scales.

Example: EcoTech partners with reliable third-party manufacturers to produce our eco-friendly technology products. Our operations involve maintaining strong relationships with suppliers, ensuring quality control, and managing inventory.

We also prioritize efficient distribution through various channels, including online platforms and retail partners, to deliver products to our customers in a timely manner.

Financial Projections Plan

In the Financial Projections Plan, lay out a clear and realistic financial future for your business. This should include detailed projections for revenue, costs, and profitability over the next three to five years.

Ground these projections in solid assumptions based on your market analysis, industry benchmarks, and realistic growth scenarios. Break down revenue streams and include an analysis of the cost of goods sold, operating expenses, and potential investments.

This section should also discuss your break-even analysis, cash flow projections, and any assumptions about external funding requirements.

By presenting a thorough and data-backed financial forecast, you instill confidence in potential investors and lenders, showcasing your business’s potential for profitability and financial stability.

This forward-looking financial plan is crucial for demonstrating that you have a firm grasp of the financial nuances of your business and are prepared to manage its financial health effectively.

Example: Over the next three years, we expect to see significant growth in revenue, driven by new product launches and market expansion. Our financial projections include:

• Year 1: $1.5 million in revenue, with a net profit of $200,000.
• Year 2: $3 million in revenue, with a net profit of $500,000.
• Year 3: $4.5 million in revenue, with a net profit of $1 million.

These projections are based on realistic market analysis, growth rates, and product pricing.

Income Statement

The income statement , also known as the profit and loss statement, provides a summary of your company’s revenues and expenses over a specified period. It helps you track your business’s financial performance and identify trends, ensuring you stay on track to achieve your financial goals.

Regularly reviewing and analyzing your income statement allows you to monitor the health of your business, evaluate the effectiveness of your strategies, and make data-driven decisions to optimize profitability and growth.

Example: The income statement for EcoTech’s first year of operation is as follows:

• Revenue: $1,500,000
• Cost of Goods Sold: $800,000
• Gross Profit: $700,000
• Operating Expenses: $450,000
• Net Income: $250,000

This statement highlights our company’s profitability and overall financial health during the first year of operation.

Cash Flow Statement

A cash flow statement is a crucial part of a financial business plan that shows the inflows and outflows of cash within your business. It helps you monitor your company’s liquidity, ensuring you have enough cash on hand to cover operating expenses, pay debts, and invest in growth opportunities.

By including a cash flow statement in your business plan, you demonstrate your ability to manage your company’s finances effectively.

Example:  The cash flow statement for EcoTech’s first year of operation is as follows:

Operating Activities:

• Depreciation: $10,000
• Changes in Working Capital: -$50,000
• Net Cash from Operating Activities: $210,000

Investing Activities:

•  Capital Expenditures: -$100,000
• Net Cash from Investing Activities: -$100,000

Financing Activities:

• Proceeds from Loans: $150,000
• Loan Repayments: -$50,000
• Net Cash from Financing Activities: $100,000
• Net Increase in Cash: $210,000

This statement demonstrates EcoTech’s ability to generate positive cash flow from operations, maintain sufficient liquidity, and invest in growth opportunities.

Tips on Writing a Business Plan

1. Be clear and concise: Keep your language simple and straightforward. Avoid jargon and overly technical terms. A clear and concise business plan is easier for investors and stakeholders to understand and demonstrates your ability to communicate effectively.

2. Conduct thorough research: Before writing your business plan, gather as much information as possible about your industry, competitors, and target market. Use reliable sources and industry reports to inform your analysis and make data-driven decisions.

3. Set realistic goals: Your business plan should outline achievable objectives that are specific, measurable, attainable, relevant, and time-bound (SMART). Setting realistic goals demonstrates your understanding of the market and increases the likelihood of success.

4. Focus on your unique selling proposition (USP): Clearly articulate what sets your business apart from the competition. Emphasize your USP throughout your business plan to showcase your company’s value and potential for success.

5. Be flexible and adaptable: A business plan is a living document that should evolve as your business grows and changes. Be prepared to update and revise your plan as you gather new information and learn from your experiences.

6. Use visuals to enhance understanding: Include charts, graphs, and other visuals to help convey complex data and ideas. Visuals can make your business plan more engaging and easier to digest, especially for those who prefer visual learning.

7. Seek feedback from trusted sources: Share your business plan with mentors, industry experts, or colleagues and ask for their feedback. Their insights can help you identify areas for improvement and strengthen your plan before presenting it to potential investors or partners.

FREE Business Plan Template

To help you get started on your business plan, we have created a template that includes all the essential components discussed in the “How to Write a Business Plan” section. This easy-to-use template will guide you through each step of the process, ensuring you don’t miss any critical details.

The template is divided into the following sections:

• Mission statement
• Business Overview
• Key products or services
• Target market
• Financial highlights
• Company goals
• Strategies to achieve goals
• Measurable, time-bound objectives
• Company History
• Mission and vision
• Unique selling proposition
• Demographics
• Psychographics
• Pain points
• Industry trends
• Customer needs
• Competitor strengths and weaknesses
• Opportunities
• Competitor products and services
• Market positioning
• Pricing strategies
• Organizational structure
• Key roles and responsibilities
• Management team backgrounds
• Product or service features
• Competitive advantages
• Marketing channels
• Advertising campaigns
• Promotional activities
• Sales strategies
• Supply chain management
• Inventory control
• Production processes
• Quality control measures
• Projected revenue
• Assumptions
• Cash inflows
• Cash outflows
• Net cash flow

What is a Business Plan?

A business plan is a strategic document that outlines an organization’s goals, objectives, and the steps required to achieve them. It serves as a roadmap as you start a business , guiding the company’s direction and growth while identifying potential obstacles and opportunities.

Typically, a business plan covers areas such as market analysis, financial projections, marketing strategies, and organizational structure. It not only helps in securing funding from investors and lenders but also provides clarity and focus to the management team.

A well-crafted business plan is a very important part of your business startup checklist because it fosters informed decision-making and long-term success.

Why You Should Write a Business Plan

Understanding the importance of a business plan in today’s competitive environment is crucial for entrepreneurs and business owners. Here are five compelling reasons to write a business plan:

• Attract Investors and Secure Funding : A well-written business plan demonstrates your venture’s potential and profitability, making it easier to attract investors and secure the necessary funding for growth and development. It provides a detailed overview of your business model, target market, financial projections, and growth strategies, instilling confidence in potential investors and lenders that your company is a worthy investment.
• Clarify Business Objectives and Strategies : Crafting a business plan forces you to think critically about your goals and the strategies you’ll employ to achieve them, providing a clear roadmap for success. This process helps you refine your vision and prioritize the most critical objectives, ensuring that your efforts are focused on achieving the desired results.
• Identify Potential Risks and Opportunities : Analyzing the market, competition, and industry trends within your business plan helps identify potential risks and uncover untapped opportunities for growth and expansion. This insight enables you to develop proactive strategies to mitigate risks and capitalize on opportunities, positioning your business for long-term success.
• Improve Decision-Making : A business plan serves as a reference point so you can make informed decisions that align with your company’s overall objectives and long-term vision. By consistently referring to your plan and adjusting it as needed, you can ensure that your business remains on track and adapts to changes in the market, industry, or internal operations.
• Foster Team Alignment and Communication : A shared business plan helps ensure that all team members are on the same page, promoting clear communication, collaboration, and a unified approach to achieving the company’s goals. By involving your team in the planning process and regularly reviewing the plan together, you can foster a sense of ownership, commitment, and accountability that drives success.

What are the Different Types of Business Plans?

In today’s fast-paced business world, having a well-structured roadmap is more important than ever. A traditional business plan provides a comprehensive overview of your company’s goals and strategies, helping you make informed decisions and achieve long-term success. There are various types of business plans, each designed to suit different needs and purposes. Let’s explore the main types:

• Startup Business Plan: Tailored for new ventures, a startup business plan outlines the company’s mission, objectives, target market, competition, marketing strategies, and financial projections. It helps entrepreneurs clarify their vision, secure funding from investors, and create a roadmap for their business’s future. Additionally, this plan identifies potential challenges and opportunities, which are crucial for making informed decisions and adapting to changing market conditions.
• Internal Business Plan: This type of plan is intended for internal use, focusing on strategies, milestones, deadlines, and resource allocation. It serves as a management tool for guiding the company’s growth, evaluating its progress, and ensuring that all departments are aligned with the overall vision. The internal business plan also helps identify areas of improvement, fosters collaboration among team members, and provides a reference point for measuring performance.
• Strategic Business Plan: A strategic business plan outlines long-term goals and the steps to achieve them, providing a clear roadmap for the company’s direction. It typically includes a SWOT analysis, market research, and competitive analysis. This plan allows businesses to align their resources with their objectives, anticipate changes in the market, and develop contingency plans. By focusing on the big picture, a strategic business plan fosters long-term success and stability.
• Feasibility Business Plan: This plan is designed to assess the viability of a business idea, examining factors such as market demand, competition, and financial projections. It is often used to decide whether or not to pursue a particular venture. By conducting a thorough feasibility analysis, entrepreneurs can avoid investing time and resources into an unviable business concept. This plan also helps refine the business idea, identify potential obstacles, and determine the necessary resources for success.
• Growth Business Plan: Also known as an expansion plan, a growth business plan focuses on strategies for scaling up an existing business. It includes market analysis, new product or service offerings, and financial projections to support expansion plans. This type of plan is essential for businesses looking to enter new markets, increase their customer base, or launch new products or services. By outlining clear growth strategies, the plan helps ensure that expansion efforts are well-coordinated and sustainable.
• Operational Business Plan: This type of plan outlines the company’s day-to-day operations, detailing the processes, procedures, and organizational structure. It is an essential tool for managing resources, streamlining workflows, and ensuring smooth operations. The operational business plan also helps identify inefficiencies, implement best practices, and establish a strong foundation for future growth. By providing a clear understanding of daily operations, this plan enables businesses to optimize their resources and enhance productivity.
• Lean Business Plan: A lean business plan is a simplified, agile version of a traditional plan, focusing on key elements such as value proposition, customer segments, revenue streams, and cost structure. It is perfect for startups looking for a flexible, adaptable planning approach. The lean business plan allows for rapid iteration and continuous improvement, enabling businesses to pivot and adapt to changing market conditions. This streamlined approach is particularly beneficial for businesses in fast-paced or uncertain industries.
• One-Page Business Plan: As the name suggests, a one-page business plan is a concise summary of your company’s key objectives, strategies, and milestones. It serves as a quick reference guide and is ideal for pitching to potential investors or partners. This plan helps keep teams focused on essential goals and priorities, fosters clear communication, and provides a snapshot of the company’s progress. While not as comprehensive as other plans, a one-page business plan is an effective tool for maintaining clarity and direction.
• Nonprofit Business Plan: Specifically designed for nonprofit organizations, this plan outlines the mission, goals, target audience, fundraising strategies, and budget allocation. It helps secure grants and donations while ensuring the organization stays on track with its objectives. The nonprofit business plan also helps attract volunteers, board members, and community support. By demonstrating the organization’s impact and plans for the future, this plan is essential for maintaining transparency, accountability, and long-term sustainability within the nonprofit sector.
• Franchise Business Plan: For entrepreneurs seeking to open a franchise, this type of plan focuses on the franchisor’s requirements, as well as the franchisee’s goals, strategies, and financial projections. It is crucial for securing a franchise agreement and ensuring the business’s success within the franchise system. This plan outlines the franchisee’s commitment to brand standards, marketing efforts, and operational procedures, while also addressing local market conditions and opportunities. By creating a solid franchise business plan, entrepreneurs can demonstrate their ability to effectively manage and grow their franchise, increasing the likelihood of a successful partnership with the franchisor.

Using Business Plan Software

Creating a comprehensive business plan can be intimidating, but business plan software can streamline the process and help you produce a professional document. These tools offer a number of benefits, including guided step-by-step instructions, financial projections, and industry-specific templates. Here are the top 5 business plan software options available to help you craft a great business plan.

1. LivePlan

LivePlan is a popular choice for its user-friendly interface and comprehensive features. It offers over 500 sample plans, financial forecasting tools, and the ability to track your progress against key performance indicators. With LivePlan, you can create visually appealing, professional business plans that will impress investors and stakeholders.

2. Upmetrics

Upmetrics provides a simple and intuitive platform for creating a well-structured business plan. It features customizable templates, financial forecasting tools, and collaboration capabilities, allowing you to work with team members and advisors. Upmetrics also offers a library of resources to guide you through the business planning process.

Bizplan is designed to simplify the business planning process with a drag-and-drop builder and modular sections. It offers financial forecasting tools, progress tracking, and a visually appealing interface. With Bizplan, you can create a business plan that is both easy to understand and visually engaging.

Enloop is a robust business plan software that automatically generates a tailored plan based on your inputs. It provides industry-specific templates, financial forecasting, and a unique performance score that updates as you make changes to your plan. Enloop also offers a free version, making it accessible for businesses on a budget.

5. Tarkenton GoSmallBiz

Developed by NFL Hall of Famer Fran Tarkenton, GoSmallBiz is tailored for small businesses and startups. It features a guided business plan builder, customizable templates, and financial projection tools. GoSmallBiz also offers additional resources, such as CRM tools and legal document templates, to support your business beyond the planning stage.

Business Plan FAQs

What is a good business plan.

A good business plan is a well-researched, clear, and concise document that outlines a company’s goals, strategies, target market, competitive advantages, and financial projections. It should be adaptable to change and provide a roadmap for achieving success.

What are the 3 main purposes of a business plan?

The three main purposes of a business plan are to guide the company’s strategy, attract investment, and evaluate performance against objectives. Here’s a closer look at each of these:

• It outlines the company’s purpose and core values to ensure that all activities align with its mission and vision.
• It provides an in-depth analysis of the market, including trends, customer needs, and competition, helping the company tailor its products and services to meet market demands.
• It defines the company’s marketing and sales strategies, guiding how the company will attract and retain customers.
• It describes the company’s organizational structure and management team, outlining roles and responsibilities to ensure effective operation and leadership.
• It sets measurable, time-bound objectives, allowing the company to plan its activities effectively and make strategic decisions to achieve these goals.
• It provides a comprehensive overview of the company and its business model, demonstrating its uniqueness and potential for success.
• It presents the company’s financial projections, showing its potential for profitability and return on investment.
• It demonstrates the company’s understanding of the market, including its target customers and competition, convincing investors that the company is capable of gaining a significant market share.
• It showcases the management team’s expertise and experience, instilling confidence in investors that the team is capable of executing the business plan successfully.
• It establishes clear, measurable objectives that serve as performance benchmarks.
• It provides a basis for regular performance reviews, allowing the company to monitor its progress and identify areas for improvement.
• It enables the company to assess the effectiveness of its strategies and make adjustments as needed to achieve its objectives.
• It helps the company identify potential risks and challenges, enabling it to develop contingency plans and manage risks effectively.
• It provides a mechanism for evaluating the company’s financial performance, including revenue, expenses, profitability, and cash flow.

Can I write a business plan by myself?

Yes, you can write a business plan by yourself, but it can be helpful to consult with mentors, colleagues, or industry experts to gather feedback and insights. There are also many creative business plan templates and business plan examples available online, including those above.

We also have examples for specific industries, including a using food truck business plan , salon business plan , farm business plan , daycare business plan , and restaurant business plan .

Is it possible to create a one-page business plan?

Yes, a one-page business plan is a condensed version that highlights the most essential elements, including the company’s mission, target market, unique selling proposition, and financial goals.

How long should a business plan be?

A typical business plan ranges from 20 to 50 pages, but the length may vary depending on the complexity and needs of the business.

What is a business plan outline?

A business plan outline is a structured framework that organizes the content of a business plan into sections, such as the executive summary, company description, market analysis, and financial projections.

What are the 5 most common business plan mistakes?

The five most common business plan mistakes include inadequate research, unrealistic financial projections, lack of focus on the unique selling proposition, poor organization and structure, and failure to update the plan as circumstances change.

What questions should be asked in a business plan?

A business plan should address questions such as: What problem does the business solve? Who is the specific target market ? What is the unique selling proposition? What are the company’s objectives? How will it achieve those objectives?

What’s the difference between a business plan and a strategic plan?

A business plan focuses on the overall vision, goals, and tactics of a company, while a strategic plan outlines the specific strategies, action steps, and performance measures necessary to achieve the company’s objectives.

How is business planning for a nonprofit different?

Nonprofit business planning focuses on the organization’s mission, social impact, and resource management, rather than profit generation. The financial section typically includes funding sources, expenses, and projected budgets for programs and operations.

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How to Write a Marketing Plan

By Joe Weller | March 28, 2024

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A  marketing plan is a guide for achieving marketing initiatives on a set timeline. It includes analysis of a company's target audience, competitors, and market sector. Teams can build an organized strategy with that information to reach their goals.  

Inside this article you’ll find a detailed, step-by-step guide to writing a marketing plan, with a free, downloadable  marketing starter kit for beginners .

A  marketing plan includes analysis of the target audience, the competitors, and the market so that teams can determine the best strategy for achieving their goals. The plan’s length and detail depend on the company's size and the scope of the marketing project. A marketing plan is useful for all types of marketing, including digital, social media, new product, small business, B2C, and B2B. Follow the steps below to write a comprehensive marketing plan. 

1. Prepare for Success 

Before you begin writing your marketing plan, set yourself up for success by conducting thorough market research and assembling a team with diverse skills in marketing strategy, content creation, digital marketing, and data analysis. Be sure to consult all your team members as you progress through these steps. It might also be helpful to assign leaders to complete different sections of the plan, depending on their areas of expertise. For example, you might assign the market analysis section to a team member with strong analytical skills and experience in data analysis.  

2. Use a Marketing Plan Template

Download a free marketing plan template to ensure consistency and thoroughness in your final marketing plan.

For more template options, see this collection of  free marketing plan templates and examples.   

3. Identify Your Target Customers

To identify target customers for your marketing plan, collect information about their location, demographics (such as age, gender, and income), interests, values, and purchasing behaviors. This knowledge enables you to focus your marketing goals and tactics to meet their specific needs and preferences.

A  customer persona is a fictional representation of your ideal customer that provides valuable insights for strategic decision-making. Use one of these  customer persona templates  to craft a detailed profile of your ideal customer.   

4. Conduct a SWOT Analysis

A SWOT analysis is an important part of any marketing plan, because it helps identify a company’s strengths, weaknesses, opportunities, and threats in relation to the market environment. To start, divide a page into four quadrants and label each as strengths, weaknesses, opportunities, and threats. Next, brainstorm with your team to fill in each section. Be as honest and specific as possible, considering factors such as market trends, competition, and your own resources and capabilities. This information will allow the team to capitalize on strengths, prepare for challenges, and make sound strategic decisions throughout the marketing plan. 

See this collection of  marketing plan SWOT analysis templates  for additional guidance.   

5. Conduct a Market Analysis 

A  market analysis is an assessment of a market's size, growth, trends, customer segments, and competitor dynamics. Include it in your marketing plan to provide critical insights for strategic decision-making, helping to tailor products to customer needs, differentiate from competitors, and identify new opportunities. 

To conduct a market analysis for your marketing plan, determine each of the following factors:    

• Market Size: This is the total potential sales that a particular product or service can achieve within a defined market. Determine the market size by estimating the number of potential buyers for a particular service and multiplying that by the estimated number of purchases over a specific timeframe. (Number of Target Customers) x (Number of Purchases in a Given Time) = Market Size Imagine your company sells wireless headphones, and you estimate that the average consumer purchases a new pair every two years. If your market includes 1 million target customers, and assuming each customer buys one pair of headphones every two years, the calculation for annual market size would be as follows: (1 million target customers) x (0.5 purchases per year) = 500,000 pairs of wireless headphones per year   
• Market Growth Rate:  This measures the change in a market’s size over a specific time period and is typically expressed as a percentage. To determine the market growth rate, use the following formula: [(Current Market Size − Previous Market Size​) ÷ Previous Market Size] × 100% = Growth Rate For example, if the market for wireless headphones was worth $1 billion last year and is worth $1.1 billion this year, the market growth rate would be as follows: [($1.1 Billion – $1 Billion) ÷  $1 Billion] x 100% = 10%  

Market Share:  This is the percentage of total sales in an industry generated by a particular company over a period of time. It provides a benchmark for assessing performance relative to competitors. Use this formula for calculating market share: (Company’s Revenue ÷ Total Industry Revenue) x 100% = Market Share  

Tip:  Keep in mind that the market size, share, and growth rate are all estimates. It’s impossible to be exact. To obtain the most accurate numbers, review the latest industry reports and seek insight from experts.  

• Market Demand:  This is the amount of a product or service a consumer is willing to purchase and how much they are willing to pay for it. To determine market demand in a market analysis, begin by conducting comprehensive research on consumer behavior, preferences, and purchasing patterns related to your product or service. Use tools such as surveys, SEO analytics, and interviews to gather data on potential customer interest and willingness to pay, and analyze competitor pricing and offerings.  
• Market Trends:  This is the growth or decline direction of a product or service’s price over a specific timeframe. To identify a market trend, monitor industry developments, consumer behavior, and technological advancements over time. Review industry reports and expert analyses to understand broader market movements and future projections. Summarize these observations and include them in your plan to highlight the direction in which the market is heading.        

Market Segments:  The broader market includes specific groups, categorized by shared characteristics. Generally, there are four types of market segments: geographic, demographic, psychographic, and behavioral. In your marketing plan, detail how you'll target each segment by adapting your strategies to their unique characteristics. This targeted approach ensures more effective engagement with each segment.   

• Competitor Analysis:  A competitor analysis involves examining your competitors’ strengths, weaknesses, market positioning, product offerings, and marketing strategies. Describe how you'll conduct a comprehensive evaluation of key competitors by analyzing their market share, pricing, distribution channels, and promotional tactics. For more guidance, try downloading this competitor analysis template. Use it to identify areas where your rivals succeed and why. Their strengths indicate areas for improvement, while their weaknesses indicate opportunities.  

6. List Your SMART Goals 

Include SMART goals in your marketing plan to ensure that objectives are specific, measurable, actionable, relevant, and time-bound, providing a clear direction for strategic actions and performance evaluation. Start by identifying key performance areas that align with your overall business strategy. Then, for each goal, apply the SMART framework. 

Here are two examples of SMART marketing goals:   

• By Q4 end, increase search results page (SERP) position from 14th to the top three for keywords pertaining to our brand and lead to more organic traffic. 
• Increase social media following, reach, and engagement by 25 percent in six months and 50 percent in one year.

Learn more about SMART goals and find a customizable SMART goals worksheet  in this comprehensive  guide to writing SMART goals . 

7. Create a Marketing Strategy

A  marketing strategy is the plan for achieving your SMART goals.   

“A marketing plan should include strategic and tactical elements,” says Gayle Kalvert, Founder and CEO at  Creo Collective , a full-service marketing agency. “From a strategic standpoint, it is critical that the marketing plan aligns to the overall goals of the organization. Tactically, what initiatives will the marketing team execute, and why? Tactics with no strategy lead to spotty results and poor-quality leads.”

Use one of these  marketing strategy templates to get started. A successful marketing strategy will include the following elements: 

7a. Customer Buying Cycle

The  customer buying cycle is the path a potential customer follows from first having exposure to a product or service to becoming an advocate for it. Understanding this process allows marketers to effectively target communications and strategies at each stage in their marketing plan. 

Pro Tip: “Consider your persona’s buyer's journey and ensure marketing has a role at each stage of the journey, especially after the close,” says Kalvert. “That is when customers can become advocates, sources of referral, and great subjects for marketing content for future buyers.”

7b. Unique Selling Proposition

A  unique selling proposition (USP) is a specific benefit or advantage that sets your product or service apart from the competitors. By including a USP in a marketing plan, you help ensure that the team communicates why customers should choose your offering over others. 

For example, Google’s USP is its powerful and accurate search algorithm that delivers relevant search results faster and more efficiently than its competitors.

7c. Branding 

Branding is the development of a unique identity, image, and experience for a company. Marketers convey a brand through messaging, tone, logo, colors, and web design. The marketing strategy needs to align with the company’s brand in order to maintain consistency in messaging and experience, which ultimately builds customer trust.

7d. Marketing Mix A marketing mix refers to the set of actions that a company takes to promote its brand or product in the market, typically encapsulated by the four Ps: product, price, place, and promotion. Go through each of these steps when including the marketing mix in your strategy:  

• Product: Describe the product and the problem it solves for your target customers. What makes your product or service different from the competition? Why is it special? 
• Price: Explain how much your target customer is willing to pay for the product or service based on its real and perceived value. What do your competitors charge for a similar product? Will you run any seasonal promotions or discounts? 
• Place:  Describe where your product or service will be available for purchase by your target customers. Will you sell it online, through retail partners, or both? How will you manage logistics and supply chain to ensure your product is accessible to your target market?
• Promotion:  Detail the strategies you will use to communicate your product’s value to consumers. This includes advertising, public relations, social media marketing, email campaigns, sales promotions, and direct marketing tactics.    

7e. Channels 

Identify the specific mediums and platforms — or  channels — where you’ll share your message to your target audience. These should include distribution channels, communication channels, and engagement channels. 

As you list them, explain how they will be used to effectively reach and engage with your target audience. For example, if you’re marketing a new fitness app, one distribution channel would be a direct download from the App Store to reach fitness enthusiasts directly on their smartphones. An engagement channel could be an in-app community feature for users where they can share progress.

Here is a brief list of popular marketing channels:  

• Affiliate marketing
• Email marketing
• Social media
• Website marketing

7f. Tactics Tactics are the specific actions you will take to reach the goals outlined in your strategy. They cover everything from the creation and distribution of marketing materials to the scheduling of campaigns to the platforms used for advertising and engagement.  Detail the specific actions and tools you will use to execute your marketing strategy, along with timelines, responsibilities, and budget allocations for each activity. This includes specifying the exact steps for product promotion, customer engagement, content creation, digital marketing efforts, and any other methods chosen to reach and convert your target audience. “Equally as important as using data is to build in time and resources to be flexible,” says Kalvert. “The marketing landscape is evolving at such a rapid pace. Tactics that worked last year may not work this year. Be open to experimenting with new tactics and adjusting your approach based on feedback and results.”

8. Determine the Budget 

Start by estimating the costs associated with each tactic and channel outlined in your strategy, taking into account factors such as content creation, platform fees, and personnel costs. Next, prioritize spending based on the expected ROI for each tactic. Finally, document the budget in a clear, detailed format within your marketing plan, including an itemized list of costs for each tactic, total expenditure, and a contingency fund.

For more resources and help estimating marketing project costs, take a look at this collection of helpful free  marketing plan budget templates . 

9. Create a Calendar

Create a calendar to schedule and track deliverables. Include time for brainstorming, planning, executing, and analyzing results. List objectives, start dates, end dates, due dates, and responsible parties. Keep the calendar in a central location so that team members can easily access it.

10. List Marketing Tools and Technology

List any marketing tools or technologies your team will use to help achieve their goals. These can include email marketing software, blogging software, social media management software, or any other programs you plan to use.

11. Identify Metrics and KPIs

Identify the metrics for measuring and tracking your marketing goals. Metrics and KPIs eliminate ambiguity so that you can accurately measure progress. Select indicators that directly reflect the success of your marketing objectives, such as conversion rates, website traffic, lead generation, and customer acquisition costs.

12. Write an Executive Summary

Once you’ve completed all the sections in your marketing plan document, return to the first section to write the executive summary. Completing this section last ensures that you have a thorough understanding of all key elements before summarizing them. 

Concisely highlight the main objectives, target market, and key strategies of the plan, providing a snapshot of the market analysis and expected outcomes. Outline the budget, resources required, and the metrics for measuring success. This section serves as a compelling overview, enticing stakeholders to delve into the plan.

For more detailed information on executive summaries, see this guide to  writing an effective executive summary. You can also download a helpful template from this collection of  free executive summary templates

Marketing Starter Kit for Beginners

Download Marketing Starter Kit for Beginners

Get everything you need for creating a marketing plan with this free, downloadable marketing plan starter kit. The kit includes an executive summary template, a customer persona worksheet, a SWOT analysis template, a competitor analysis template, a SMART goals worksheet, a marketing strategy template, and a calendar template with a budget tracker, all in one easy-to-download file.

In this kit, you’ll find the following:  

• An executive summary template for Microsoft Word to help you introduce the content of your marketing plan.    
• A customer persona worksheet for Microsoft Word to collect information about your ideal customer.  
• A SWOT analysis template for Microsoft Word to guide strategic decision-making based on the company’s strengths, weaknesses, opportunities, and threats. 
• A competitor analysis template for Microsoft Word to help you compare and evaluate your competitors. 
• A SMART goals worksheet for Microsoft Word to ensure each marketing objective follows SMART guidelines. 
• A marketing strategy template for Microsoft Word to outline the plan for achieving your goals. 
• A calendar template with budget tracker for Excel where you can organize, track, and manage marketing deliverables and their costs. 
• A marketing plan template for Microsoft Word to ensure consistency and thoroughness in your final marketing plan.

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