What does target group identification mean?
Target group identification is the process by which a company identifies and describes the groups of people who are most likely to be interested in its offerings.
This involves analyzing various characteristics and behaviors of potential customers in order to divide them into meaningful segments.
Target group identification as part of market analysis
Market analysis systematically examines a specific market in terms of size, potential, competition, trends, and demand.
Target group identification is a key element of this process, as it is impossible to develop an effective market strategy without knowing who the potential buyers are.
Target group analysis within market analysis has several objectives:
- Identifying the most relevant buyer groups
- Understanding needs, desires, and expectations
- Optimizing marketing strategies and product development
- Reducing wastage in communication
Procedure for determining target groups
As part of market analysis, target groups are systematically segmented based on various criteria.
The most common segmentation criteria are:
Criterion 1: Sociodemographic characteristics
- Age, gender, income, education, occupation, marital status
- Example: A premium car manufacturer tends to target high-income men between the ages of 35 and 55.
2nd Criterion: Geographical characteristics
- Place of residence, region, urban vs. rural, climatic conditions.
- Example: Outdoor clothing for customers in alpine regions.
3rd criterion: Psychographic characteristics
- Lifestyle, values, attitudes, interests
- Example: Sustainability-oriented consumers who value fairly produced clothing.
4th criterion: Behavior-oriented characteristics
- Purchasing behavior, brand loyalty, price awareness, usage behavior
- Example: Online shoppers who regularly respond to discount promotions.
Methods for target group analysis
When conducting market analysis, companies have various methods at their disposal for determining target groups:
- Primary research (e.g., surveys, interviews, focus groups)
- Secondary research (e.g., evaluation of studies, statistics, internal customer data)
- Customer profiles & personas to illustrate typical target group representatives
- Cluster analyses for data-based segmentation of large customer groups
Benefits of precise target group identification
A clearly defined target group helps companies use their resources efficiently and strengthen their market position:
- Targeted marketing: The right messages for the right recipients
- Product development: Offers that meet actual needs
- Higher customer satisfaction: Because expectations are better met
- Improved competitiveness: Through differentiated market approach
Conclusion
Target group identification is a fundamental part of any sound market analysis.
It enables companies to consistently align their market activities with the needs of their customers.
Those who know their target group well can identify trends early on, leverage competitive advantages, and operate successfully in the market over the long term.
More about market analysis
- Step-by-step guide to market analysis
- Methods and instruments of market analysis
- 7 steps for creating and performing a market analysis
- Everything you need to know about a market analysis!
- Target group identification in the context of market analysis
- Market analysis costs – An investment with foresight
- Market Analysis vs. Market Observation – What is the difference?
