Understanding your target market is a marketing fundamental. If you do not understand your customers, how can you create an effective strategy, plan or campaign to reach them?

If you market to consumers you need to understand demographics: income, education level, marital status, geographic location, owner vs renter, cultural background, number of children, hobbies, religion. It is also important to understand psychographics or what makes customers buy. Psychographic information is more difficult to obtain but can be more important in defining your marketing strategies, product positioning and target audience.

What are some effective psychographic questions to help you understand buyer behavior?

• What are consumers’ spending habits?
• Are consumers brand conscious?
• What influences and motivates buyer behavior…price, promotion, product quality?
• How do people buy (online or in-person)?
• How do you "stack up" to your competition?
• How are purchasing decisions made?

The main differences between consumer and business markets involve market demand, nature of buying unit and decision process.

In the B2B sector some of the variables are similar. Business buyer can be segmented demographically by industry, size of business, geographic locations, usage rates. Business marketers use some additional variables: purchasing approaches, situational factors, operating characteristics.

The demand for business products and services tend to change more often and more quickly than for consumer products and services. Small increases in consumer demands can translate to a huge increase in business demand.

In business purchases there are often more decision-makers and professional purchasing agents, who know how to buy more effectively. The decision-making process can be complex and formal. Important questions to ask in the business buying process:

• Who participates in the decision-making process?
• What are the major influences on the buyers?
• How are buying decisions made (committee, executive, purchasing agent)?
• What is the buying process (evaluation criteria, policies, procedures)?

The psychographics in business are different, but just as important as in consumer markets. Businesses are influenced by their business environment, which includes: technology, political, economic, competitive, social and cultural factors. Just like consumers they are looking for greater value in what they buy. Since there are often people in the process, interpersonal factors and group dynamics impact the psychographics as does the relationship with the seller. In B2B, the purchaser may need to be reassured that the right decision was made. They want to "look good" to others in the organization.

Select the target market that is attractive and profitable for you. And remember, if you target everyone, you target no one.