Marketing 101, Part 2: Understand the Market

The Cruxology Marketing 101 series is meant to help non-marketers understand some Marketing basics. To be clear, this isn't a college course! This series should guide you in understanding the value of marketing for your organization and hopefully help you to understand what to prioritize and how to utilize your marketing resources correctly.

In part 1 of this series, we started by defining what Marketing is and what it is not. A friendly reminder from part 1 is that marketing above all else, is a strategic function. So now let's start digging into the components of what makes a good marketing strategy. Before any campaign, slogan, or ad placement, Marketers—and really any good business person— must first start with your audience and the market.

Understand the Market: Who are we marketing to? 

And what does the world around them look like? If you do not understand your audience, what the world looks like through their eyes, or what else and who else are influencing their decision making, you can very quickly go in the wrong direction. Understanding the market is fundamental to ensuring you are focused on the correct stakeholders (see my recap post with Lyle Berkowitz regarding focus on your stakeholders).

Let's be clear, understanding the market is not about guesswork or intuition. It's definitely not relying on previous experience in the market from 5 years ago (yes I've seen this happen); it’s about gathering real-time insights, interpreting them, and applying them in a way that shapes meaningful connections between your brand and your audience. These can be broken down into several types of insights. Let's walk through those now.

Market Research Fundamentals

Market research is the backbone of marketing knowledge. It helps businesses move beyond assumptions and toward evidence-based decisions. There are various types of market research to conduct, but generally they will fall into one of two categories:

• Qualitative Research: Focusing on depth, context, and meaning. Through interviews, focus groups, or open-ended surveys, marketers uncover the “why” behind customer attitudes, motivations, and behaviors. These are typically conducted with smaller quantities to get to the heart of people's perspectives.

• Quantitative Research: Focusing on measurable data. Using surveys, analytics, and statistical modeling, marketers can identify patterns, percentages, and trends at scale.

Though not always done (due to time constraints or resources), you can and should try to utilize the learnings from qualitative research to build your quantitative research studies. Together, these approaches provide a complete picture—qualitative reveals the human story, while quantitative validates it with data-driven proof.

Pro Tip: It is not a good idea to make big business decisions based entirely off of the opinions from a 6-10 person focus group or a handful of in-depth interviews. If you cannot afford to do both qual and quant research (be it a time constraint, budget constraint or both), I highly recommend choosing quant over qual with some open ended questions mixed into the survey. The human story may be a little bit weaker as a result, but at least you are not making expensive choices based on the opinion of so few people.

Customer Segmentation and Ideal Customer Profiles

One of my favorite sayings from clients comes when I ask them who their target customers are. Usually 3 out of 5 will say they want to target everyone because they want everyone to buy their product. I understand why business owners think like this—they want to sell big and grow quickly!

However, not all customers are the same, and treating them as such is a recipe for wasted resources and money. More importantly, not all customers are actually the right customers for your product or service. Or if there are multiple audiences that are appropriate to target, they may require completely different messaging strategies. That's why segmentation is vital. Even the biggest brands in the world with massive marketing budgets use customer segmentation to determine who to target!

Customer Segmentation

Segmentation allows Marketers to divide the market into distinct groups that can be targeted more effectively. Key segmentation types can include:

• Demographic: Age, gender, income, education, occupation

• Psychographic: Lifestyles, values, interests, and attitudes

• Behavioral: Purchase habits, brand loyalty, product usage

• Geographic: Location, climate, urban vs. rural environments

There are a million more things to consider and this can get more complex when you're focused in B2B vs B2C, but these are typically the 4 categories that segmentation can fall into.

Now it's one thing to identify potential segments that could be a fit, but what if you identify 6 segments but cannot possibly target all 6 simultaneously? Or what if one looks good initially but then you realize that that particular segment is so small that it actually doesn't make sense to target them?

Ideal Customer Profiles (ICPs)

That's where Ideal Customer Profiles (ICPs) come in. Let's take that scenario where you have 6 potential segments to target. You'll now need to dig a little bit deeper to determine which ones are the best fit for your business. Which of those 6 segments are the most likely to benefit from your offering? Are most likely to purchase? Have the resources to invest in your offering?

For example, let's say you are a medical device company creating a premium tool for a surgeon to use while performing open-heart surgery. You could have identified a community hospital as a segment that would benefit from your offering but upon closer inspection you learn that they don't perform open-heart surgeries at community hospitals in that region of the US. Or maybe you realize that mid-sized hospitals in that region are underfunded so will never have the budget to afford your price point. Therefore they are not your ICP.

The goal with segmentation and ICPs is precision: home in on the appropriate audience(s) so that you can focus on delivering the right message to the right audience, in the right context at the right time to influence their purchase.

Buyer Personas

The next element you need to build your strategy are your buyer personas. Buyer personas are representations of your customers built from research and data. They tend to be semi-fictional representations of your customers, bringing the human element to your buyers. These are meant to capture not just who the buyer is but how they make decisions.

• What are their goals and pain points?

• What motivates them to consider a product?

• What barriers might prevent them from buying?

• Who or what influences their decision-making?

• Are they making buying decisions on their own or is the buying decision made by committee?

These insights will allow you to tailor messaging and how you engage with your customers, anticipating their needs, addressing objections, and positioning your products in ways that will align with their unique customer journey.

Competitor and Industry Analysis

Ok so you've dug in on your customers, you know who you want to promote to and what makes them tick. So you're ready to go, right? There's just one problem with that approach. No brand exists in isolation.

You may have an amazing product or service to offer your customers. And it may be very unique and specific. But it is rare these days to be entering a market place where you are creating a net-new category. That means you will have competition and that competition is likely going for very similar, if not identical, customers as you are.

Which is why competitor and industry analysis provides essential context for your business and marketing strategy. If you don't understand your competitive set and how they are going to market, it will make it that much more difficult to convince your potential customer to choose you over your competition.

Always understand who and what you are up against by conducting:

• Competitor Analysis: Identifies strengths, weaknesses, pricing strategies, customer perceptions, and market positioning of rivals.

• Industry Analysis: Examines trends, regulations, technologies, and cultural shifts shaping the market as a whole.

Together, these analyses reveal opportunities to differentiate and help marketers avoid missteps by learning from the successes and failures of others. In other words, if you want to find the white space in a crowded market, you must have a very clear understanding of these two elements.

Pro Tip: When you conduct a competitive analysis, make sure you are not only analyzing the strengths and weaknesses of a competitor's offering as above. Also analyze the ways in which they are speaking about their offering. Looking at their messaging can give you important clues into how they are positioning themselves—vital information to glean so that you don't position your offerings or speak about your offerings in an identical way.

Conclusions

All of these elements—research, segmentation, personas, and competitor analysis—feed directly into business and marketing strategy. Without them, you are quite literally flying blind and risk missing the mark while wasting valuable resources.

With them, brands can:

• Craft messages that resonate deeply

• Allocate resources efficiently

• Anticipate shifts in consumer demand

• Position themselves effectively in a crowded marketplace

In short: Understanding the market transforms marketing from a shot in the dark into a strategic, scalable, and sustainable practice. There are many additional elements that factor into building a strong marketing strategy. We'll continue to cover those in future editions of this 101 series.

Looking for support in building your strategy? I'm here to help. Let's connect!