A market profile is a summary of the characteristics that define a given market, used by companies to identify potential consumers, evaluate their status against competitors, or assess the feasibility of launching a new product. It includes defining the ideal customer, assessing competition, and analyzing economic factors to promote products and maximize profitability.
Also known as a marketing profile, a market profile is a summary of the essential characteristics that define a given market. While the scope of this type of profile will vary somewhat based on the type of market being studied, there are several essential pieces of information that are typically included. Market profiles are used by companies to identify specific groups of potential consumers, evaluate their status against other companies offering similar goods and services, or to assess the feasibility of launching a new product in a specific location.
One of the key factors in any market profile is creating a working image of the ideal customer. This will often include defining the age and gender of people most likely to be attracted to a particular product. At times, factors such as ethnic origin, race, geographic location, religious orientation or preferences may also play a role in developing this type of market profile. It’s not unusual for your income level to be included in the creation of this type of profile as well.
For example, a gardening equipment company may conclude that a customer who is highly likely to purchase a particular gardening tool from their product line will be a male over the age of fifty. This ideal consumer will also live in a suburban area, have an income that is considered middle-class, and enjoy the garden as a weekend project. If this is the consumer that research indicates is most likely to buy the tool, the marketing campaign will be designed with the goal of attracting customers who fit this market profile.
A market profile does not have to be focused on one customer. The profiling approach can also be applied to assessing competition within a given market. Here, the idea is to determine whether a competitor’s product line is likely to appeal to the same general types of consumers. If so, the analysis will go into determining which of the two companies is positioned to capture the most interested consumer groups, usually by looking at retail patterns in recent years. Here, the idea is to strengthen a given company’s presence within an industry and at least allow it to capture a larger market share.
The market profiling process can be an assessment of the market at large, involving both elements of typical buyer information along with typical competitor information. The idea is to take this data, relate it to general economic information, and determine how to promote the company’s products in the current economic climate. With this approach, consumer spending projections take into account factors such as current prices for goods and services, the rate of production among major market competitors, and whether the overall economy is currently in a state of inflation or recession. Such a profile makes it easier to match future production to meet anticipated demand, thereby maximizing the potential for the business to remain profitable.
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