what is a market in a business plan

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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.

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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.

 Creative Commons CC0

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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What is a Marketing Plan & How to Create One [with Examples]

By Sara McGuire , Oct 26, 2023

A marketing plan is a blueprint that outlines your strategies to attract and convert your ideal customers as a part of your customer acquisition strategy . It’s a comprehensive document that details your:

• Target audience:  Who you’re trying to reach
• Marketing goals:  What you want to achieve
• Strategies and tactics:  How you’ll reach your goals
• Budget:  Resources you’ll allocate
• Metrics:  How you’ll measure success

In this article, I’ll explain everything you need to know about creating a marketing plan . If you need a little extra help, there are professionally designed marketing plan templates that’ll make the process much easier. So, let’s ditch the confusion and get started!

Click to jump ahead:

What is a marketing plan?

How to write a marketing plan .

• Marketing plan v.s. business plan
• Types of marketing plans

9 marketing plan examples to inspire your growth strategy

Marketing plan faqs.

A marketing plan is a report that outlines your marketing strategy for your products or services, which could be applicable for the coming year, quarter or month.  

Watch this quick, 13-minute video for more details on what a marketing plan is and how to make one yourself:

Typically, a marketing plan includes:

• An overview of your business’s marketing and advertising goals
• A description of your business’s current marketing position
• A timeline of when tasks within your strategy will be completed
• Key performance indicators (KPIs) you will be tracking
• A description of your business’s target market and customer needs
• A description of how you will measure the performance of the strategy

For example, this marketing plan template provides a high-level overview of the business and competitors before diving deep into specific goals, KPIs and tactics:

Learning how to write a marketing plan forces you to think through the important steps that lead to an effective marketing strategy . And a well-defined plan will help you stay focused on your high-level marketing goals.

With Venngage’s extensive catalog of marketing plan templates , creating your marketing plan isn’t going to be hard or tedious. In fact, Venngage has plenty of helpful communications and design resources for marketers. If you’re ready to get started, sign up for  Venngage for Marketers   now. It’s free to register and start designing.

Whether you’re a team trying to set smarter marketing goals, a consultant trying to set your client in the right direction, or a one-person team hustling it out, Venngage for Marketers helps you get things done.

As mentioned above, the scope of your marketing plan varies depending on its purpose or the type of organization it’s for.

For example, you could create a marketing plan that provides an overview of a company’s entire marketing strategy or simply focus on a specific channel like SEO, social media marketing, content marketing and more, like in this example:

A typical outline of a marketing plan includes:

• Executive summary
• Goals and objectives
• User personas
• Competitor analysis/SWOT analysis
• Baseline metrics
• Marketing strategy
• Tracking guidelines

Below you will see in details how to write each section as well as some examples of how you can design each section in a marketing plan.

Let’s look at how to create a successful marketing plan (click to jump ahead):

• Write a simple executive summary
• Set metric-driven marketing goals
• Outline your user personas
• Research all of your competitors
• Set accurate key baselines & metrics
• Create an actionable marketing strategy
• Set tracking or reporting guidelines

1. Write a simple executive summary

Starting your marketing plan off on the right foot is important. You want to pull people into your amazing plan for marketing domination. Not bore them to tears.

One of the best ways to get people excited to read your marketing plan is with a well-written executive summary. An executive summary introduces readers to your company goals, marketing triumphs, future plans, and other important contextual facts.

Basically, you can use the Executive Summary as a primer for the rest of your marketing plan.

Include things like:

• Simple marketing goals
• High-level metrics
• Important company milestones
• Facts about your brand
• Employee anecdotes
• Future goals & plans

Try to keep your executive summary rather brief and to the point. You aren’t writing a novel, so try to keep it under three to four paragraphs.

Take a look at the executive summary in the marketing plan example below:

The executive summary is only two paragraphs long — short but effective.

The executive summary tells readers about the company’s growth, and how they are about to overtake one of their competitors. But there’s no mention of specific metrics or figures. That will be highlighted in the next section of the marketing plan.

An effective executive summary should have enough information to pique the reader’s interest, but not bog them down with specifics yet. That’s what the rest of your marketing plan is for!

The executive summary also sets the tone for your marketing plan. Think about what tone will fit your brand ? Friendly and humorous? Professional and reliable? Inspiring and visionary?

2. Set metric-driven marketing goals

After you perfect your executive summary, it’s time to outline your marketing goals.

(If you’ve never set data-driven goals like this before, it would be worth reading this growth strategy guide ).

This is one of the most important parts of the entire marketing plan, so be sure to take your time and be as clear as possible. Moreover, optimizing your marketing funnel is key. Employing effective funnel software can simplify operations and provide valuable customer insights. It facilitates lead tracking, conversion rate analysis, and efficient marketing optimization .

As a rule of thumb, be as specific as possible. The folks over at  VoyMedia  advise that you should set goals that impact website traffic, conversions, and customer success — and to use real numbers.

Avoid outlining vague goals like:

• Get more Twitter followers
• Write more articles
• Create more YouTube videos (like educational or Explainer videos )
• Increase retention rate
• Decrease bounce rate

Instead, identify  key performance metrics  (KPI) you want to impact and the percentage you want to increase them by.

Take a look at the goals page in the marketing plan example below:

They not only identify a specific metric in each of their goals, but they also set a timeline for when they will be increased.

The same vague goals listed earlier become much clearer when specific numbers and timelines are applied to them:

• Get 100 new Twitter followers per month
• Write 5 more articles per week
• Create 10 YouTube videos each year
• Increase retention rate by 15% by 2020
• Decrease bounce rate by 5% by Q1
• Create an online course  and get 1,000 new leads
• Focus more on local SEO strategies

You can dive even deeper into your marketing goals if you want (generally, the more specific, the better). Here’s a marketing plan example that shows how to outline your growth goals:

3. Outline your user personas

Now, this may not seem like the most important part of your marketing plan, but I think it holds a ton of value.

Outlining your user personas is an important part of a marketing plan that should not be overlooked.

You should be asking not just how you can get the most visitors to your business, but how you can get the right visitors.

Who are your ideal customers? What are their goals? What are their biggest problems? How does your business solve customer problems?

Answering these questions will take lots of research, but it’s essential information to get.

Some ways to conduct user research are:

• Interviewing your users (either in person or on the phone)
• Conducting focus groups
• Researching other businesses in the same industry
• Surveying your audience

Then, you will need to compile your user data into a user persona  guide.

Take a look at how detailed this user persona template is below:

Taking the time to identify specific demographic traits, habits and goals will make it easier for you to cater your marketing plan to them.

Here’s how you can create a user persona guide:

The first thing you should add is a profile picture or icon for each user persona. It can help to put a face to your personas, so they seem more real.

Next, list demographic information like:

• Identifiers
• Activities/Hobbies

The user persona example above uses sliding scales to identify personality traits like introversion vs. extroversion and thinking vs. feeling. Identifying what type of personality your target users tend to have an influence on the messaging you use in your marketing content.

Meanwhile, this user persona guide identifies specific challenges the user faces each day:

But if you don’t want to go into such precise detail, you can stick to basic information, like in this marketing plan example:

Most businesses will have a few different types of target users. That’s why it’s pertinent to identify and create several different user personas . That way, you can better segment your marketing campaigns and set separate goals, if necessary.

Here’s a marketing plan example with a segmented user persona guide:

The important thing is for your team or client to have a clear picture of who their target user is and how they can appeal to their specific problems.

Start creating robust user personas using Venngage’s user persona guide .

4. Conduct an extensive competitor analysis

Next, on the marketing plan checklist, we have the competitor research section. This section will help you identify who your competitors are, what they’re doing, and how you could carve yourself a place alongside them in your niche — and ideally, surpass them. It’s something you can learn to do with rank tracking software .

Competitor research is also incredibly important if you are starting a blog .

Typically, your competitor research should include:

• Who their marketing team is
• Who their leadership team is
• What their marketing strategy is (this will probably revolve some reverse-engineering)
• What their sales strategy is (same deal)
• Social Media strategy (are they using discounting strategies such as coupon marketing to get conversions)
• Their market cap/financials
• Their yearly growth (you will probably need to use a marketing tool like Ahrefs to do this)
• The number of customers they have & their user personas

Also, take as deep a dive as you can into the strategies they use across their:

• Blog/Content marketing
• Social media marketing
• SEO Marketing
• Video marketing
• And any other marketing tactics they use

Research their strengths and weaknesses in all parts of their company, and you will find some great opportunities. Bookmark has a great guide to different marketing strategies for small businesses  if you need some more information there.

You can use this simple SWOT analysis worksheet to quickly work through all parts of their strategy as well:

Click the template above to create a SWOT chart . Customize the template to your liking — no design know-how needed.

Since you have already done all the research beforehand, adding this information to your marketing plan shouldn’t be that hard.

In this marketing plan example, some high-level research is outlined for 3 competing brands:

But you could take a deeper dive into different facets of your competitors’ strategies. This marketing plan example analyses a competitor’s content marketing strategy:

It can also be helpful to divide your competitors into Primary and Secondary groups. For example, Apple’s primary competitor may be Dell for computers, but its secondary competitor could be a company that makes tablets.

Your most dangerous competitors may not even be in the same industry as you. Like the CEO of Netflix said, “Sleep is our competition.”

5. Set accurate key baselines & metrics

It’s pretty hard to plan for the future if you don’t know where your business stands right now.

Before we do anything at Venngage, we find the baselines so we can compare future results to something. We do it so much it’s almost like second nature now!

Setting baselines will allow you to more accurately track your progress. You will also be able to better analyze what worked and what didn’t work, so you can build a stronger strategy. It will definitely help them clearly understand your goals and strategy as well.

Here’s a marketing plan example where the baselines are visualized:

Another way to include baselines in your plan is with a simple chart, like in the marketing plan example below:

Because data can be intimidating to a lot of people, visualizing your data using charts and infographics will help demystify the information.

6. Create an actionable marketing strategy

After pulling all the contextual information and relevant metrics into your marketing plan, it’s time to break down your marketing strategy.

Once again, it’s easier to communicate your information to your team or clients using visuals .

Mind maps are an effective way to show how a strategy with many moving parts ties together. For example, this mind map shows how the four main components of a marketing strategy interact together:

You can also use a flow chart to map out your strategy by objectives:

However you choose to visualize your strategy, your team should know exactly what they need to do. This is not the time to keep your cards close to your chest.

Your strategy section may need to take up a few pages to explain, like in the marketing plan example below:

With all of this information, even someone from the development team will understand what the marketing team is working on.

This minimalistic marketing plan example uses color blocks to make the different parts of the strategy easy to scan:

Breaking your strategy down into tasks will make it easier to tackle.

Another important way to visualize your marketing strategy is to create a project roadmap. A project roadmap visualizes the timeline of your product with individual tasks. Our roadmap maker can help you with this.

For example, this project roadmap shows how tasks on both the marketing and web design side run parallel to each other:

A simple timeline can also be used in your marketing plan:

Or a mind map, if you want to include a ton of information in a more organized way:

Even a simple “Next, Now, Later” chart can help visualize your strategy:

7. Set tracking or reporting guidelines

Close your marketing plan with a brief explanation of how you plan to track or measure your results. This will save you a lot of frustration down the line by standardizing how you track results across your team.

Like the other sections of your marketing plan, you can choose how in-depth you want to go. But there need to be some clear guidelines on how to measure the progress and results of your marketing plan.

At the bare minimum, your results tracking guidelines should specify:

• What you plan to track
• How you plan to track results
• How often you plan to measure

But you can more add tracking guidelines to your marketing plan if you see the need to. You may also want to include a template that your team or client can follow,  for  client reporting ,  ensure that the right metrics are being tracked.

The marketing plan example below dedicates a whole page to tracking criteria:

Use a task tracker to track tasks and marketing results, and a checklist maker to note down tasks, important life events, or tracking your daily life.

Similarly, the marketing plan example below talks about tracking content marketing instead:

Marketing plan vs. marketing strategy

Although often used interchangeably, the terms “marketing plan” and “marketing strategy” do have some differences.

Simply speaking, a marketing strategy presents what the business will do in order to reach a certain goal. A marketing plan outlines the specific daily, weekly, monthly or yearly activities that the marketing strategy calls for. As a business, you can create a marketing proposal for the marketing strategies defined in your company’s marketing plan. There are various marketing proposal examples that you can look at to help with this.

A company’s extended marketing strategy can be like this:

Notice how it’s more general and doesn’t include the actual activities required to complete each strategy or the timeframe those marketing activities will take place. That kind of information is included in a marketing plan, like this marketing plan template which talks about the content strategy in detail:

Marketing plan v.s business plan

While both marketing plans and business plans are crucial documents for businesses, they serve distinct purposes and have different scopes. Here’s a breakdown of the key differences:

Business plan is a comprehensive document that outlines all aspects of your business, including:

• Mission and vision
• Products or services
• Target market
• Competition
• Management team
• Financial projections
• Marketing strategy (including a marketing plan)
• Operations plan

Marketing plan on the other hand, dives deep into the specific strategies and tactics related to your marketing efforts. It expands on the marketing section of a business plan by detailing:

• Specific marketing goals (e.g., brand awareness, lead generation, sales)
• Target audience analysis (detailed understanding of their needs and behaviors)
• Product:  Features, benefits, positioning
• Price:  Pricing strategy, discounts
• Place:  Distribution channels (online, offline)
• Promotion:  Advertising, social media, content marketing, public relations
• Budget allocation for different marketing activities
• Metrics and measurement to track progress and success

In short, business plans paint the entire business picture, while marketing plans zoom in on the specific strategies used to reach your target audience and achieve marketing goals.

Types of marketing plans that can transform your business strategy

Let’s take a look at several types of marketing plans you can create, along with specific examples for each.

1. General marketing strategic plan / Annual marketing plan

This is a good example of a marketing plan that covers the overarching annual marketing strategy for a company:

Another good example would be this Starbucks marketing plan:

This one-page marketing plan example from coffee chain Starbucks has everything at a glance. The bold headers and subheadings make it easier to segment the sections so readers can focus on the area most relevant to them.

What we like about this example is how much it covers. From the ideal buyer persona to actional activities, as well as positioning and metrics, this marketing plan has it all.

Another marketing plan example that caught our eye is this one from Cengage. Although a bit text-heavy and traditional, it explains the various sections well. The clean layout makes this plan easy to read and absorb.

The last marketing plan example we would like to feature in this section is this one from Lush cosmetics.

It is a long one but it’s also very detailed. The plan outlines numerous areas, including the company mission, SWOT analysis , brand positioning, packaging, geographical criteria, and much more.

2. Content marketing plan

A content marketing plan highlights different strategies , campaigns or tactics you can use for your content to help your business reach its goals.

This one-page marketing plan example from Contently outlines a content strategy and workflow using simple colors and blocks. The bullet points detail more information but this plan can easily be understood at a glance, which makes it so effective.

For a more detailed content marketing plan example, take a look at this template which features an editorial calendar you can share with the whole team:

3. SEO marketing plan

Your SEO marketing plan highlights what you plan to do for your SEO marketing strategy . This could include tactics for website on-page optimization , off-page optimization using AI SEO , and link building using an SEO PowerSuite backlink API for quick backlink profile checks.

This SEO marketing plan example discusses in detail the target audience of the business and the SEO plan laid out in different stages:

4. Social media marketing plan

Your social media marketing plan presents what you’ll do to reach your marketing goal through social media. This could include tactics specific to each social media channel that you own, recommendations on developing a new channel, specific campaigns you want to run, and so on, like how B2B channels use Linkedin to generate leads with automation tools and expand their customer base; or like making use of Twitter walls that could display live Twitter feeds from Twitter in real-time on digital screens.

Edit this social media marketing plan example easily with Venngage’s drag-and-drop editor:

5. Demand generation marketing plan

This could cover your paid marketing strategy (which can include search ads, paid social media ads, traditional advertisements, etc.), email marketing strategy and more. Here’s an example:

1. Free marketing plan template

Here’s a free nonprofit marketing plan example that is ideal for organizations with a comprehensive vision to share. It’s a simple plan that is incredibly effective. Not only does the plan outline the core values of the company, it also shares the ideal buyer persona.

Note how the branding is consistent throughout this example so there is no doubt which company is presenting this plan. The content plan is an added incentive for anyone viewing the document to go ahead and give the team the green light.

2. Pastel social media marketing campaign template

Two-page marketing plan samples aren’t very common, but this free template proves how effective they are. There’s a dedicated section for business goals as well as for project planning .

The milestones for the marketing campaign are clearly laid out, which is a great way to show how organized this business strategy is.

3. Small business marketing strategy template

This marketing plan template is perfect for small businesses who set out to develop an overarching marketing strategy for the whole year:

Notice how this aligns pretty well with the marketing plan outline we discussed in previous sections.

In terms of specific tactics for the company’s marketing strategy, the template only discusses SEO strategy, but you can certainly expand on that section to discuss any other strategies — such as link building , that you would like to build out a complete marketing plan for.

4. Orange simple marketing proposal template

Marketing plans, like the sample below, are a great way to highlight what your business strategy and the proposal you wan to put forward to win potential customers.

5. One-page marketing fact sheet template

This one-page marketing plan example is great for showcasing marketing efforts in a persuasive presentation or to print out for an in-person meeting.

Note how the fact sheet breaks down the marketing budget as well as the key metrics for the organization. You can win over clients and partners with a plan like this.

6. Light company business fact sheet template

This one-page sample marketing plan clearly outlines the marketing objectives for the organization. It’s a simple but effective way to share a large amount of information in a short amount of time.

What really works with this example is that includes a mission statement, key contact information alongside all the key metrics.

7. Marketing media press kit template

This press kit marketing plan template is bright and unmistakable as belonging to the Cloud Nine marketing agency . The way the brand colors are used also helps diversify the layouts for each page, making the plan easier to read.

We like the way the marketing department has outlined the important facts about the organization. The bold and large numbers draw the eye and look impressive.

8. Professional marketing proposal template

Start your marketing campaign on a promising note with this marketing plan template. It’s short, sharp and to the point. The table of contents sets out the agenda, and there’s a page for the company overview and mission statement.

9. Social media marketing proposal template

A complete marketing plan example, like the one below, not only breaks down the business goals to be achieved but a whole lot more. Note how the terms and conditions and payment schedule are included, which makes this one of the most comprehensive marketing plans on our list.

What should marketing plans include?

Marketing plans should include:

• A detailed analysis of the target market and customer segments.
• Clear and achievable marketing objectives and goals.
• Strategies and tactics for product promotion and distribution.
• Budget allocation for various marketing activities.
• Timelines and milestones for the implementation of marketing strategies.
• Evaluation metrics and methods for tracking the success of the marketing plan.

What is an executive summary in a marketing plan and what is its main goal?

An executive summary in a marketing plan is a brief overview of the entire document, summarizing the key points, goals, and strategies. Its main goal is to provide readers with a quick understanding of the plan’s purpose and to entice them to read further.

What are the results when a marketing plan is effective?

When a marketing plan is effective, businesses can experience increased brand visibility, higher customer engagement, improved sales and revenue, and strengthened customer loyalty.

What is the first section of a marketing plan?

The first section of a marketing plan is typically the “Executive Summary,” which provides a concise overview of the entire plan, including the business’s goals and the strategies to achieve them.

Now that you have the basics for designing your own marketing plan, it’s time to get started:

More marketing design guides and templates:

• Marketing Infographics: The Definitive Guide [Includes Infographic Templates]
• 20+ Business Pitch Deck Templates to Win New Clients and Investors
• 20+ White Paper Examples [Design Guide + White Paper Templates]
• The Evolution of Marketing [Timeline Infographic]

What is a Business Plan? Definition, Tips, and Templates

Published: June 07, 2023

In an era where more than 20% of small enterprises fail in their first year, having a clear, defined, and well-thought-out business plan is a crucial first step for setting up a business for long-term success.

Business plans are a required tool for all entrepreneurs, business owners, business acquirers, and even business school students. But … what exactly is a business plan?

In this post, we'll explain what a business plan is, the reasons why you'd need one, identify different types of business plans, and what you should include in yours.

What is a business plan?

A business plan is a documented strategy for a business that highlights its goals and its plans for achieving them. It outlines a company's go-to-market plan, financial projections, market research, business purpose, and mission statement. Key staff who are responsible for achieving the goals may also be included in the business plan along with a timeline.

The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.

What is a business plan used for?

The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.

Business Plan Template [ Download Now ]

Working on your business plan? Try using our Business Plan Template . Pre-filled with the sections a great business plan needs, the template will give aspiring entrepreneurs a feel for what a business plan is, what should be in it, and how it can be used to establish and grow a business from the ground up.

Purposes of a Business Plan

Chances are, someone drafting a business plan will be doing so for one or more of the following reasons:

1. Securing financing from investors.

Since its contents revolve around how businesses succeed, break even, and turn a profit, a business plan is used as a tool for sourcing capital. This document is an entrepreneur's way of showing potential investors or lenders how their capital will be put to work and how it will help the business thrive.

All banks, investors, and venture capital firms will want to see a business plan before handing over their money, and investors typically expect a 10% ROI or more from the capital they invest in a business.

Therefore, these investors need to know if — and when — they'll be making their money back (and then some). Additionally, they'll want to read about the process and strategy for how the business will reach those financial goals, which is where the context provided by sales, marketing, and operations plans come into play.

2. Documenting a company's strategy and goals.

A business plan should leave no stone unturned.

Business plans can span dozens or even hundreds of pages, affording their drafters the opportunity to explain what a business' goals are and how the business will achieve them.

To show potential investors that they've addressed every question and thought through every possible scenario, entrepreneurs should thoroughly explain their marketing, sales, and operations strategies — from acquiring a physical location for the business to explaining a tactical approach for marketing penetration.

These explanations should ultimately lead to a business' break-even point supported by a sales forecast and financial projections, with the business plan writer being able to speak to the why behind anything outlined in the plan.

Free Business Plan Template

The essential document for starting a business -- custom built for your needs.

• Outline your idea.
• Pitch to investors.
• Secure funding.
• Get to work!

You're all set!

Click this link to access this resource at any time.

Free Business Plan [Template]

Fill out the form to access your free business plan., 3. legitimizing a business idea..

Everyone's got a great idea for a company — until they put pen to paper and realize that it's not exactly feasible.

A business plan is an aspiring entrepreneur's way to prove that a business idea is actually worth pursuing.

As entrepreneurs document their go-to-market process, capital needs, and expected return on investment, entrepreneurs likely come across a few hiccups that will make them second guess their strategies and metrics — and that's exactly what the business plan is for.

It ensures an entrepreneur's ducks are in a row before bringing their business idea to the world and reassures the readers that whoever wrote the plan is serious about the idea, having put hours into thinking of the business idea, fleshing out growth tactics, and calculating financial projections.

4. Getting an A in your business class.

Speaking from personal experience, there's a chance you're here to get business plan ideas for your Business 101 class project.

If that's the case, might we suggest checking out this post on How to Write a Business Plan — providing a section-by-section guide on creating your plan?

What does a business plan need to include?

• Business Plan Subtitle
• Executive Summary
• Company Description
• The Business Opportunity
• Competitive Analysis
• Target Market
• Marketing Plan
• Financial Summary
• Funding Requirements

1. Business Plan Subtitle

Every great business plan starts with a captivating title and subtitle. You’ll want to make it clear that the document is, in fact, a business plan, but the subtitle can help tell the story of your business in just a short sentence.

2. Executive Summary

Although this is the last part of the business plan that you’ll write, it’s the first section (and maybe the only section) that stakeholders will read. The executive summary of a business plan sets the stage for the rest of the document. It includes your company’s mission or vision statement, value proposition, and long-term goals.

3. Company Description

This brief part of your business plan will detail your business name, years in operation, key offerings, and positioning statement. You might even add core values or a short history of the company. The company description’s role in a business plan is to introduce your business to the reader in a compelling and concise way.

4. The Business Opportunity

The business opportunity should convince investors that your organization meets the needs of the market in a way that no other company can. This section explains the specific problem your business solves within the marketplace and how it solves them. It will include your value proposition as well as some high-level information about your target market.

5. Competitive Analysis

Just about every industry has more than one player in the market. Even if your business owns the majority of the market share in your industry or your business concept is the first of its kind, you still have competition. In the competitive analysis section, you’ll take an objective look at the industry landscape to determine where your business fits. A SWOT analysis is an organized way to format this section.

6. Target Market

Who are the core customers of your business and why? The target market portion of your business plan outlines this in detail. The target market should explain the demographics, psychographics, behavioristics, and geographics of the ideal customer.

7. Marketing Plan

Marketing is expansive, and it’ll be tempting to cover every type of marketing possible, but a brief overview of how you’ll market your unique value proposition to your target audience, followed by a tactical plan will suffice.

Think broadly and narrow down from there: Will you focus on a slow-and-steady play where you make an upfront investment in organic customer acquisition? Or will you generate lots of quick customers using a pay-to-play advertising strategy? This kind of information should guide the marketing plan section of your business plan.

8. Financial Summary

Money doesn’t grow on trees and even the most digital, sustainable businesses have expenses. Outlining a financial summary of where your business is currently and where you’d like it to be in the future will substantiate this section. Consider including any monetary information that will give potential investors a glimpse into the financial health of your business. Assets, liabilities, expenses, debt, investments, revenue, and more are all useful adds here.

So, you’ve outlined some great goals, the business opportunity is valid, and the industry is ready for what you have to offer. Who’s responsible for turning all this high-level talk into results? The "team" section of your business plan answers that question by providing an overview of the roles responsible for each goal. Don’t worry if you don’t have every team member on board yet, knowing what roles to hire for is helpful as you seek funding from investors.

10. Funding Requirements

Remember that one of the goals of a business plan is to secure funding from investors, so you’ll need to include funding requirements you’d like them to fulfill. The amount your business needs, for what reasons, and for how long will meet the requirement for this section.

Types of Business Plans

• Startup Business Plan
• Feasibility Business Plan
• Internal Business Plan
• Strategic Business Plan
• Business Acquisition Plan
• Business Repositioning Plan
• Expansion or Growth Business Plan

There’s no one size fits all business plan as there are several types of businesses in the market today. From startups with just one founder to historic household names that need to stay competitive, every type of business needs a business plan that’s tailored to its needs. Below are a few of the most common types of business plans.

For even more examples, check out these sample business plans to help you write your own .

1. Startup Business Plan

As one of the most common types of business plans, a startup business plan is for new business ideas. This plan lays the foundation for the eventual success of a business.

The biggest challenge with the startup business plan is that it’s written completely from scratch. Startup business plans often reference existing industry data. They also explain unique business strategies and go-to-market plans.

Because startup business plans expand on an original idea, the contents will vary by the top priority goals.

For example, say a startup is looking for funding. If capital is a priority, this business plan might focus more on financial projections than marketing or company culture.

2. Feasibility Business Plan

This type of business plan focuses on a single essential aspect of the business — the product or service. It may be part of a startup business plan or a standalone plan for an existing organization. This comprehensive plan may include:

• A detailed product description
• Market analysis
• Technology needs
• Production needs
• Financial sources
• Production operations

According to CBInsights research, 35% of startups fail because of a lack of market need. Another 10% fail because of mistimed products.

Some businesses will complete a feasibility study to explore ideas and narrow product plans to the best choice. They conduct these studies before completing the feasibility business plan. Then the feasibility plan centers on that one product or service.

3. Internal Business Plan

Internal business plans help leaders communicate company goals, strategy, and performance. This helps the business align and work toward objectives more effectively.

Besides the typical elements in a startup business plan, an internal business plan may also include:

• Department-specific budgets
• Target demographic analysis
• Market size and share of voice analysis
• Action plans
• Sustainability plans

Most external-facing business plans focus on raising capital and support for a business. But an internal business plan helps keep the business mission consistent in the face of change.

4. Strategic Business Plan

Strategic business plans focus on long-term objectives for your business. They usually cover the first three to five years of operations. This is different from the typical startup business plan which focuses on the first one to three years. The audience for this plan is also primarily internal stakeholders.

These types of business plans may include:

• Relevant data and analysis
• Assessments of company resources
• Vision and mission statements

It's important to remember that, while many businesses create a strategic plan before launching, some business owners just jump in. So, this business plan can add value by outlining how your business plans to reach specific goals. This type of planning can also help a business anticipate future challenges.

5. Business Acquisition Plan

Investors use business plans to acquire existing businesses, too — not just new businesses.

A business acquisition plan may include costs, schedules, or management requirements. This data will come from an acquisition strategy.

A business plan for an existing company will explain:

• How an acquisition will change its operating model
• What will stay the same under new ownership
• Why things will change or stay the same
• Acquisition planning documentation
• Timelines for acquisition

Additionally, the business plan should speak to the current state of the business and why it's up for sale.

For example, if someone is purchasing a failing business, the business plan should explain why the business is being purchased. It should also include:

• What the new owner will do to turn the business around
• Historic business metrics
• Sales projections after the acquisition
• Justification for those projections

6. Business Repositioning Plan

When a business wants to avoid acquisition, reposition its brand, or try something new, CEOs or owners will develop a business repositioning plan.

This plan will:

• Acknowledge the current state of the company.
• State a vision for the future of the company.
• Explain why the business needs to reposition itself.
• Outline a process for how the company will adjust.

Companies planning for a business reposition often do so — proactively or retroactively — due to a shift in market trends and customer needs.

For example, shoe brand AllBirds plans to refocus its brand on core customers and shift its go-to-market strategy. These decisions are a reaction to lackluster sales following product changes and other missteps.

7. Expansion or Growth Business Plan

When your business is ready to expand, a growth business plan creates a useful structure for reaching specific targets.

For example, a successful business expanding into another location can use a growth business plan. This is because it may also mean the business needs to focus on a new target market or generate more capital.

This type of plan usually covers the next year or two of growth. It often references current sales, revenue, and successes. It may also include:

• SWOT analysis
• Growth opportunity studies
• Financial goals and plans
• Marketing plans
• Capability planning

These types of business plans will vary by business, but they can help businesses quickly rally around new priorities to drive growth.

Getting Started With Your Business Plan

At the end of the day, a business plan is simply an explanation of a business idea and why it will be successful. The more detail and thought you put into it, the more successful your plan — and the business it outlines — will be.

When writing your business plan, you’ll benefit from extensive research, feedback from your team or board of directors, and a solid template to organize your thoughts. If you need one of these, download HubSpot's Free Business Plan Template below to get started.

Editor's note: This post was originally published in August 2020 and has been updated for comprehensiveness.

Don't forget to share this post!

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What are market trends in a business plan?

Table of Contents

What are market trends?

Why do i need market trends in my business plan, how to keep up with market trends, what market trends to monitor frequently, customer behaviours, technological advances, industry regulations, how to write the market trends in your business plan, using countingup to streamline your business.

Market trends in a business plan are key pieces of information that share where your company sits in the wider picture of your industry. Your business plan should prove why your business is viable, show where you fit in the market and what customers you serve. Examining what the market looks like is a smart business move when starting out.

This article on market trends in a business plan will cover:

• What are market trends
• Why market trends are necessary in my business plan

Market trends are the direction changes of a specific industry and can be influenced by customer behaviours or developing technology. 

Take the mobile phone industry for example, as technology has improved over the last twenty years consumers have moved from bulky handsets to slimmer smartphones, that can do everything a computer can and more. Consumers have even gone back to the fashion of flip phones now that technology has allowed a bigger screen that can be folded to save space. This is a good example where both technology and customer demand has influenced the direction of the industry,

Acknowledging these trends when running a business ensures that you stay on the same path as the industry itself, moving with customer needs and adapting your business as the sector and technology evolve. Ignoring market trends in the long term could mean you are left behind by customers, as they may move to businesses that meet their needs more. 

Your market trend research should be part of wider market analysis in your business plan. Understanding where you fit in a sector and what separates your company from competitors will help you shape everything from your product to pricing and marketing plans.

It’s important to focus on trends in this process so you can understand what appeals to your target audience. By analysing the market landscape and trends, you will be able to serve your customers better. It will also feed into your marketing messaging and content creation strategy later on.

A market and trend analysis should be both quantitative (using numbers and statistics such as projections and financial forecasts) and qualitative (based on experience or observation). Trends will fit into both categories of research and you should be able to find data and non-numerical information to support your examination of trends when writing your business plan. 

It’s important to remember that a business plan is not set in stone. It can be a document that you regularly update to reflect changes in your industry and company.

Keeping pace in a fast-changing market is not easy – after all, you’ve got a business to run. Using social media and subscribing to relevant industry emails make it simpler to get the information you need. Doing this will allow you to stay on top of market trends to include in your initial business plan and for more long-term future planning. 

Follow influencers in your industry to see what they talk about and how they create content for the audience that you serve. This will give you an idea of what resonates with your target customers when it comes to content and the form of content the influencer tends to use (video, written blogs, imagery etc.).

Read relevant publications in your sector to find out what is making headlines. Magazines or online blogs that share up-to-date opinions and thought leadership (influential content) will help you stay on the pulse of what is currently important to the industry.

Reading detailed reports and research can be time-consuming but will give you a good overview of the industry’s current state and any new developments. You can then update your business plan to follow the trends that arise from any data you’ve seen. 

Some common areas will affect the running of your business, the trends in your business plan and the whole market landscape. Keeping on top of the following aspects and regularly checking in on them will ensure your business develops as the market does.

Your customer can make or break your business. If you don’t cater to their needs and wants, your business will not be on the radar of your target audience. 

Let’s take an example – if your target customer is under 45, and you primarily do business online, you will need to ensure your website is optimised for mobile. This is because consumer behaviours have changed in recent years, and most searches are now conducted via mobile . If you don’t pick up on this development, your business risks being left behind when competitors optimise for mobile and you don’t.

Like our previous example, customer behaviour often changes with advances in technology. As mobile phones, and then smartphones, have become more able to operate as a computer, consumers have moved to using their phones out of convenience. 

Keep on top of developments that are relevant to your business and make sure you can move with, and not against, the technology changes.

Every now and again, there will be a law change or new regulation that rocks many industries – such as GDPR in 2018. Staying up to date with regulations that could affect the way you run and market your business will save you weighty fines (especially in the case of data protection).

There may be more frequent regulation updates if you operate in an industry that requires you to follow safety guidelines or best practices, such as those that an electrician or builder will have to follow. 

Ensuring that you are up to date on precautions and rules, as well as renewing any professional certifications you need to operate, will ensure your business plan reflects the changing face of your industry.

Using your research on your target customers and the sector,  use the following steps to write up the market trends section of your business plan:

• Current market overview, including which company has the biggest share or most influence
• Where you fit in that market, what gives your business a competitive edge.
• Current trends that impact your business operation
• Any upcoming trends that may impact your business or the products/services you offer
• Outline any plans on how you will keep up with trends
• Upcoming regulatory changes

You can then follow this with your competitor research in your business plan, to give a full picture of your industry and where you fit in.

Now that you have the answers to questions like ‘what are market trends in a business plan’, you will be able to prepare a thorough market analysis to set up your new venture for success. 

Countingup can help your new business by making your business accounting simple, too. Countingup is the business account with built-in accounting software. The app is helping thousands of business owners across the UK save time and money by automating the time consuming parts of accounting. Find out more here and get started today.

• Counting Up on Facebook
• Counting Up on Twitter
• Counting Up on LinkedIn

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Target Market Examples

Elon Glucklich

7 min. read

Updated April 24, 2024

Imagine your dream is to own a diner.

You have restaurant experience and a great location in mind – you just need the bank to approve your loan to get started.

But the bank has questions. A big one it wants answered is: who is your target market?

It might be tempting just to say, “hungry diners.” But you’ll need to dig deeper to truly define your target market . 

In this article, we’ll use this diner scenario to walk through the market research process and illustrate what the final result could look like.

• Questions about your target market

Before you even set foot in the bank, you should already have asked – and taken steps to answer – several key questions about your target market.

Let’s call our example business the Bplans Diner. Where is that perfect location you’ve found for the diner? Is it in a densely populated urban area, suburban neighborhood, or rural?

What are your hours of operation? Some diners cater to a breakfast crowd, while others might offer 24-hour dining to be a favorite among night owls. When you expect your peak hours could help determine whether you should expect to sell more omelets or hamburgers.

What’s the area’s median income, and what types of businesses or institutions are nearby? This information will help you determine pricing and marketing strategies for your diner. For instance, if your diner is located in a business district, you may want to offer lunch specials. But if it’s near a college or university, you might want to offer student discounts.

This is what a thorough target market analysis looks like, providing key insights and data to pinpoint the specific groups of customers most likely to patronize your diner. Gathering all of this information may sound intimidating, but it’s really just a matter of doing research. If you need help and guidance, check out our complete guide to conducting market research for your business . 

Let’s look at an example of a target market analysis for this diner. Then, we’ll break it down and discuss each element in detail.

• Example of a target market analysis

As you can see, the target market analysis follows the basic market segmentation process of splitting out potential customers into their demographic, geographic, psychographic and behavioral traits.

Next, let’s take a look at each in more detail. Afterward, we’ll look at how you can harness your target market analysis into actual business strategies.

• Demographic

You may have noticed that the demographic analysis in our example is very broad – 18 to 65 years old, including students, workers, and some seniors.

Finding your target market isn’t always about identifying a narrow demographic to cater to. In the case of a restaurant, it makes sense to focus on the geographic location and who currently frequents the area (more on that in the next section).

A different approach may be needed for a technology product that’s sold online. In that case, narrowing the demographic focus to specific age ranges or needs would be much more important than where the business is located.

In the case of the diner, we reached our decision by conducting a demographic analysis, examining the age ranges, occupations, and other concrete data points about potential customers near the proposed location (Reminder: we didn’t do this for the Bplans Diner, we’re just providing an example). 

There are several ways to go about collecting this information for your business. The most straightforward is to get out in the neighborhood, take a look around and talk to people. Are you mostly seeing students, or families? Are there a lot of office workers in the area? 

You can also look up data from the U.S. Census Bureau , which includes population, age, income and other useful information, often down to the neighborhood level.

After conducting this research, one valuable step is to create a detailed customer persona that represents the typical customer you expect for your business (we provide an example of a customer persona for the diner further down in this article).

While the demographic analysis considers the type of people who might frequent your business, the geographic analysis considers the characteristics of the neighborhood itself. 

Our target market analysis for Bplans Diner noted that we plan to operate in an urban area near a university with heavy foot traffic and expect a fair amount of late-night diners.

A key reason for examining the geographic makeup of your businesses is to size up your competition. If there’s already a popular diner in the area you plan to target, getting customers could be a major challenge. But if there’s a lack of dining options or no one is serving diner-style food, you’re more likely to be successful. Determining the size of your market will help you create reasonable revenue projections. 

We also mentioned the plan for Bplans Diner to cater to a late-night crowd. Examining the geographic makeup of the neighborhood will help you determine if there are the kinds of businesses – bars, music venues, or businesses such as hospitals where people are working all hours – to justify targeting this group.

• Psychographic

You know the demographics and geographic characteristics of your market. Now it’s time to consider the attitudes and values of your potential customers.

The psychographic analysis helps to understand the lifestyle of potential customers and how that might affect their preferences as consumers. If many of your potential customers are health-conscious, for instance, you’ll want to ensure your diner provides options like salads or gluten-free menu items. But if most customers are families looking for a place to bring their children, it may be important to keep classic items like hamburgers and french fries on the menu.

The best way to understand your potential customers’ attitudes is to get out and talk to them. Customer interviews are among the most powerful methods of validating a business idea , since you’ll get honest, real-time feedback from the kinds of people your business would depend on.

Finally, the behavioral analysis expands on customer psychographics by examining what customers do, given their values. This is another place where it’s worth considering the broad demographics of the diner’s target market – 18 to 65 years old, split among students, workers, and seniors.

They may all want the diner’s food, but their behaviors will vary widely. College students might be looking for a late-night study spot, or a place to meet up with friends for dinner before a concert or sporting event. But workers and seniors might be more interested in breakfast or lunch specials. 

Each of these behaviors gives a business owner valuable information to target individual segments of their target audience. For instance, you might want to play popular music in the evenings to get young diners ready for a night out on the town. But you’ll want a quieter ambiance at the time of day when seniors are most likely to come in. The environment can be adjusted based on when certain customers frequent the business.

Addressing behavioral aspects like buying motivations and concerns of your potential customers will also help you effectively market your diner. For example, you could create marketing campaigns based on student discounts, late-night specials, or a family-friendly atmosphere, depending on your customers’ behaviors.

• Connecting a target market analysis to business strategy

So far, we’ve touched on each of the components of a target market analysis for a diner: customer demographics, geographics, psychographics, and behaviors. (It’s also important to conduct an industry analysis to understand competitive and macroeconomic forces affecting your planning.)

With the target market analysis complete, you’re better equipped to demonstrate a thorough understanding of your customers to a lender.

Here are a few insights a business owner could use for the Bplans Diner, developed through the above analysis.

• Bplans Diner Competitive Analysis

Market Trends: Growing demand for late-night food options, increasing preference for healthy dining options.

Competitor Strengths and Weaknesses:

Competitor A: Strong brand but limited menu options.

Competitor B: Wide variety of options but lacking in ambiance.

• Bplans Diner Marketing Strategy

Product Differentiation: Offering a diverse menu that caters to various preferences, including healthy options.

Positioning: Establishing Bplans Diner as a reliable, quality, 24-hour dining option in the region.

Promotion: Utilizing social media to announce special night-time deals and promotions.

• Get started with your business plan template

A target market analysis is a key part of any business plan. But it’s just one piece. At Bplans, we take some of the pain out of business planning. We’ve developed a free business planning template to help reduce entrepreneurs’ time to create a full, lender-ready business plan. Bplans has also collected over 550 free sample business plans across numerous industries. Find a plan in your industry to get inspiration for your plan.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Elon is a marketing specialist at Palo Alto Software, working with consultants, accountants, business instructors and others who use LivePlan at scale. He has a bachelor's degree in journalism and an MBA from the University of Oregon.

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How to Conduct an Industry Analysis

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How to Use TAM, SAM, SOM to Determine Market Size

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How to Write a Customer Analysis

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How to Create a Detailed User or Buyer Persona

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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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Biden's new student loan forgiveness plan would cost an extra $84 billion: report

Eliminating unpaid interest on student loans alone costs approximately $58 billion.

Much of the new plan is already covered under SAVE, but key new provisions raise the price tag considerably. ( iStock )

President Joe Biden's new student debt elimination proposal would bring relief for millions more Americans, but a Penn Wharton Budget Model (PWBM)  analysis  shows it could add another $84 billion to an already costly plan.

The Biden Administration  released a formal proposal  to provide student debt relief to over 30 million borrowers. The new plan also proposes to eliminate accrued interest for 23 million borrowers and automatically discharge debt for borrowers eligible for loan forgiveness under SAVE, closed school discharge or other forgiveness programs, even if not enrolled. Additionally, student debt for borrowers who entered repayment for 20 or more years would be discharged. The plan would also provide relief to borrowers who experience hardship in paying back their loans.

"These distinct forms of debt relief are designed for borrowers struggling with their loans – and that's a lot of people," Under Secretary of Education James Kvaal said. "There are 25 million borrowers whose interest is growing faster than they can pay it down. That fact alone shows how badly President Biden's student loan relief is needed."

PWBM said that the new plan would cost an extra $84.06 billion on top of the $475 billion price tag for the Saving on a Valuable Education (SAVE) Plan, bringing the total cost to around $559 billion for both plans. 

The biggest cost of the plan is waiving up to $20,000 for millions of borrowers whose balances have grown because of unpaid interest. That part of the plan is estimated to cost roughly $58 billion. The second-largest cost, $19 billion, stems from eliminating student debt for borrowers in repayment for 20 years or more (or 25 years with graduate student debt). 

Private student loan borrowers can't benefit from federal loan relief. But you could lower your monthly payments by refinancing to a lower interest rate. Visit Credible to speak with an expert and get your questions answered. 

BUY A HOME IN THESE STATES TO GET STUDENT LOAN DEBT RELIEF

Student loan cancellation keeps coming

More people are becoming eligible for student loan cancellation as they hit 10 years of payments. Since the launch of SAVE, nearly 8 million borrowers have received relief, including 4.5 million with a $0 monthly payment. Student loan forgiveness has reached millions even as the  Supreme Court blocked Biden's original debt forgiveness plan  last June.  

The latest round of cancellations targets $7.4 billion in student loans for 277,000 borrowers, the Department of Education said in a  statement . This brings the total debt forgiven over Biden's presidency to $153 billion.  

Biden's SAVE plan could lower borrowers' monthly payments to zero dollars, reduce monthly costs in half and save those who make payments at least $1,000 yearly. Yet roughly three out of four borrowers who make $75,000 or less annually, and would benefit from the SAVE plan, still need to be enrolled, according to a recent Student Debt Crisis Center (SDCC)  survey .

If you can qualify for a student loan refinance at a lower rate than you're currently paying, there are usually no downsides to refinancing. You can use Credible to compare student loan refinancing rates from multiple private lenders at once without affecting your credit score.

HOMEOWNERS COULD SAVE TENS OF THOUSANDS IN DAMAGES BY USING SMART DEVICES

Biden student loan forgiveness plan faces legal challenge

Republican-led states  filed suit  against President Joe Biden and the U.S. Department of Education to stop the SAVE Plan. A total of 18 states have joined one of two lawsuits challenging the plan.

The lawsuits seek to halt the SAVE plan immediately, arguing that the U.S. Department of Education has no authority to alter student loan repayment plans. This would cancel more than $156 billion in student loan debt .  

The lawsuit also argues that the U.S. Supreme Court determined that Biden's original forgiveness program violated federal law and that only Congress can authorize the forgiveness of student loans involving taxpayer money. 

A  statement from the Education Department  said Congress gave the agency the authority to define the terms of income-driven repayment plans.

If you hold private student loans, you won't be enrolled in a federal income-driven repayment plan, but you could refinance your loans to a lower rate. Visit Credible to compare options from different lenders without affecting your credit score.

MORTGAGE LOAN LIMIT RISES ABOVE $1.1M AS HOME PRICES SURGE

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at  [email protected]  and your question might be answered by Credible in our Money Expert column.

Trump 2.0 would be destructive for the economy, as the former president embraces 'crank' doctrine and economic fantasy, Paul Krugman says

• Trump's re-election could bring loads of problems to the US economy, Paul Krugman warned.
• The former president is prone to "magical thinking" and could pursue "destructive" policies, Krugman said.
• Inflation in particular could get worse if Trump imposes tariffs and erodes the Fed's independence.

Trump's re-election would not be good news for the US economy. Blame the former president's "quack" economic policy and his tendency to deny reality, according to Nobel economist Paul Krugman.

Krugman wrote in an op-ed for The New York Times this week on Trump's propensity for "magical thinking," the same way of thinking that led Latin American dictatorships to pursue reckless and inflationary monetary policy in the 1970s and '80s.

Similar "destructive" policies could be re-enacted in the US if Trump is re-elected in November, Krugman said. 

Related stories

"His behavior during the COVID-19 pandemic showed that he's as addicted to magical thinking and denial of reality as any petty strongman or dictator, which makes it all too likely that he might preside over the type of problems that result when policies are based on quack economics," Krugman wrote.

Some of Trump's economic policies during his presidency were flawed, Krugman said. He pointed, for instance, to Trump's tax cuts in 2017, which ended up favoring the rich over working-class Americans.

If re-elected, Trump has said he plans on cracking down on immigration and imposing tariffs on US imports , especially those from China. But those are deeply flawed ideas about what it would take to bolster US economic strength, Krugman said, as immigration has been key to robust growth in recent years, while high tariffs could easily stoke inflation. 

Inflation could also get worse if Trump looks to exert control over the Federal Reserve, Krugman warned. He pointed to recent reports that suggested Trump's advisors were looking to reduce the independence of the Fed, putting the former president more in control of monetary policy. Presumably, that's to "juice the economy and the stock market the way he wanted to in 2019," Krugman said.

"What's really worrisome, however, are indications that a future Trump regime would manipulate monetary policy in pursuit of short-run political advantage, justifying its actions with crank economic doctrines ... The details of these bad ideas are probably less important than the mindset they reveal, one that rejects hard-learned lessons from the past and buys into economic fantasies," Krugman added.

Other economists have warned of potential chaos if Trump is re-elected as president. Top economist Nouriel Roubini said recently a second term for Trump would be one of the biggest risks for the world economy , making inflation and debt worse while hobbling economic growth. 

Watch: The biggest revelations from Trump's tax returns

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Oil falls for a third day on Middle East ceasefire hopes

Oil fell more than 1% on Wednesday, losing ground for a third straight session, sapped by the prospect of a ceasefire agreement in the Middle East and persistent U.S. inflation dampening the expected pace of interest rate cuts.

PPL Corp reported first-quarter results ahead of analysts' estimates on Wednesday as the electricity and natural gas utility benefited from lower operating costs and higher transmission revenue.