Your Target Market Share…What Is It?

What in the world does culture, religion and ethnicity have to do with monuments? A lot, actually! Several years ago I attended an MBNA convention and met an individual who operated a monument company in a larger city. Knowing that cities have SO many different cultural, religious and ethnic groups, I asked them if there is a group they tend to service more than others.

And their response surprised me.

They noted the majority of clients they serve tend to be African American. Then they went on to say their largest referral source was their local, African American funeral homes.

My first thought was, “What? There are African American funeral homes?”

But, when you think about human nature, it would seem to be true that people prefer to do business with organizations they find to be relatable. It is not a racism thing at all– simply a preference in where one feels most comfortable doing business.

The same can be true of small business owners. We often tend to think everyone is just like us. Which often times means our target market acts, looks and lives just like us.

And this begs one question: how do we estimate market share for a more defined target market such as this?

Target Market Groups

In this post we visit the concept of calculating general market share for an area’s entire population. But now we want to drill down and look at various groups of people and see how our market share fares.

Step 1: Gathering the Data

The odds are that you already know who your clients are. If I were to ask you to physically describe your average client, you can likely provide a description including their geography, race, ethnicity, cultural background, income, etc.

But what percentage of your overall market share is represented by your average client? This is important information, as it will help us determine the share of your target market that you own.

To start, we will go to the US Census Bureau website. The US Census Bureau is a great resource because the data is reliable and communicated in a multitude of usable ways.

If you scroll down you will see a heading that says Data Tools and a box showing “Quick Facts”. That is what we are looking for.

After you click on the Quick Facts, you will enter the county and state which you area searching for. I have circled the area for your below.

I am entering Dallas County, Texas, to build on this previous example. If you are using multiple counties or cities, you will need to enter them one at a time.

The great thing about the page that populates (seen above), is that you can export it to Excel! If you don’t already know, I am a HUGE fan of Microsoft Excel and love nothing more than a good spreadsheet.

There are other great spreadsheet programs out there such as Google Sheets. Getting this information into a spreadsheet program that you feel comfortable working with makes the data easier to use.

So first we want to export this data to a spreadsheet by clicking the little pie shape circled in red in the image below.

After formatting the spreadsheet a little for ease of use, it will look like the spreadsheet below. You will notice I highlighted the population that corresponds with the population used in this previous blog post.

Step 2: Calculating the Data

The next thing we want to do is add a column for the death rate used in this previous post, as well as a column for the population and for the market.

Then I multiplied the applicable percentages by the total population. For example, I see the Black or African American alone percent is 23.9% of the population of 2,613,539. That means there are 624,635.82 individuals in my geographic area who identify as Black or African American alone (ie no other race).

Then, I take that death rate of .009064 and multiply it by 624,635.82 and come up with a total estimated target market of 5,662 (rounded up because decimals are nutty when talking about people).

So the data tells me my estimated at-need market in the Black or African American community is 5,662.

You can see my example below.

Step 3: Estimating Your Micro Markets

So, next we want to estimate the micro markets in our area. You will recall from this post, that we estimated the cremation rate, burial rate and cremated and buried rates to arrive at an estimated market share of 18%. We will utilize those rates to estimate our micro markets.

To estimate each micro market we will simply add a few columns to our spreadsheet and calculate the total estimated market for each demographic listed. This is our estimated market for each race listed in the census.

Step 4: Estimating our Clientele

So, this is where things get interesting. This is where we have to truly know who our clientele is and be able to quantify them.

Let’s say that, in this fictitious example, we estimate that 60% of our clients are Hispanic and 40% are white, not Hispanic. You’ll recall from our example, that we estimated we make 2500 monuments per year.

40% x 2500= 1,000 sold to target White, Not Hispanic market

60% x 2500 = 1,500 sold to target Hispanic market

Now, there is one thing we need to keep in mind about the Hispanic census information. The term “Hispanic” may encompass both Latino and White peoples. So the Census Bureau lists “Hispanic” and then lists “White, Not Hispanic”. To make things a little more simplistic, you simply deduct the “White, Not Hispanic” population figure from the “Hispanic” figure.

That leaves us with an estimated total market of:

White, Not Hispanic: 2,055

Hispanic: 5,802-2,055= 3,747

Now, using our estimates, we can calculate our total, estimated market share of:

White, Not Hispanic: 1,000 units sold / 2,055 estimated market = 40%

Hispanic: 1,500 units sold / 3,747 estimated market = 40%

Interpreting the Results

This information is incredibly helpful for our pretend company!

We had previously estimated that our fictional company held 18% of the market share. However, if our own demographic estimates are correct, it appears as though we hold an estimated 40% of the Hispanic market share and an estimated 40% of the White, Not Hispanic market share in our geographic area.

This is incredibly valuable information! Why? Because it directs us to where we need to focus our marketing efforts and, thus, our marketing dollars.

So, in this example, because the Hispanic market has a greater, overall potential in this geographic area (3,747 estimated market vs 2,055), and because we only own an estimated 40% of this market, one may reasonably focus marketing efforts here.

Ready? Set? It’s Your Turn!

Calculating your potential and target markets is an important component of marketing. Afterall, if you don’t know your market, you can’t reach them. Give the calculation a try and drop me an email if you get stuck- I am glad to help!

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