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What is a Market Profile? - Definition & Example

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  • 0:00 What Is A Market Profile?
  • 0:15 Creating A Market Profile
  • 1:05 Market Profile Example
  • 1:20 Market Profiles In…
  • 2:35 Lesson Summary
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Lesson Transcript
Instructor: Michael Cozad

Michael is a financial planner and has a master's degree in financial services.

This lesson defines and explores the concept of a market profile. Practical examples are incorporated into the lesson to further your understanding of how market profiles are used in business and economics.

What is a Market Profile?

A market profile is a set of attributes relating to a target population, and in business, a target group of buyers. These characteristics typically include demographic factors such as income, geographic factors such as region, and psychographic factors such as values.

Creating a Market Profile

Let's assume a company based in Ohio, Grandma's Pies, is developing their marketing plan for the next year. The marketing plan calls for Grandma's Pies' market profile. Grandma's Pies must first identify their target market. A target market is a group of people whose needs match the product or service of an organization and subsequently to whom the products or services are marketed.

As the name implies, Grandma's Pies are homemade and are meant to target those who desire a fresh tasting pie. Furthermore, Grandma's research shows that the average buyer of a pie is a married woman between 50 and 70 years old. Grandma's Pies has several employees and two locations in central Ohio. According to research, most 50 to 70 year old married women reside in this area. The target market has now been identified.

Market Profile Example

The market profile for Grandma's Pies further breaks down the target market. Grandma's has identified the following characteristics for their target market, which together constitute the market profile.

Demographic:
Gender: Female
Marital Status: Married
Age Group: 50 to 70 years old
Income: $50,000-$75,000 per year

Geographic:
City: Columbus
State: Ohio

Psychographic:
Buyers value home-cooked meals and desserts

Market Profile in a Marketing Plan

In a marketing plan, Grandma's Pies may summarize the market profile data in a list or table as shown above, or they may turn the list into something that resembles an essay format. For example, a marketer may write the following into a plan:

Grandma's Pies' ideal buyer is a married woman aged 50 - 70 years old with a household income of $50,000 - $75,000 per year. Our ideal buyer resides in or around Columbus, Ohio near our current business locations. The majority of pie purchasers value home-cooked meals and desserts. It's our intention to market and sell to these women who desire our products.

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