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102 Target Market Essay Topic Ideas & Examples

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Identifying your target market is a crucial step in creating a successful marketing strategy. Understanding who your ideal customers are can help you tailor your messaging, products, and services to meet their needs and preferences. To help you pinpoint your target market, we'''ve compiled a list of 102 essay topic ideas and examples to inspire you:

• The impact of generational differences on consumer behavior
• How to effectively target millennials with your marketing efforts
• The importance of understanding the purchasing power of your target market
• Strategies for reaching Gen Z consumers through social media
• The role of culture in shaping consumer preferences
• How to create a marketing campaign that resonates with Baby Boomers
• The influence of gender on consumer decision-making
• The buying habits of affluent consumers
• How to target families with young children
• The rise of eco-conscious consumers and how to appeal to them
• The impact of technology on consumer behavior
• Strategies for targeting busy professionals
• The role of social influencers in reaching your target market
• How to create a marketing campaign that appeals to LGBTQ+ consumers
• The importance of understanding the values and beliefs of your target market
• Strategies for targeting college students
• The buying habits of seniors
• How to reach consumers in rural areas
• The impact of income level on consumer preferences
• Strategies for targeting pet owners
• The influence of lifestyle on purchasing decisions
• How to appeal to health-conscious consumers
• The role of emotions in consumer decision-making
• Strategies for targeting gamers
• The buying habits of beauty enthusiasts
• How to reach consumers who prioritize sustainability
• The impact of social class on consumer behavior
• Strategies for targeting sports fans
• The influence of peer groups on purchasing decisions
• How to appeal to fashionistas
• The importance of understanding the psychographics of your target market
• Strategies for targeting travelers
• The buying habits of foodies
• How to reach consumers who prioritize convenience
• The impact of brand loyalty on consumer behavior
• Strategies for targeting outdoor enthusiasts
• The influence of online reviews on purchasing decisions
• How to appeal to DIY enthusiasts
• The role of nostalgia in consumer preferences
• Strategies for targeting tech-savvy consumers
• The buying habits of book lovers
• How to reach consumers who prioritize ethical sourcing
• The impact of social media on consumer behavior
• The influence of celebrity endorsements on purchasing decisions
• How to appeal to music lovers
• The importance of understanding the needs of your target market
• Strategies for targeting home decorators
• The buying habits of eco-conscious consumers
• How to reach consumers who prioritize quality over price
• The impact of brand image on consumer behavior
• The influence of online advertising on purchasing decisions
• How to appeal to travelers
• The role of customer reviews in shaping consumer preferences
• Strategies for targeting fitness enthusiasts
• The buying habits of tech enthusiasts
• The impact of social proof on consumer behavior
• Strategies for targeting parents of young children
• The influence of user-generated content on purchasing decisions
• The importance of customer testimonials in attracting your target market
• Strategies for targeting outdoor adventurers
• The impact of word-of-mouth marketing on consumer behavior
• Strategies for targeting beauty enthusiasts
• The influence of influencer marketing on purchasing decisions
• The role of personalization in reaching your target market
• Strategies for targeting seniors
• The buying habits of music lovers
• The impact of customer service on consumer behavior
• The influence of loyalty programs on purchasing decisions
• How to appeal to pet owners
• The importance of brand consistency in attracting your target market
• The buying habits of tech-savvy consumers
• The impact of customer experience on consumer behavior
• The influence of social media influencers on purchasing decisions
• The role of storytelling in reaching your target market
• The impact of user experience on consumer behavior
• The influence of online shopping habits on purchasing decisions
• The importance of brand authenticity in attracting your target market
• The buying habits of pet owners
• The impact of customer trust on consumer behavior
• The influence of social responsibility on purchasing decisions

By exploring these essay topic ideas and examples, you can gain valuable insights into your target market and develop a marketing strategy that effectively reaches and engages your ideal customers. Remember, the key to success lies in understanding the needs, preferences, and behaviors of your target market and tailoring your approach accordingly.

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Target market: definition, purpose, examples, & best practices.

11 min read Aiming for your target market with a highly focused marketing strategy is now easier than ever with the support of insights from data and machine learning. Read our in-depth guide to learn how to successfully reach your target market.

What is a target market?

A target market is a subset of the audience you’re aiming to reach (your market). It is made up of a group of customers that have one or more commonalities between them and are most likely to be interested in your products.

These commonalities might be:

• Demographic targeting : They all have common features, such as age, income level, family status, level of disposable income, and marital status
• Psychographic segmentation : They all hold common interests, values, wants, goals, political leanings or lifestyle choices
• Behavioral patterns: They all have common behaviors, such as when they purchase a product or how often they buy
• Geographic segmentation : They are all located in the same region or local area

There are other factors that might group your target market’s members together, and, more often than not, there might be a blend of multiple factors. Keep in mind that there’s also a slight variation if you are looking for B2B customers, as this might include:

• Firmographics: The details about the businesses you’re targeting, such as industry, company size, global or regional spread
• Buying style: The businesses’ buying policies, budgets or stakeholder involvement
• Company behavior: How much they purchase and when, their appetite for risk

Free eBook: 2024 global market research trends report

What is target marketing?

Target marketing is the process of reaching out to particular market segments of your potential customers or your existing audience. This target market is defined by their commonality as mentioned above, usually within a range, such as consumers aged 25-45 or those working in the hospitality industry.

Your marketing strategy will be tailored to that particular niche market, and will encompass all the channels that the target audience might use. Your marketing should be based on market research and take into account the needs and wants of that specific group. Ideally, this means that you have data-led insights about your target market to allow you to create digital marketing or offline marketing strategies that work effectively.

What is consumer targeting?

Where your target market is the broader group of individuals that have a feature in common, your target consumers are the individuals you believe are most likely to purchase your product or service. Your marketing efforts for consumer targeting will be aimed at a more specific audience, such as 35-year-olds or hotel managers.

Consumer targeting vs market segmentation

Consumer targeting is the process of marketing to the specific audience you think will potentially buy your products, based on data-led insights on prior sales data and more.

Market segmentation is a broader process, being the general division of your entire potential audience into target markets, based on the features they share or the products and services they’d be interested in.

Both are necessary processes to narrow down the focus of your marketing efforts for the best results.

Why should you create a target marketing strategy?

Creating a marketing strategy for a specific target market has several advantages over a more general approach.

• You’re more likely to reach an audience interested in your products or services. Having a clear idea of who would be most interested in your offering means you don’t waste time marketing to those who are less likely to buy.
• You can create a more appealing and effective marketing strategy. Knowing your target audiences’ distinct features means you can create a marketing approach that will be more appealing to them.
• You’ll stand out from the competition. By honing in on your target customers and adapting your strategy accordingly, you’ll be ahead of the 76% of marketing executives that don’t use behavioral data to target their marketing efforts .
• You’re able to target and retarget your audience for better outcomes. Comscore found that retargeting customers led to a 1046% uplift in searches for the advertised brand.
• You can discover which customers are more likely to pay a premium for your product. Increase profitability and revenue by targeting the target audience with the highest ROI.

How to target market segments

Step 1: finding your target markets.

Whether you’re planning on exploring target markets for a new or an established business, market research will be vital to discover the most fertile areas for growth. Here are a few ideas on how to define your target market:

Study your current customers

Your current customers have a wealth of information that can help you create a marketing plan for your ideal target market. By gathering data, either through customer feedback channels such as surveys or focus groups, or by examining operations data such as customer purchase patterns, you can develop a persona that describes your ideal customer. What common characteristics do your biggest spenders have? Start by sending a survey with open-ended questions to a small representative sample of customers, perhaps 300 or more, to understand their values in their own words.

Examine the competition

Your competitors are likely targeting the same audiences as you. Analyze how they promote their product or service, and see how their ideal customer responds. What are they providing that you don’t, and what can you give customers that isn’t currently on the market?

Understand the motivations for purchase

Your customers are often telling you in their own words how they feel about your offering and why they have chosen your brand—you just need to listen. Use sophisticated listening tools, such as conversation analytics, to understand things such as customer intent, emotion, effort, and motivation. This will help you build a more solid picture of what your ideal target market looks like, and what challenges your offering solves for them.

Identify groups of customers

Your target markets will be made up of groups of ideal customers. What key characteristics link them together? Build a list of target markets, all defined by distinct features that you can target with your marketing efforts.

Create personas

Developing a persona, or a fictional character that embodies the type of customer you’d like to pinpoint, means you can better reach your target audience. Identify their roles, goals, and pain points and understand how they like to communicate. By helping them reach goals, fulfill role requirements and solving their pain points, you can better hone your marketing efforts.

Judge near-term vs longer-term opportunities

Not all your target markets will be worth targeting in the near term, perhaps because of the time of year, their growth projections and other factors. It’s a good idea to consider which target market is right for immediate targeting, and which segments are better kept for the longer term.

Evaluate product-market fit and positioning

Where will your value proposition have the most impact? Your product market fit will not be the same for every target market you identify, and sometimes you can position your product more effectively for one market than another. Evaluate which target markets will provide the greatest ROI and focus efforts there first.

Understand how to reach your target audience

Your target market will have preferences for how they want to engage with your brand. Learning how they interact with you by examining internal data and analyzing customer behavior will help you to speak to your target market on the platforms they prefer.

Step 2: Create an effective targeting strategy

There is the option of engaging in mass marketing, creating marketing campaigns designed to reach as many people as possible. However, for an effective strategy, you should forgo the entire market and target only the markets and customers you believe will be responsive.

Consider which marketing strategy will be most effective

Mass marketing is a one-size-fits-all approach that won’t have the same impact as targeting a specific audience. Here are some alternatives:

Differentiated marketing: This marketing strategy develops different marketing campaigns for each target market’s preferences. This helps to demonstrate your value proposition for each target audience, rather than marketing generally about your products and services. This may require more initial budget, as various marketing campaigns will be needed, but is more likely to have a greater impact on each individual target market.

Niche marketing: Through your market research, you may have identified a particular market where a small target audience has needs that are not being met by the offerings of your competitors. Creating a highly targeted marketing campaign for this specific audience can be lucrative if the gap in the market is not being served and if the potential purchases by this audience will be high in value.

Micromarketing: Even more targeted than niche marketing is micro marketing. Taking a small segment of your already-small niche market, you divide the audience into further characteristics that unite them, such as geographic location. Again, focusing on this hyper-specific target market can pay dividends if their potential spend outweighs the cost of serving them such a specific marketing campaign.

Create an omnichannel strategy with customer preferences in mind

Your market research should have uncovered how your target audience prefers to communicate. Frequently, the purpose of the engagement—to buy a product, resolve a query, find an answer—dictates how customers want to be reached. As a result, it’s best to create an omnichannel marketing strategy that can guide audiences on a personalized customer journey.

Step 4. Implement and learn

Once you’ve established your target market and understand how to reach them, it’s time to test your marketing campaigns and targeted advertising, and then learn from the response. Evaluations to consider include:

• What drives customers to purchase, and what has less of an effect on buying behaviors?
• Which target markets are the most lucrative, and why?
• What new market segments could be targeted with similar strategies?
• How measurable are the results of your strategies?
• How accessible are your strategies to all of your target customers?

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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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How to Write a Target Market Analysis

Last Updated: March 26, 2024 References

This article was co-authored by Archana Ramamoorthy, MS . Archana Ramamoorthy is the Chief Technology Officer, North America at Workday She is a product ninja, security advocate, and on a quest to enable more inclusion in the tech industry. Archana received her BS from SRM University and MS from Duke University and has been working in product management for over 8 years. There are 7 references cited in this article, which can be found at the bottom of the page. This article has been viewed 353,485 times.

Writing a strong target market analysis can help you use your marketing funds more effectively. By analyzing your audience, you identify the most important characteristics about them and use that information to promote your product or service directly to them. A strong target market analysis should help you or your company connect with the individuals who are most likely to use your product. It may also increase your sales and product or service visibility.

Compiling Data for a Target Market Analysis

• Identifying your target market will help you later decide how to advertise and maximize the value of your marketing resources.

• U.S. Census Bureau, www.census.gov
• www.business.gov, contains links to state and national data about businesses
• Bureau of Labor Statistics, www.bls.gov
• U.S. Department of Commerce, www.commerce.gov

• Demographic information can often be found online as a compilation of different reports from the federal government. Check the Census Bureau and Commerce Department websites. You can find a useful resource from the U.S. Census Bureau at https://www.census.gov/quickfacts/table/PST045215/00 .
• If you are marketing to other businesses, demographic information includes where the business is located, how many branches they have, their annual revenue, number of employees, industry, and how long the business has been running. You can usually gather this data from annual reports, which are public record. Contact the secretary of state's office in your state and ask for corporations data.

• Psychographic information is often found through surveys or focus groups. Though you can set these up yourself, it would be beneficial to hire a marketing research firm to help you structure the surveys, word questions carefully, and engage with focus groups in an effective way. [6] X Research source
• For businesses, psychographic information can include the company's values or motto, how they wish to be seen by their own customers, and how formal or informal their work environment is. You can gather some of this information from your own observations if you visit their stores, or by reviewing their websites. You can also review the company's annual reports from the secretary of state's office.

• Determine how important brand or company loyalty is to your target market.
• Find out if your audience most heavily values convenience, a good price, or quality.
• Discover how your target market usually pays for your product or service via market surveys.
• Ask if your customers prefer face-to-face interaction or an online store.
• For this sort of data, you may conduct your own research or hire a marketing research firm for assistance. [8] X Research source

Formatting Your Target Market Report

• For example, a strong title might be something like, “Target Market Analysis for Consumers of Apple Communication Products.”

• For example, you may begin with, “This target market analysis report is being prepared to consider whether Acme Company should revise its marketing efforts and focus on a younger target audience.”

• Introduction, identifying your general industry and defining your target market.
• Description of your target market, including its size and description of the general characteristics.
• Summary of your market research that went into drafting this analysis.
• Analysis of trends in the market and any anticipated shifts in your target's buying habits.
• Risks and competition that you anticipate.
• Projections and predictions for future growth or shifts in the market.

Reviewing and Using your Analysis

• How many customers will come back?
• How with the aging of your target market affect their interest in your service or product?
• How would economic changes in the community affect your target market?
• How would your target market be affected by governmental changes, new regulations, or so on?

• If you are providing the market analysis for someone in higher administration in your company, you probably will be expected to provide recommendations. Based on your analysis, what steps would you recommend that the company take going forward? Should they increase or cut back on advertising in any particular area? Should new target markets be expanded? Bear in mind that your analysis could be an important step in the future of your company.

Community Q&A

• Offer your customers a coupon or special offer if they agree to fill out a survey for you. This allows you to collect information while encouraging customers to come back. Thanks Helpful 0 Not Helpful 0

You Might Also Like

• ↑ https://www.thebalance.com/how-to-write-a-business-plan-section-3-2947029
• ↑ Archana Ramamoorthy, MS. Chief Technology Officer, Workday. Expert Interview. 26 February 2019.
• ↑ http://articles.bplans.com/how-to-write-a-market-analysis/
• ↑ https://www.inc.com/guides/2010/06/defining-your-target-markets.html
• ↑ https://hightperformance.com/psychographics-drive-member-join-and-renewal-rates/
• ↑ http://www.marketing-schools.org/types-of-marketing/behavioral-marketing.html
• ↑ https://www.thebalance.com/retail-pricing-strategies-2890279

About This Article

To write a target market analysis, begin with a clear title page that contains an informative title. After your title page, include a brief introduction that explains your objective. For example, you might explain that based on your research, marketing efforts should be revised. Then, use short paragraphs to write a description of your target market, a summary of the research you did, an analysis of market trends, and risks and competition that you anticipate. You can conclude with projections of growth or shifts in the market. To learn how to compile data for your target market analysis, read on! Did this summary help you? Yes No

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Target Markets: Why They Aren't Just for Marketers [A Quick Guide]

Published: August 08, 2022

Sales teams and entrepreneurs need to know their target market. You can get there by asking yourself, "Who is the ideal fit for my offering? What are their interests and priorities?"

Answering these questions can help you prioritize the deals you're most likely to win. But how can you really understand the ins-and-outs of your target market?

Let's take a closer look at what a target market is, go over how to conduct a target market analysis, see some helpful examples, review target market segmentation, and look into how sales teams can leverage target markets.

Table of Contents

How to analyze your target market, target market analysis example, target market examples, target market segmentation.

How Sales Teams Can Leverage Target Markets

What Is a Target Market?

A target market is a group of customers for which your products and services are aimed. First defined by an industry (i.e., healthcare, travel, technology, etc.), it represents a specific subset of the broader market the industry covers. It's usually based on factors like behavioral tendencies, geographic location, and demographic characteristics.

Let's say you've created a B2B software product that helps remote construction teams. In that case (and to state the obvious), you'd probably focus on companies within the construction industry. But defining your target market doesn't stop there.

You know your industry, but there's no one-size-fits-all mold for the businesses within it. If you were pinning down a target market for your product, you'd have to start with business characteristics — for instance, scale would be a good place to begin.

Your product will suit certain companies better than others, and selling to a Fortune 1000 company isn't the same as a small construction business with less than 100 employees.

In this case, you'd want to pin down the size of your ideal customer's business — and this number would be the start of a target market analysis.

Let's take a closer look at what that process looks like.

• Analyze your product or service.
• Check out the competition.
• Choose criteria to segment by.
• Perform research.
• Track and evaluate your results.

As the name implies, target market analysis is the basis for identifying your target market. Here are the five steps you can take to do one of your own.

1. Analyze your product or service.

Take a look at what you're selling to understand which consumers would get value from your product. The questions below will help with the brainstorming process:

• "What need does your product or service fill?"
• "Are there any problems or pain points it solves for?"
• "Who would benefit most from your product or service?"

Once you've answered these questions, you might want to consider getting feedback from current customers. Conduct a focus group or ask your service department about their common problems.

Analyzing your product or service in this way will help you better understand your target market. In fact, you might learn that your current customers aren't the people you're trying to target. If you notice a disconnect in this process, you'll want to better align your target market with your actual marketing goals so you can realign.

2. Check out the competition.

Perform an analysis of your competitors to see who they're targeting. Take a look at their customer base, and see if you can find an area of the market you could focus on that they might be missing.

The best way to do this is to conduct a competitive analysis . This entails researching who your competitors are, what they offer, and even review their sales tactics.

Looking at your competitors will even help you identify target market gaps that you can fill. Are there any target markets they do not focusing on?

This could lead you to expand into new markets geographically or develop new products to target a different market.

3. Choose criteria to segment by.

A target market can be segmented by a few different variables. Consumers can be split by demographic, geographic, and behavioral factors.

This is essentially the process of creating a buyer persona . You'll divide your target market into several target customers — also known as (you guessed it) buyer personas.

For example, perhaps your target market is midsized companies looking to purchase marketing automation software. You could divide your target customers into several groups, including marketing department leaders, sales leaders, founders, or CEOs.

Here are some of the most common ways to segment a target market:

4. Perform research.

As you begin narrowing your market, the research phase doesn't end there. What marketing strategies should you use to reach your potential target market? Is the target market large enough for your product or service? Market research will help you learn more about your target market.

Picking the right target market can tell you a great deal about your business. Are you looking to become a true velocity business, or do you see yourself as a steadier flow of pipeline with enterprises and consumers?

5. Track and evaluate your results.

Target market analysis should never be static — you don't just conduct one, be immediately content with the results, and stop there. It's an ongoing process. You need to continuously track your results, evaluate what you see, and iterate on the conception of your target market to more effectively appeal to it.

Let's imagine a company that sells inexpensive, "function-over-form" athletic footwear that stresses comfort and arch support instead of trendy aesthetics.

1. Analyze the product or service.

When conducting its target market analysis, the business in question would have to start by taking a thorough, objective look at its product to get a solid grip on its value and differentiating factors.

The company would likely find that its shoes are better suited for day-to-day wear instead of legitimate athletic competition, lack trendy appeal, and can help with sore feet while standing.

This initial insight can help shape the personas that the company will ultimately target. It would have a better picture of how to construct its value proposition. In this case, the business might find that suburban men over 50 who don't exercise regularly appear to be the most likely to buy its shoes.

Next, the company would dig into its competitor's products, how they were selling them, and any noticeable gaps in their potential target markets. After conducting a competitive analysis, the company might find that its competition was ignoring some geographical trends embedded in its target markets.

Let's say its competitors' retail locations and store placements were primarily in cities — ignoring locations like suburban strip malls and local "mom and pop" retail stores. With that information in mind, the company in question could have a starting point for appealing to a target market its competition is ignoring.

Here, the company would begin to string more detailed personas together. Again, it would base its segmentation criteria on its product analysis and refine it according to its competitive analysis.

In this case, a significant portion of the criteria would revolve around age, social class, location, and interests — making one of its personas older, working class, suburban consumers who prioritize function over form.

After creating its target persona, the company would conduct a market analysis, survey consumers that fit its target market bill, potentially employ more direct tactics like hosting focus groups, and take any other strides it sees fit to ensure that it has a thorough understanding of its target consumers.

From there, it can shape a thoughtful value proposition that will guide its sales messaging, outreach strategies, pricing structure, and other crucial sales-related factors that influence how it reaches consumers.

5. Track and evaluate results.

Once the other steps have been covered, the company would continue to monitor how its efforts resonate with its target persona. If sales aren't where they need to be — or it appears the company might have other personas it can cater to — it might restart this process and shift gears on its messaging, strategies, or target market as a whole.

Let's look at some of the best-in-class companies — both B2C and B2B — to see how they set up their target markets.

1. Atlassian Target Market

Atlassian offers a suite of collaboration tools designed to help developers and product leaders take their projects from concept to completion.

Like most larger companies, Atlassian uses target market segmentation to look at different markets and break up its unique value propositions, terminology, and values.

By diving into one segment, like retail, we see they're working with several large companies — especially with their support-related products.

This tells us that while Atlassian can work with almost anyone doing software development, it recognizes how its value proposition changes depending on the market segment in question.

Even the same product for two different customer types creates different levels of value.

2. Nike Target Market

Nike offers products to athletes and other consumers who want to exercise regularly. They offer apparel, equipment, shoes, and accessories.

They work with athletes and a fitness-minded audience, but we know a good target market definition can't be that broad. Let's break two of their segments down:

• Young athletes — Kids who get frequent exercise and play sports growing up are a huge, growing category for Nike. Nike engages with this market through sports leagues and associations and with endorsements from popular sports stars like LeBron James.
• Runners — With a focus on new types of shoes, Nike shows it targets consumers based on both demographic information and lifestyle. Nike launches shoes and apparel designed to help the avid runner stay on the road a bit longer.

3. Starbucks Target Market

Next time you're sipping your cold foam Cascara cold brew, ponder the target market of the top coffee destination in town: Starbucks .

Many of their locations have been remodeled and offer a hip, contemporary look. Not that surprising since about half of their customers are between the ages of 25 and 40.

If you spend more than five minutes sitting and drinking your coffee, you'll probably hear a barista shout, "mobile order!" The mobile process now accounts for 24% of Starbucks' transactions which shows they're catering to a tech-savvy crowd.

The next clue we have on their target market is the location of their shops. By positioning its locations in heavily urban areas, Starbucks is attracting on-the-go professionals. To recap, here are a few of Starbucks' target markets:

• 25 - 40-year-olds — Remodeled locations accommodate their largest demographic base.
• Tech-savvy adults — Their mobile app has caught on and lends itself to a forward-thinking crowd.
• Working professionals — Their urban focus tells us the type of lifestyle they're catering to.

4. Apple Target Market

What about a company that occupies both the B2B and B2C spaces? How can it develop a target market with such a broad set of customers? Apple is the textbook case for innovation and product design.

But how does that apply to finding a target market? With its wide array of product offerings, Apple has a little something for everyone. Here are two of their target markets:

• Tech enthusiasts — A customer category that launched Apple's brand decades ago, technology enthusiasts still get attention from the company. With launches of new tech categories (including wearables, Apple TVs, and HomePods), Apple has shown it's still creating value for this segment. There is also a tremendous ecosystem where owning a suite of Apple products enables better interoperability among your tech.
• Healthcare — One market Apple has its eyes on is healthcare. By focusing on the appeal of having information right at your fingertips with mobile and the iPad, they've positioned healthcare workers to more conveniently communicate with patients.

Apple doesn't seem to exclude many people from its target market and has positioned itself to benefit both consumers and businesses — even with the same products like the iPad.

Its success has been more about understanding the value of its different segments rather than excluding people from them.

5. McDonald's Target Market

McDonald's target market is broad and encompasses a wide variety of customer personas. Younger professionals represent one of the chain's more prominent target market segments — and that trend is reflected in many of the company's location remodels. Several McDonald's franchises have been revamped to look sleeker, more modern, and better suited for millennials.

Image Source: Community Impact

"Full nest" families with children over six represent another key base for the chain. The franchise takes many strides to appeal to this specific segment, primarily reflected in its Happy Meal options.

But there's another factor that underscores virtually every target market McDonald's tries to appeal to — social class. The chain makes a conscious effort to resonate with lower, working, and middle-class patrons.

Pricing is the basis of McDonald's value proposition. It tries to bill itself as an affordable alternative to more expensive options in the spaces it attempts to sell in. For instance, when promoting its McCafe line, the chain stressed the brand's particularly low price points as a major selling point.

Image Source: McDonald's

Ultimately, the franchise's target market isn't singular and clear-cut in terms of most demographics — but it is specific in terms of its various personas' economic circumstances. Its value proposition fundamentally rests on the fact that its food is inexpensive.

Target Customers

A target customer is an individual that's most likely to buy your product. And it's a subset of the broader target market. For example, if your target market is female athletes between the ages of 13 to 25, a target customer could be female athletes in the specific age range of 13 to 16.

You need to have a firm grasp of your target customers if you're going to develop pointed, effective value propositions. The success and viability of your sales messaging, prospecting efforts, and broader sales process rests on your knowledge of who's buying your product or service and the mindset that makes them do it.

That starts with target market segmentation.

Target market segmentation is the process of partitioning your target audience into more focused, identifiable, and approachable groups (or segments). It's a broad concept that can take on a lot of forms, including:

• Geographic segmentation — Dividing your target market based on geographical boundaries
• Firmographic segmentation — A practice specific to B2B sales where firms are divided based on characteristics like company size or number of employees
• Behavioral segmentation — Dividing your target market based on behavioral tendencies and decision-making patterns
• Demographic segmentation — Dividing your target market based on factors like income, education, race, gender, or occupation
• Psychographic segmentation — Dividing your target market-based elements like personality traits, values, and opinions

How you elect to segment your target market will be specific to your company's needs and interests. In many — if not most — cases, you'll employ more than one of the segmentation methods listed above when defining a target market.

When you identify the customers you want to serve — and the ones you don't — ask:

• "Do my target customers have different problems they're solving with my product?"
• "Do my target customers get different value from my product?"
• "Are either of these things related to demographic, geographic, or lifestyle components?"

In order to segment effectively, you must have a decent way of measuring the value you provide to the market. Then, identify if certain groups are getting more value than others.

This will power the positioning of your product. Suddenly, you can pinpoint pain for your customers while speaking their language.

This helps you refine your position in the market and connect on a deeper level with your customer. Having a target market (or target customer) is all about relevancy and relating to the person on the other side of the cash register.

How Sales Teams Can Leverage Target Markets + Segmentation

Segmentation poses several benefits for sales teams. If you know who will be most receptive to your product or service, you get a leg up when conducting most steps of your sales process.

For one, effective segmentation can be a major asset in prospecting. If your SDRs have a solid picture of the types of customers that show an interest in your offering, cold leads can become a little warmer — letting those reps make more thoughtfully guided use of your sales messaging when connecting with prospects.

Beyond that, segmentation can also help with lead qualification. Knowing whether a lead fits the bill of a class of high-converting customers gives reps a head start during that stage.

You need to have some kind of criteria that can immediately distinguish a prospect who needs your product or service from one that lacks the decision-making tendencies, location, or economic circumstances to actually get something out of it. Target market segmentation gets you there.

Finally, target markets provide sales teams with the necessary information to breach new markets and sell to them effectively. If you're not on top of any emerging markets that might need your product or service, you could hit a wall with your sales potential and lose out on incredibly lucrative business opportunities.

Ultimately, knowing your target markets inside and out is one of the most fundamental tenets of successful sales efforts. If you're not actively analyzing, pursuing, and refining your understanding of your target markets, you're losing out on sales and painting yourself into a corner with your business potential.

Editor's note: This post was originally published in July 2018 and has been updated for comprehensiveness.

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Target Market: Meaning, Importance And Examples

Entrepreneurs and sales teams should be aware of their customers. That includes knowing their priorities and interests to analyze who’s…

Entrepreneurs and sales teams should be aware of their customers. That includes knowing their priorities and interests to analyze who’s most likely to buy. It sets up an organization to prioritize deals that they’re most likely to win. Effectively, it means that small organizations can compete with large businesses by targeting a niche market.

Targeting specific groups, however, doesn’t mean excluding others. It’s a way of focusing on the brand message and bringing it to people who will buy it. It’s a great way to generate business and make operations more affordable, effective, and efficient. Organizations can reach out to potential customers who’re more likely to return. That’s why organizations spend a lot of money and time defining their initial target markets and follow through with specialized advertisements, social media campaigns and special offers.

Target market is a phrase that’s often used in business and considered a part of strategy implementation but what’s the meaning of target market?

Here we’ll discuss what is a target market, the meaning of target audience, tips to define a target market and some examples to further illustrate what a target customer means.

What Is A Target Market?

Target market definition, what is target audience, importance of target market, examples to explain the meaning of target market.

The target market represents a group of people who’re identified by an organization as potential buyers of their products and/or services. They’re identified based on certain characteristics that they share, which are most likely to attract them to a particular product/service. Establishing a target market early on allows organizations to tailor their products to trends. This ensures they spend their precious budget on marketing and advertising to people who’ll buy the product and may even stick to the brand.

A target market can be defined using multiple approaches of target market segmentation. Depending on how a business wants to sell or how it wants to improve, these are a few ways to define the target market:

Defining By Demography

Probably the most important segmentation to define a target market is through demography. Knowledge related to demography is crucial for most businesses. The demographic definition is based on certain measurable statistics such as age, gender, income, education, race, religion, and marital status. For instance, a liquor manufacturer will look at demography before launching an alcoholic beverage in a region. Different age groups prefer different beverages, and their income level determines how likely they are to buy them.

Defining By Geography

When organizations define consumers based on location, it means segmenting based on geography. An organization has to look at the scope of business and use data such as home addresses, postal codes, city, province, state and country. Groups of people in particular geographic areas may need specific products and services. Geographic segmentation works on this principle. For example, a business offering lawn care services may want to direct its marketing efforts in towns or localities inhabited by older residents in high percentages.

Defining By Psychographics

Psychographic grouping of the target customer means dividing the market based on lifestyle preferences or socioeconomic conditions. Socioeconomic groups range from the highly educated and affluent at the top to the unskilled and uneducated at the bottom. Classification based on lifestyle preferences involves people’s likes, values, beliefs, and interests. Businesses can look at whether people prefer urban fashion or suburban lifestyle, whether they’re pet lovers or if they’re keen on environmental issues. This segmentation is defined by the idea that what people choose to buy reflects their socioeconomic class or lifestyle preference.

Checking Out The Competition

It’s a great step to identify who the competitors are targeting and who their current customers are. This lets an organization either identify a group they should’ve previously targeted or find a niche that they and their rivals are overlooking.

Analyzing The Product

It’s good to go back and do the research again. Going over the features of a product or service can identify areas that could boost their versatility with a slight modification or rectification. Organizations must try to link common preferences between different target groups and analyze the possibilities of incorporating all of them into an existing product. It can open up avenues to tap a bigger target market.

It’s unwise to break down the target too far. There’s always scope to Make Smarter Decisions like tapping into multiple niche markets. The marketing message makes the difference; therefore, it’s smart to analyze if the same message effectively reaches all.

Target market and target audience meaning frequently get overlapped and confused, but there’s a clear distinction between the two. For a business, the target market is the end customer that buys from them whereas the target audience are people that the brand’s advertising will be focusing on. If an organization knows who to show it to, they’ll know who to sell it to.

Take McDonald’s for example; the Happy Meals are made for kids, but they need to convince the adults to buy them. The kids are the target market, but the responsible adults are the target audience. By clearly defining their target market and target audience, McDonald’s makes advertisements focusing on aspects like nutritional value and quality of meat, things that kids won’t be interested in; they’re targeted with images of mouth-watering treats.

Another popular example of a target audience is Old Spice customers. They successfully defined their target audience when they realized that more than 50% of men’s deodorants and body washes are bought by women. They soon started focusing on women by bringing in famous women celebrities as brand faces and using a tagline that said, “The man your man could smell like”.

So, what is a target group? A target group is a group of people that a campaign or policy is trying to influence through various strategies. It could be the target market or target audience.

Importance Of Target Market Definition

It’s not unusual to wonder why we would want to target a specific group instead of a larger mass. Surely, marketing to more people will generate more sales. However, while a wider net may get a couple of valuable catches, it may also end up with a barrel of fish that nobody wants. Fishing needs the right equipment, the right bait, and the right place to fish at.

By aspiring to make everyone a potential customer, organizations can focus less on people who actually need and can benefit from their product. This means losing their attention and a potential end-customer. By focusing marketing and advertising efforts on clearly defined sections of the market, organizations can attract more customers who’ll value the brand and help the business grow. In addition to customer attraction and value addition, target marketing is also important for:

1. Developing the product line after solving a specific need 2. Setting the right prices 3. Determining channels for flawless marketing 4. Finding and highlighting the best features 5. Determining SEO criteria and choosing correct keywords

A specific and narrow target market ensures that organizations don’t spend too much time and/or money to cast a wide net. This enables them to work with considerably lower overhead and convert greater numbers of potential customers.

Let’s look at these famous examples to better understand the meaning of target market:

Nike offers apparel, shoes, accessories and equipment to athletes and consumers who exercise regularly. They work with a fitness-minded audience and athletes—a well-defined target market. They mainly classify their segments into young athletes and runners. A segment of their products targets children who exercise and play frequently. These can be kids who have taken up a hobby or those playing in sports leagues. They have a similar, broad collection of apparel and shoes for avid runners.

• Starbucks

Starbucks has evolved and remodeled to cater to both the new generation and classic customers. They have distinctly defined their target market into three categories:

• Tech-savvy adults who fall under the forward-thinking crowd and make use of the Starbucks mobile app to the fullest.
• 25- to 40-year-olds who form their largest demographic base. locations have been remodeled to accommodate their needs and preferences.
• Working professionals who have an urban lifestyle and specific preferences, including the coffee they drink and where they buy it from.

Executives need to have a firm grip on their target market if they are to develop effective, pointed value propositions. The viability and success of the entire process of sales and the effort that goes behind it rest on the knowledge of who’s buying the product and what influences them to do so. Target markets offer sales teams the necessary information for strategy development required to breach the market and make sales efficiently. Not being on top of emerging markets can halt growth and make us lose lucrative business opportunities.

Executives must develop transnational knowledge and show better preparedness for performing in global markets. By signing up for Harappa’s Global Perspective pathway , you will learn to understand differences and respect diversity of opinions, beliefs and perspectives. This will help you shift easily from one cultural frame of reference to another. You’ll learn to communicate with cultural sensitivity, build cultural fluency and adapt the right body language to lead multicultural teams. Thinking globally exposes individuals to new perspectives that help them sense emerging trends of the future. Sign up for Harappa now

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Marketing Research Basics: Identifying Your Target Market

Mapping your demographics will help you spend your marketing budget wisely.

There are three areas that you should research:

• your target market (customers)
• your competition
• the industry

This article will discuss the basics for performing target market research.

Who Are You Marketing To?

"Everyone" is not your target market! Knowing and understanding your target market is crucial. The benefits of knowing your target market include:

• knowing who and where your customers are
• knowing how you can communicate with them and
• helping you to choose effective marketing channels

You want to spend your marketing budget wisely. By knowing and understanding your target market, you can focus your spending on the customers who will become repeat purchasers. In the long run, this will be more effective than continually marketing to those who either won't purchase or who are destined to only purchase once. Market research allows you to drill down from "everyone" to smaller groups that you will focus on. Not all customers are the same - look for niches. By identifying which traits are prevalent among those who want to purchase your product or service, you can then focus on promoting to that group, which would be your target market.

Division of the total market into smaller, relatively homogeneous groups is a process called market segmentation. Market segmentation is very important because no single marketing mix (combination of product, price, promotion, and place) can satisfy everyone. Therefore, separate marketing strategies, that is, separate marketing mixes developed from your research, should be used for different market segments.

• An effective segmentation must meet the following basic requirements:
• Market segments must be measurable in terms of both purchasing power and size.
• You must be able to effectively communicate with and serve a market segment.
• Market segments must be sufficiently large enough to be potentially profitable.
• Market segments must not change too quickly.

Commonly used segmentation factors are demographics, geographics, psychographics, and behaviors, but any segmentation is possible. To begin defining your target market, answer the following questions.

Who are the people that make up your target market?

This is demographic segmentation. Demographics are used to classify groups of people based on common characteristics. Typical demographic categories are:

• Occupation/employment status
• Family status

Some resources for collecting demographic information include the Bureau of Labor Statistics and Census data.

Where are these people located?

This is geographic segmentation. Most business owners develop a target market within a specific geographical location. For some, tools like the Internet allow them to expand beyond a well-defined geographic market. In any event, answering the next questions will allow you to think carefully about where your targeted consumers are located.

• In what area (country, state, city, etc.) do they live?
• Do they live in a rural, urban, or suburban setting?
• What is the population density and growth rate where your target market lives?

What do they think?

This is psychographic segmentation. Psychographics are the values of customers and what motivates them to purchase your products. Knowing this can help you craft marketing messages for that group. For instance, knowing that your target customers value environmentally-friendly packaging indicates that you may be able to sell more of your product if you package it in that way. Likewise, knowing that your audience participates in certain types of activities - outdoor recreation, for example - can help you target a trail riding service appropriately. In general, psychographics can be evaluated by answering these general questions:

• What are the consumers' opinions and values?
• What are their interests and lifestyles?
• What attitudes do they have about your product?
• What needs do they have that compel them to purchase your product?

What do they do that makes them unique (as a group) from others?

This is behavioral segmentation. Think about their actual behavior in the marketplace. If you can learn about the products they buy, how frequently they purchase them, and other key issues, you'll be better able to provide the most attractive product/service for your audience. The questions you'll need to address in this category are:

• What products do they typically use?
• What benefits do they look to get from the products they purchase?
• How often do they use them?
• How sensitive are they to price changes?
• How loyal are they to their preferred brands?
• How are the products usually purchased and from where?

As part of the research process, you may find it helpful to develop one or more "customer profiles." A customer profile is a general description of the type of individual that makes up your target market. Let's look at an example to illustrate. Consider an agritourism operation that consists of an on-farm market, corn maze, pumpkin patch, apple picking, baby farm animal petting area, and hard-cider tasting room. Through the market research process, you identify a customer profile as shown below.

Demographics

• Age: early 30's
• Single father
• Early career professional
• Lower-middle-income
• Takes a child on weekend outings
• Spends money on ensuring a child has a good time
• Uses social media to look for activities

Psychographics

• Values healthy foods
• Wants outdoor activities

Geographics

• Doesn't want to drive more than 45 minutes from home

Knowing who you will market and sell your product(s) to is vital to developing an effective marketing strategy for your farm business. Before a marketing strategy can be developed and implemented you must identify, evaluate, and select a target market. Recall that while a market is a group with sufficient purchasing power and willingness to buy, your target market(s) is specific segment(s) of the market most likely to purchase your product.

As part of the market research and segmentation process, you may find it helpful to develop customer profiles as a way to describe the "typical" member of a target market group. Remember, though, that you are describing general traits about this targeted group. Other individuals and groups, those outside your target market, may also purchase your product.

• Value-added agriculture
• Agricultural entrepreneurship
• Value-added dairy entrepreneurship
• Value-added dairy foods marketing
• Online marketing and sales
• Social media
• Direct marketing
• Farm and ag business management
• Business planning

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5.5 Selecting Target Markets

Learning outcomes.

By the end of this section, you will be able to:

• 1 Define target market.
• 2 Explain target market strategies.

Target Markets Defined

Ultimately, the purpose of segmenting a market is to highlight the differences between groups of customers so that you can decide on which group(s) to focus your marketing efforts and resources—that’s your target market ( Figure 5.9 ).

Think of your target market in terms of focusing your marketing resources on segments that are more likely to buy from you. The bottom line is that target marketing is a more efficient, effective, and affordable way to reach customers and generate business. It’s simply a subset of the total market.

Keep in mind that the target market isn’t the same as the target audience. The target audience is narrower in that it refers to the group of consumers you expect to actually purchase the product. The audience may or may not overlap with the target market. For example, a children’s toy may have a target market of boys between the ages of 6 and 12, but it’s the boys’ parents (who actually purchase the toy) who are the target audience. Let’s take a look at how LEGO has mastered this concept.

Marketing in Practice

You might think that children are the primary target market of toy manufacturers, but smart toy marketers know that they also have to market to parents because it’s parents who actually buy the toys for their children. The marketers at LEGO (see Figure 5.10 ) seemed to have figured this out and have made the brand parent-approved by combining fun for children with an educational “twist.”

LEGO brands its products not only as a creative outlet for children but also an opportunity to grow their interest in STEAM—a learning approach that incorporates science, technology, engineering, the arts, and mathematics. For example, one of its websites features education sets for children from preschool through middle school that promote learning through the toys. Another of its websites has an entire section of tips for playful parenting with LEGO bricks. 52 It also has websites for daily LEGO challenges and even daily build challenges and LEGO lessons for families at home.

Parents today want to buy their children toys that are safe and fun and that help them learn, and LEGO seems to have been able to win over the hearts (and money) of its target audience.

For more information about LEGO and STEAM, watch this video from Kansas City PBS.

Another important concept in target marketing is what’s known as a buyer persona . A buyer persona is a semi-fictional representation of an ideal customer that helps marketers understand and relate to the target market. Buyer personas are intended to help marketers “visualize” those to whom they are selling so they can fine-tune their marketing messages.

Best Buy used personas in precisely this way. Its buyer personas are “Buzz” (the young tech enthusiast), “Barry” (the wealthy professional), “Ray” (the family man), and “Jill” (a soccer mom who is the main shopper for the household but usually avoids electronics stores). 53

What’s typically included in the buyer persona? Some examples include the following:

• Name. It may seem silly to include a made-up persona name like Best Buy did, but it’s done so that the marketing team can more easily discuss their customers and plan how to reach them.
• Age. The age (or age range) of a persona allows for understanding generation-specific characteristics. As we pointed out in our earlier discussion of using age as a way to segment the market, consumers within the same age group tend to share characteristics and purchase preferences.
• Interests. The interests of the buyer persona describe things like hobbies or what they do in their spare time.
• Media Usage. What media platforms does the buyer persona use? Television, radio, the Internet? This is important because the marketer wants to know where to reach these “people” with their marketing messages.
• Finances. The income and other financial characteristics of the buyer personas help marketers glean insights as to what types of products or services will pique the interests of these buyer personas. These financial characteristics also assist in making decisions about price points and promotions that would be successful in reaching these customers.
• Brand Affinities. Do they like certain brands? If so, this can provide the marketer with valuable information about the type of content to which they best respond. 54

Link to Learning

Importance of buyer personas.

Customer personas are a tool to help marketers better understand their potential customers. Learn what a customer persona is and how to develop them from this brief Go Daddy video.

Also, check out this video from HubSpot’s Stephen Higgins on how to use buyer personas to drive your marketing strategy.

Target Market Strategies

Thus far, we’ve discussed the how of segmenting a market and selecting target markets. At this point, it’s up to the marketer whether the company will focus its efforts and resources on one or more of the identified segments or instead cater to the mass market. That choice is the determining factor in the company’s marketing mix and its positioning plank. There are four generic target marketing strategies, as illustrated in Figure 5.11 .

Let’s look at each of these strategies more closely.

Undifferentiated Marketing (Mass Marketing)

Sometimes there are no strong distinctions in customer characteristics. In cases like this, the costs involved in developing separate marketing mixes for separate target markets doesn’t make financial sense. That’s when a company may decide to use a single marketing mix for the entire market.

Let’s imagine the entire market as one big apple pie. With undifferentiated marketing, the company doesn’t take just one slice or perhaps a few slices of the pie—it takes the whole thing. The concept of undifferentiated marketing is quite simple. You want to reach as many people as possible and hope they’ll jump on board with your product or service. Mass marketing is typically used when a brand has a product or service that has high market appeal, such as things that most (or maybe even all) people will always need or want. Consider a product that nearly everyone purchases, like soft drinks. Now think about all the advertising messages you get for a brand like Coca-Cola —you’ll see TV commercials, magazine ads, billboards, banner ads in search engines, and the list goes on. That’s the hallmark of mass marketing.

One of the biggest advantages of undifferentiated marketing is the scope and cost-efficiency of advertising on a much larger scale. Every single marketing message can be deployed across a variety of media channels and can potentially reach millions of consumers. This is where economies of scale come into play: with high-volume sales, production becomes less expensive because costs can be spread out over a larger amount of goods. That’s a huge advantage compared to companies that produce products for smaller, more precisely targeted audiences. It’s like buying in bulk at Sam’s Club or Costco —because you buy so much of a product, the cost is lower. Companies that use undifferentiated marketing experience the same thing. 55

Differentiated Marketing (Segmented Marketing)

Now let’s take that same apple pie (the entire market), but instead of taking the whole thing, we’re going to take only some of it. Perhaps we’ll take just a few slices, or maybe we’ll take more. It depends on how many target markets you want to serve. That’s the premise of differentiated marketing .

This type of market targeting is one of the most common. A company identifies several target markets and designs separate, concentrated strategies for each. Separate brands are developed to serve each of the segments. Consider Nike , for example, which (like most apparel companies) offers different products for different segments. When Nike began its business, the founders were both competitive distance runners, so they targeted people like themselves as a segment of the running shoe market and the brand took off. However, in order to grow the business, Nike now focuses on three segments—women, young athletes, and runners. 56

The automobile market is another good example of a clearly segmented market. Look around you on any given day, and you’ll clearly see that people want different types of vehicles—small cars, big cars, SUVs, trucks, hybrids, and luxury cars. Many of the car makers like GM , Ford , Toyota , Honda , and others generally offer cars for most or all of the segments. For example, Honda's lineup includes models like the CR-V compact SUV, the Civic compact car, the midsize Honda Accord sedan, larger SUVs, and even a minivan. 57

Concentrated Marketing (Niche Marketing)

Now we’re going to take that same apple pie (remember, representing the entire market), and we’re only going to take a single slice, and perhaps a small one at that. That’s concentrated marketing.

Concentrated marketing doesn’t mean that the company hasn’t identified other target markets; it simply means that it chooses not to serve all of them. Some markets may not be attractive; other markets may not align with the company’s business strengths. Therefore, the company focuses on just one target market with a single marketing mix. It channels all of its marketing efforts toward that specific segment with the aim of “owning” it over its competitors and creating strong brand loyalty. 58

A good example of concentrated marketing is the eco-friendly cosmetics retailer LUSH . LUSH advocates for ethical buying and purity of handmade products and doesn’t use animals in testing its products. As a matter of fact, at least half of its website is dedicated to fighting animal testing and overuse of plastic packaging and creating environmental awareness. The company also differentiates itself from its competitors with eco-friendly packaging and organic ingredients. 59

This is a smart strategy for smaller companies or companies with limited resources that might be stretched thin if they attempt to compete in too many market segments. It has the added benefit that R&D and marketing can concentrate on understanding and meeting the needs of one group of customers rather than a diverse base of customers.

Micromarketing (Customized Marketing)

Micromarketing goes one step further than concentrated marketing and targets a specific group of individuals within a niche market based on specific information that has been collected about them.

For a good example of micromarketing, consider the real estate industry. A realtor may specialize in commercial sales or residential sales. Within the scope of residential sales, that realtor may drill down further and specialize in new construction, luxury properties, land and development, over-55 communities, or farms/ranches/equestrian properties.

Now let’s assume that you’re in the market for an expensive home in a particular area of the city. You’d likely contact a realtor who has developed a reputation in dealing with properties in a specific price range and knows the area where you’d like to move. That realtor is going to consider your specific needs and demands and will invest their efforts in finding a property that meets as many of your requirements as possible. That’s micromarketing.

Stitch Fix is another good example of a company that uses micromarketing. Stitch Fix is an online personal styling service for men, women, and children that sends a selection of clothing and accessories to your door using a mix of machine learning, data, algorithms, and human stylists. The company uses “85 meaningful data points” about each customer, and based on those data points, it predicts clothing choices that the customer will want. If they doesn’t like the product, they can just send it back with a prepaid, printable label within 30 days. 60 You can’t get much more personalized than that!

Knowledge Check

It’s time to check your knowledge on the concepts presented in this section. Refer to the Answer Key at the end of the book for feedback.

• Differentiated marketing
• Concentrated marketing
• Undifferentiated marketing
• Micromarketing
• buyer persona
• target market
• niche market
• brand affinity

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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.

Table of Contents

Related Articles

9 Min. Read

How to Write a Customer Analysis

4 Min. Read

How to Define Your Target Market

8 Min. Read

How to Conduct an Industry Analysis

3 Min. Read

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

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BUSINESS STRATEGIES

What is a target market and how to define yours

• Rebecca Strehlow
• Dec 7, 2023
• 11 min read

One of the first steps in starting a business is determining your target market. This step alone can be the basis for what products you create, how you brand your business and ultimately who you market to.

With that in mind, you’ll need to develop assets that resonate with your target market. Start by creating a business website that represents your business and uses language and visuals relatable to your audience. Consider what niche you can fit into and what separates your business from the competition. From there you can create messaging, branding and advertising designed for your target market and convert more leads into customers.

Keep reading to learn more about defining your target market and gain expert tips on how to implement this targeting throughout your business strategy.

What is a target market?

Your target market is your product’s primary consumer. Once you know who this is, you can tailor your branding and marketing efforts toward them.

A target market can be composed of a broad group, such as married men over 40 in the US, or it can be quite narrow, such as urban, health-conscious, vegetarian women in Texas. Your market will depend on the particular consumer needs your product addresses.

The three key aspects of a target market include:

Demographics: Age, gender, income, education or employment status.

Geographics: Primary location of your market.

Personality traits: What they like and dislike, as well as where they shop and their favorite brands.

To pinpoint your target market, you’ll need to analyze data about your product niche, your customers and your competitors. You'll also need to understand more about the specific types of target markets in more detail.

What are the types of target markets?

In general there are several ways business owners can categorize target markets. For the most part target markets are divided into the following four main types: demographic, geographic, psychographic, and behavioral.

Demographic

This type of target market is defined by a number of demographic variables such as age, gender, income, education, and family size. Companies might target specific demographic groups based on their buying habits and purchasing power.

Geographic target markets are defined, as the name suggests, by geographic variables such as region, state, city and population density.

Psychographic

Psychographic variables such as lifestyle, values, personality, and social class make up the definition of this target market.

This type of target market is defined by consumer behavior, such as the benefits sought, usage rate, and customer loyalty.

It's important to note that a business may choose to target one or multiple types of target markets, depending on their specific business objectives and marketing strategies.

Why are target markets important?

Understanding your target market is a crucial aspect of developing a successful business. Below we explore the main reasons why understanding your target market is so important in order to ensure a profitable business.

Better customer segmentation : Understanding your target market allows you to segment your customers more effectively, which in turn helps you tailor your marketing messages and products to meet their specific needs and preferences.

Increased focus and efficiency: Focusing on a specific target market allows you to be more efficient with marketing resources while avoiding wasting time and money on efforts that are not likely to reach or resonate with your target audience.

Improved brand reputation: Understanding your target market can help you establish and maintain a positive brand reputation by allowing you to align your brand with the values and interests of your market.

Increased customer loyalty : By understanding your target market and delivering products and services that meet their needs and expectations, you will foster a loyal customer base that is more likely to recommend your brand to others.

Better decision making: Understanding your target market provides valuable insights that can inform important business decisions, such as product development, pricing strategies and distribution channels for marketing efforts.

Target market vs. target audience?

Often used interchangeably, target market and target audience are not the same thing. Your target market is the end consumer while your target audience is to whom your company advertises. While your target market might fall into your target audience, who you advertise to may not, in the end, be the one who consumes the product.

To clarify, let’s look at an example: Kids toys, for example, have a very clear target market: children. In addition, toys are often marketed toward children who identify with a specific gender category. Nevertheless, kids don’t purchase their toys, their parents do. So toy companies must focus their advertising strategies on parents (the target audience) to sell toys for their kids (the target market).

For example, Generation Alpha , kids born between 2010 and 2025 with millennial parents, play with much different toys than their parents did because millennials have different consumer preferences than their Baby Boomer parents. Rather than shopping in big-box stores for brightly-colored toy packages, millennial parents are more likely to purchase clean, minimalistic, and gender-inclusive toys from Instagram ads or Amazon. Therefore, toy companies are using Millennial preferences (the target audience) to sell toys to their Generation Alpha kids (the target market).

How to determine your target market

Gather consumer data

Know your product’s benefits

Investigate your competitors

Segment your audience

Write a target market statement

Refine your research

01. Gather consumer data

The first step in defining your target market is to learn more about your customers. Even if you’ve just started an online store and don’t have many customers yet, these practices will come in handy further down the line.

Start by gathering information about current and past buyers and try to identify characteristics that they have in common. This data will help you market your product to people with similar interests. If you are still in the early stages of your business and haven’t started selling your product, look at competitor markets and use that information to determine your target market.

Using website analytics tools, social media and email marketing analytics platforms, here are some data points you’ll want to consider:

Age: Do your customers share a common decade or generation? Are they millennials, older adults, or something in between?

Location: Where in the world do most of your customers live? Consider the different cities, countries, and regions.

Language: Which languages do your customers speak? Remember that your customers’ language isn’t necessarily the dominant language of their country.

Spending power: Consider socioeconomic factors that may be affecting your customers. How much money are they willing or able to spend?

Hobbies and career: What do your customers enjoy doing? What are their professions, and what do they do in their spare time?

Stage of life: Where are your customers in life? Are they college students? New parents? Retirees?

If your company is B2B rather than B2C , you’ll want to look for characteristics of companies, rather than individual consumers. These traits include:

Business size: Are the businesses that buy from you small, medium, or large?

Location: Where are these businesses physically located?

Vertical: Which industries are most of these businesses in?

Budget: How have these businesses raised money ? Consider how much they’d be willing or able to spend on products like yours.

Be sure to track this information in an orderly manner so that you can keep your findings organized and easily identify trends. Analyzing these trends will allow you to identify shared characteristics within your customer base. These characteristics will inform your inbound marketing efforts and steer your strategy toward your target audience.

02. Know your product benefits

The next step is to understand your consumers’ motivation behind purchasing your product, rather than a competitor. You can learn this information by speaking to your customers directly, asking for testimonials, and by doing in depth competitor research to understand the difference between your product and theirs.

Get to know the benefits—and not just the features—of your product or service. The features are your product’s characteristics. For example, if your business sells suitcases, you might describe your product as being small, compact and having multiple compartments. Your product’s benefits, on the other hand, are the advantages it brings to your customers. Think about how your product makes someone’s life better or easier. The compact, multi-compartment suitcase offers the benefits of being easy to carry and pack as a carry-on.

It’s vital to understanding how your product fulfills its target market’s specific needs. For the suitcase company discussed above, for instance, the target market would be people who benefit from a lightweight, carry-on suitcase—such as business travelers who take short, frequent trips.

03. Investigate your competitors

Hone in on your target market even further by taking a look at which your competitors are targeting. Of course you won't have access to their customer analytics data, but you can understand their customers with a SWOT analysis .

Take a deep dive into competitor websites, blogs and social channels. Consider who their target market is based on their website content, content marketing strategy, and social media branding. You’ll likely be able to infer details about their audience based on their brand language and tone. You can also check for comments on their social media pages to see which types of people are engaging with their posts.

Take an especially close look at their most successful social media and blog posts. Do these pieces of content have anything in common in terms of their offering or branding? Which interests or needs do they address? Use this information to consider what kinds of qualities or advantages appeal most to consumers within your industry.

04. Segment your audience

At this point, you’ve gathered some information about the characteristics and interests of your target audience. Now, it’s time to use that information to clearly define your customer types. This is going to form the basis of your target market.

The best way to do this is through market segmentation. This involves dividing your customers into different groups, or segments, based on their shared qualities.

You can divide your customers based on:

Geography: Physical location, whether it’s your own city or a different part of the world. Note that if your customers are located around the world, you may need to create a multilingual website, as well as localized ads and marketing materials.

Demographics: Characteristics such as age, gender, race or ethnicity, income level, or marital status.

Psychographics: Inner qualities such as personality, lifestyle, or personal values. These are often a product of geographic and demographic factors such as location, generation, or stage of life.

Behavior: Perceived qualities based on online behavior, such as buyer readiness or frequency of use.

If you’re a B2B company, use similar characteristics but apply them to business. Consider firm demographics—known as firmographics—such as industry, location, customer size, business structure, and performance.

To gain a deeper understanding of your segments, you can also create buyer personas. Also called user personas, buyer personas are imaginary characters with traits and behaviors similar to those of typical customers. Ultimately, these fictional characters represent your target market, helping you gain insights into the needs, desires, and lifestyles of your actual customers.

05. Write a target market statement

Now that you’ve determined the defining features of your audience, it’s time to put your findings on paper. Write a target market statement that focuses on the most important audience characteristics you’ve identified in your research. Your statement should include:

Demographic information about your target market, such as gender and age.

Geographic location of your target market.

Key interests of your target market.

Then, sum it up in a single sentence. For example:

“Our target market is women in their 30s and 40s who live in the United States and enjoy casual, comfortable fashion.”

Doing this will keep your brand identity and marketing efforts consistent. It will also come in useful as you adapt your company’s mission statement to be as relevant as possible for your audience.

06. Refine your research

Defining your target market is based on thorough research, but that doesn’t mean it’s going to be perfect the first time around. Even after you identify your market, you’ll still need to continually test and experiment to get an increasingly precise picture of your customers. Staying on top of your market research can also help you keep up with the times, as consumer interests change over the years with technological developments, generational attitudes and passing trends.

To narrow in on your audience, you’ll need to assess your business success and test your targeting efforts. Take a look at who is actually buying from you and which specific products or services they are purchasing. Try to understand how you can adapt future product development or modify your branding or marketing efforts to better fit your customer base.

Utilize A/B testing with your marketing efforts to test the same ad on different audiences and see which version performs better. Alternatively, you can develop two different creatives, each with their own look and language and compare your audience’s responses. Based on the results, you might need to either adjust your business strategy or revise your target market statement. The bottom line is to build a brand that resonates strongly with your audience. Remember, the more targeted your content, the more effective your lead generation strategies—and the more customers you’ll bring to your brand.

What are examples of a target market?

These website examples clearly cater to their target markets. Take note of the phrases and visuals these websites use.

01. Amanda Darby

Let’s take a look at how nutritionist Amanda Darby appeals to her target market. She aims to address people looking to make healthier food and dieting choices. To do this, she’s created a website that fosters a sense of joy and personal empowerment around food. The light and airy background, coupled with the cheerful images of cooking and eating, instantly makes it clear that she targets people looking for a healthy lifestyle.

She also hones in on her audience even further, using phrases that directly appeal to middle-aged women. In the section of her homepage that discusses her nutrition coaching: “You will be the mom who loves food, her body, and knows life isn't perfect, but is perfectly happy living the life she has vs. waiting for the life she will have when she reaches her goal weight.” By directly addressing the concerns of her target market, Amanda helps her audience feel heard and understood. This strengthens their trust in her brand and persuades them that she is the right coach for their needs.

02. Curtinsmith Guitars

From the very first image that appears across the top of this website, it’s clear that Curtinsmith Guitars is crafting something unique. By displaying photographs of their workshop and describing their guitars as “custom” and “handmade,” they directly single out a target market of those looking for unique, one-of-a-kind guitars. This target market is likely musical, appreciative of craftsmanship and not afraid to spend their money on their passions.

The About Us section of the site confirms this targeting. The owner, Paul, writes, “I find it quite profound to create something which, in itself, will continue to create. It is an absolute joy crafting these instruments and it is my prayer that they continue to be a joy for those who play them and listen to them, for many generations.”

In this statement, the brand makes it clear that it targets musicians who value the creative process. They also allude to the quality of their product, portraying them as long-lasting heirlooms with sentimental value.

03. Lima Cakes

Sona Karapetyan uses her artistic vision to create showstopping celebratory cakes. The About section on her website says that Sona “was always experimenting with graphic art & design” and, “When Sona decided to embark on the cake art journey, she experimented with different textures, shapes and architectural elements to create a unique design language.” It also states that she never creates the same cake twice so each cake is unique to each client.

Her neutral-colored web design and sophisticated copy narrow her target market down to mature individuals who appreciate art. Her website also features images of her cakes, clearly displaying her skills to her potential customers. The prices of her custom-made cakes will reflect the effort that goes into each one. These details show that she likely targets an educated, older, affluent crowd with an appreciation for modern art and design.

What are market segments?

Market segments are subgroups within a larger market that share specific characteristics and needs. These characteristics can include demographics, lifestyle, interests, behavior and purchasing patterns. By identifying and understanding these segments, businesses can tailor their marketing messages, products and services to better resonate with each group. This allows for more targeted and effective marketing efforts.

Target market FAQ

How detailed should a target market be.

The level of detail for a target market depends on your specific business and goals. However, it should be defined enough to create targeted marketing campaigns and avoid wasting resources. Consider including demographic information (age, gender, income, etc.), psychographics (lifestyle, values, interests), and behavioral factors (purchasing habits, media consumption). While details are important, avoid over-segmentation, as it can limit your reach and marketing effectiveness.

What is an example of a target market?

What is the purpose of a target market, what is the best target market, related posts.

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• Essay Database >
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• Essay on Business

Target Market Essay Sample

Type of paper: Essay

Topic: Business , Products , Marketing , Market , Strategy , Brand , Organization , Customers

Words: 1300

Published: 02/03/2020

ORDER PAPER LIKE THIS

The primary aspect of an organization dealing with consumers both in product and service industries is to generate numbers in terms of sales and build brand loyalty to sustain the organization in a highly competitive globalized economy. The success and failure of a brand is highly dependent on the identification of the relevant target market and thus the marketing mix is of prime importance in estimating the potential of the target market for both the pre and post launch of a product campaign. We will evaluate the identification of a target market from a marketing perspective, the marketing processes and how it can help in the eventual success or failure of a brand or a campaign. Key Words: Market Segmentation, Target Market, Brands, Marketing Mix TARGET MARKET

Target Market

Introduction The primary aspect through which a marketing organization builds and sustains its business is by bridging the gap between the consumers choice of a product or service and creating a need and want in the minds of the consumers. In the current globalized economy the need to have a well defined target market is one of the vital elements a marketing organization looks into in view of the fact that globalization has opened borders to products of all kinds and the consumers are spoilt with choices. The main aim of a marketing strategy is to define the core proposition of a brand in view of the unique consumer benefit that would drive the target market towards the product i.e. a brand.

What is a Target Market?

The importance of target market can be judged by how Philip Kotler (1999) in his book Kotler On Marketing: How To Create, Win, and Dominate Markets, mentioned the selection of the target market as the first element of the strategy for marketing managers. TARGET MARKET Thus a target market according to Philip Kotler (1999) has been elaborated on three levels which are primary, secondary and tertiary which is important in view of having a fair idea by the brands custodians to judge the potential of the targeted group both from a short term and long term perspective. The primary target market is a group which is willing and ready to buy, secondary target market is the group which can buy but they are willing or ready to buy and lastly the tertiary target market are those who have the potential to graduate to secondary and primary target market in terms of buying inclination.

Selection of a Target Market

The selection aspect of the target market is dependent on the nature of the functional attributes that a product possesses. For a dairy product (milk) the primary target market are the mothers who are the decision makers when buying grocery however the kids are the influencers in this regard and the communication can be geared towards in gaining a kid’s attention in order to influence his or her mother to get a particular dairy product. Thus the demographics and psychographics needs to be studied of a selected potential target market most appropriate for a certain product. The demographics which covers the age, gender and SEC (A+, A, B etc) determines the type of consumer most suitable for the product. The psychographics covers the target markets, beliefs and attitudes (Interests and Opinions) and the personality of the prospective target which may be confident, energetic, expressive or sober. Dib S. & Simkin L. (1996) TARGET MARKET It is very important to target a class in terms of their life style and evaluate it with the products benefits as to whether it fits in their life style or not is the key in gaining and retaining new consumers for a marketing business. The selection of a target market is done through market segmentation which basically selects a group which have needs and wants similar to each other and are categorized and thus is more focused on the selection aspect, however another aspect which is used by organization is an approach which is called undifferentiated and is used for mass marketing which is essence represent the market in totality with no segments of the target market selected (Dib S. & Simkin L., 1996).

Market Segmentation

One of the chief components while making a marketing strategy is the analysis with regards to the selection of a target market and the subsequent significance of the marketing mix (Product, Place, Packaging & Promotion) which in essence is crucial to cater to the needs and wants of the target market in a consistent and effective manner. TARGET MARKET The aim is to build loyalty through the marketing mix and through market segmentation one key element of the marketing mix is utilized to communicate the message to the selected target market. The key element of the marketing mix most utilized to target a particular group is Promotion as it communicates to the target market through visual and copy of the communication and build an emotive connect with the potential target market.

Target Marketing Strategies

According to Ferrell O. C. & Hartline M.D. (2011) in their book Marketing Strategy, the strategies to select a target market are categorized as follows:

Single Segment Targeting:

This strategy focuses on one market segment and is concentrated with a niche market approach. This strategy is best suited for organizations with limited resources

Selective targeting:

This is known as a differentiated strategy and focuses on multiple various segments, this strategy involves the different segments and the offerings that the strategy has in lieu with the marketing mix elements which may include the message and the variance in the distribution channel. TARGET MARKET

Mass Market Targeting:

This strategy is only taken into account by the large industries in view of the Mass marketing perspective. This strategy is undifferentiated and covers all the markets, and with regards to the marketing mix each segment targeted is offered a different strategy in terms of the marketing mix.

Product Specialization:

In this target market selection strategy, the organization specializes in product or service, case in pint being Apple mobile sets which is related to product specialization,

Market Specialization:

In this strategy the organization is serving a market segment which they know utilize their products and thus provides them an array of services in relation to the market segments by providing different products.

TARGET MARKET It is easier to select a mode of communication as in the ATL, OUTDOORS, Brand activation and connect with the audience. The value proposition the emotive connect and the products expression will be the key factors in not only target a market segment effectively but also providing the right results in terms of sales and awareness. On a concluding note to be able to gain sufficient advantage over ones competitors it is imperative that the marketing strategy is effective in this regard. The key is to manage the marketing mix in relation to the marketing mix and achieve the edge over rivals both in the short and long term in an effective and efficient manner. TARGET MARKET

Dib S. & Simkin L. (1996).The Market segmentation workbook. Target Marketing for Marketing Managers. 4 Ferrell O. C. & Hartline M.D. (2011). Marketing Strategy. Target Marketing Strategies. 182 Lamb C. W., Hair J. F., Jr & MacDaniel C. D (2009). Marketing. The Marketing Mix.44 Top of Form Bottom of Form Philip Kotler (1999). Kotler On Marketing: How To Create, Win, and Dominate Markets Choosing the Strategy. 41 William M.P., Robert J.I. & Jack R. K (2012). Business. Building Customer Relationship through Effective Marketing. 355

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Why Is It Important To Understand Your Target Market?

A short question for you – why is it important to understand your target market? Not 100% sure? Read this article to find the answer.

Have you launched your new product blindly without knowing about your target audience? Do you understand the importance of identifying your target market? Your product/service should be helpful for a specific audience type, or your target market. 

What Is The Target Market?

The target market is the market that a business focuses on when launching a new product/service. This market comprises an audience or people who would likely use your product/service. These are the end-users who will end up using your product/service. 

For instance, a business that manufacturers walking sticks will treat elderlies as their target market. Similarly, a company that makes microwaves will treat bakers, chefs, and people interested in cooking as their target audience. 

What Is A Good Target Market?

How do you separate a good audience from a wrong audience? Should you focus more on the bad audience, or should you let them go? This is when knowing a good target market is essential. 

An ideal or good target market should be:

A Good Target Market Is Specific

Amongst your target market, there would be audiences that aren’t interested in your product, no matter what. They would never make a purchase, will never engage, and stay disinterested. Letting go of such an audience is beneficial. Spending your time on such an audience would reap no benefits. Therefore, such an audience is general and should not be your prime focus. 

Only ‘specific audience’ out of your target market should be focused on. 

A Good Target Market Is Backed By Data

Defining your target audience on gut feelings and assumptions will lead you nowhere. At the time, you will have a list of the hypothetical target market of no use. Data should reflect all the inclusions and exclusions on the target market list. Such data should be collected from a reliable source that provides accurate data of the audience. Email IDs and social media profiles can help you rectify and double-check the collected data. 

A Good Target Market Is Consumer-Centric

The people that are more likely to contribute to your conversion rate/sales should be skimmed. You will know after a while which customers are genuine and show interest in your brand/product. Keep engaging with such customers and not those who do not want to engage with your brand. 

Email sequence marketing helps a lot in identifying interested customers from non-interested customers. Also, the cart abandonment rate and other similar metrics help a lot. 

Why Is It Important To Identify The Target Market?

Helps In Defining Product Description

Product description helps your target audience learn more about the product. Both product descriptions and target audiences are interrelated. You need to know your target audience better to provide a better and concrete description. You can tailor the product description accordingly if you know your target market’s likes and dislikes. For instance, for a product description of a fabric, mentioning the type of fabric is essential, along with its cleaning instructions. The product description would also include how to style it (if on an eCommerce website). 

Therefore, identifying the target market helps know the audience’s problems regarding your product and eliminate them by providing solutions to them in your product description. For instance, when buying any fabric, the first thought is to know about its maintenance and care (like needing a dry clean, no tumble dry, etc.). Thus, product descriptions define the same with the help of identifying its target market first. 

Easy To Manage User’s Expectations

Identifying the target market is also closely related to managing users’ expectations. For instance, if your product is a wheelchair, knowing the design of the wheelchair will help you target your audience better. 

Defining your target market, in this case, is of utmost importance. Would your product cater to the needs of only elderlies suffering from stroke, dementia, disability, or to people of younger age with special needs as well? If you know your user’s expectations better, you will fulfill them better with your product/service. 

Doing so will most likely add to the number of satisfied customers that would further suggest to other people about your product. Therefore, identifying the target market, their expectations are essential. 

Allows Identification Of The Marketing Tools To Use

Identifying and understanding your target market helps you put the right marketing tools in place. Focusing not just on the online marketing tools, you can use the traditional means of marketing as well, depending on the habits and preferences of your target audience. 

If your target audience is the young generation/students, you can use social media, websites, and apps, i.e., digital marketing tools, to garner their attention. At the same time, print media like newspapers, flyers, and signages work well. 

In other cases, if you are targeting elderlies, you need to prefer television, radio, print media more as your marketing tools. 

Helps In Framing Business Strategies

Identifying your target market makes it easy to frame business strategies as well. You can adapt your business strategies to match the needs and wants of your audience. Instead of working on providing everything to everyone, catering to a particular segment of the audience helps businesses provide better customer satisfaction, build brand loyalty and result in consumer retention. In short, this will enhance the number of repeat purchases. 

Helps In Product Development

Identifying the target market helps you create more innovative products different from existing products. This provides a competitive edge. Studying your target market will offer you insights into needs that are not met yet. It also helps to identify the environment in which the product is sold. For instance, selling short dresses in countries that follow restraints on such dressing would be a total disaster. 

This allows business to develop their product accordingly such that it meets the demand of the audience rightly. 

For this, you can study the market demand, gap analysis, customer purchase journey, buying behavior, pricing policies etc. 

Helps In Studying Competitors

Well, make sure you can have the same target audience as your competitor. Plus, if you have just entered the market, it would be challenging to penetrate deeper into it if you follow the same basic strategies as your competitor. 

What should you do to set your business apart? You need to think out of the box. This could be in terms of product development and marketing strategies as well. Adding quick new features to your product can help it gain more attention. Similarly, providing freebies along with your product, special discounts, and offers are some of the market strategies that will allow you to divert your target market focus towards your product/service. 

You need to think differently from your competitors to establish that competitive edge. 

How To Identify/Determine The Target Market?

Identifying or determining your target market is crucial as well as time-consuming. Marketing practices form a great part of identifying the target market. 

To determine a target market, it is essential to understand and define your product/service fully. Next, it is essential to define the person/business likely to use your product. They could be defined upon various demographic factors like gender, age, preferences, geographical area, and much more. 

This process will allow you to understand the needs and preferences of the audience better. Apart from these, consumer data is a key in the world of the digital era. People benefit a lot from users’ private data that allows businesses to identify and know their target audience to the next level. 

What Information To Gather About The Target Market?

If it’s becoming a bit too overwhelming to know where to start from when collecting data about your target market, break down the data into small steps. To help you identify your target market better, here is some of the information to gather to start from.

The Categories They Fall Into

The basic criterion to identify the target market is demographic information (also mentioned above). A product/service may not only cater to a specific target market, especially if it is a household product like toothpaste, your target market will be too wide. 

What to do in such a case? No worries, start with gathering basic information like marital status, age, gender, occupation, income level, geographical area, and socioeconomic status (this will help you decide the product’s price). Consolidate the data gathered from such categories and find the common points. This will help you frame a common marketing strategy that will fit all. This process is also known as segmentation. 

Under segmentation, the target market can be further identified based on psychographic factors, behavioral factors, distribution channels etc. 

When Are They Free?

After identifying your target market, delving deep into their hobbies and their free time will help businesses advertise and market their product accordingly. In the age of social media, identifying your target market’s free time is thoroughly useful. If you know when your audience is available on social media sites, it will help you schedule your posts accordingly. 

Knowing about their daily activities and interests will help you create your social media posts accordingly. The same goes for email marketing. If you are aware of when your audience signs in, it increases the chances of your email being viewed. This will help you engage with your audience better and increase your brand’s visibility as well. 

Where Do They Reside?

The geographical area of your target market is another important piece of data to gather. Each country, state, and region follow its own culture, religion, tastes, and preferences. Do they follow the westernized culture or the traditional culture? Do they have access to mobile phones, internet, or are they still dependent on radios, pamphlets, and television for their first-hand information? 

Depending on this information, businesses can connect to their audience accordingly. You can market your product/service accordingly. Will you be able to target your audience through digital marketing or traditional marketing? You will get clear answers to such questions. 

Why Should They Purchase From Your Business?

When identifying your target market, it is essential to ask this question.

• Why should your target market buy your product/service?
• What benefits does the product or service provide?
• Why should they choose your product/service over others?
• What additional value does your product provide?

Knowing the answers to these questions is crucial. Once you know them, it is also essential to let your audience know the answers to such questions in their native language. You can make your blog posts, advertisements clear enough that make it easy for the target audience to know these answers. 

When Do They Make A Purchase?

This question is a bit linked to the target audience’s free time, depending on the sort of business you have. This is because your audience is likely to purchase in their free time or otherwise when they require a product urgently. For instance, businesses like wedding photographers and event management know how it gets more clients during a particular season. 

Therefore depending on your business, you can alleviate your marketing strategies during such a period. For instance, the demand for umbrellas increases during the rainy season. As a business, you can come up with innovative designs and concepts to make your product more viable than others. 

For this reason, collecting the target market data is important so you can serve them the best hospitability and experience. 

Their Channel Of Communication

Another important piece of information to gather about the target market is their means of communication with your business. You often find these questions in surveys that say, “how did you come across our product/service?” This question is usually followed by a few options like social media posts, website, marketing campaigns, paid search advertising, etc. 

Why do businesses ask such a question? Knowing the channel of communication of your target market helps you divert your marketing efforts in the same route. If your target market mostly prefers using social media and marketing through other means like print media, it will make no sense. 

Currently, social media, emails, and websites are the best free services to communicate with your target market. It lets you engage with them appropriately by following various social media and digital marketing strategies. For instance, giveaways, referrals, and paid promotions work well for social media. Similarly, for increasing traffic on your business website, taking the help of an SEO strategist, content marketing, paid advertising works wonders. 

How Your Target Audience Is Likely To Visit You?

Are you a local store or an eCommerce store? Do you provide drive-in services or mainly attract walk-in customers? These are some important questions to figure out. This will help the business know where to invest the right money. If your business is land-based, you need to invest in making your storefront attractive and welcoming, place direction signs at the right places etc. 

On the contrary, for an eCommerce store or an online business, the focus would be on improving your website’s performance and Google search rankings. If it’s a drive-in, the focus would be to maintain a proper parking area with maintained pavements. 

Thus, businesses should not overlook how their target market is visiting them. 

When Are Buyer Personas Important?

At this point, you have clearly identified your target market. You can place your product before your target market. But do you still feel disconnected from your audience? This is where buyer personas come into action. They help you to understand your target market even better. 

Buyer personas are data representing the ideal customer you want to serve and attract. These personas are made from data collected for market research. Buyer personas are part of the target market found from within it. 

Some of the target market audience turns into buyer personas. Buyer personas are much more specific and let you know the buying behavior of your buyers. Buyer personas deal with every buyer individually. It carefully analyses and attracts buyers according to their mindset. Thereby, it helps to further help in identifying how you should approach them and understand their challenges to let them covert. 

It treats every customer as unique and approaches their needs accordingly. Here is an example that will help you differentiate between a target audience and a buyer persona. 

For instance, a target audience for an EdTech business would be students between the age of 12 to 25 who lives in Adelaide and are preparing for either their school, college, or competitive exams. 

Amongst these, a buyer persona would be a particular student, let’s say named Valentina, a student of class IX who takes the help of English lessons on the app and would likely be taking math courses as well. 

Targeting a buyer persona helps businesses retain their customers as you will provide customized and exceptional attention to them. As in this case, you may personally call them to know if they are having any trouble following the courses and how you can help the student further. 

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We know business growth isn’t easy. But we make it easier. Faster. More sustainable. How do we do that? By partnering you with the processes and insight you’re missing and the people who’ve been through it all before. And because we do it as a service, it’s brilliantly affordable.

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The target market is the market that a business focuses on when launching a new product/service. This market comprises an audience or people who would likely use your product/service. These are the end-users who will end up using your product/service. For instance, a business that manufacturers walking sticks will treat elderlies as their target market. Similarly, a company that makes microwaves will treat bakers, chefs, and people interested in cooking as their target audience.

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Target Market Essay Examples

A Target market is a group of customers with similar attributes and characteristics within a particular setting that makes them potential consumers of a manufacturer’s good or service. Discovering the target market for a product helps a group or company to identify the set of people such commodity appeals to facilitate their sale revenue. One of the elements that constitute a successful is finding the right buyers which helps you reach the target market essay.

Many companies consider the characteristics of likely buyers as a factor for their designs, product packages, and other ideas.

A good target market essay breaks down the necessary features to look out for when searching for an audience amongst other features.

Factors such as age range, lifestyle, income, and location come into play when considering the users for a product. Other details like their interests and hobbies may be used as determining factors. If you read a good essay on the demographic target market, you will get every essential information on the consumer audience selection.

The purpose of this report is to know the three market selection process, which is market segmentation, market targeting, and market positioning. The business will be opened is supermarket which sell the most important and customer needs. There are three main parts of market selection. First thing the company must segment the market then divides […]

Introduction The marketing plan operates at two levels: Strategic marketing plan: – This plan lays out the target markets and the values propositions the firm will offer, based on an analysis of the best market opportunities.Tactical marketing plan: – This specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels and service Market […]

Has Martha identified the best target market for Trap-Ease? In other to ascertain whether Martha has identified the best target market for Trap-Ease we will look at what is a market and what does target markets involves. A market is the set of actual and possible buyers of a product or services and marketing involves […]

Introduction This case analyses the market strategy behind the introduction of Exact! Universal Apparel. In the past, the Foschini Group owned a chain store called Pages. Pages had been a successful chain in the past, but it targeted a different market to the target market identified by Exact!. Pages target market was focused on the […]

 Executive Summary Qantas is one of the most recognised and longest running Australian companies. It is the world’s second oldest airline, and has a successful history to uphold (Qantas Web Site, 2008). Identification of target markets is imperative to Qantas’s success. Mortished (2003) explains that Qantas uses Behavioural segmentation to select its target market. This […]

You are the General Manager of a new entrant in the mobile phone network market, competing with the likes of O2, Vodafone, Meteor and 3. Like these competitors, you see your main target market among young, highly marketing literate consumers. Your marketing manager has mentioned stealth marketing as a possible way of increasing market share […]

Target Market: The success of the Baby Einstein concept depends upon identifying the appropriate target market. Because Baby Einstein provides a line of multimedia products and toys that specializes in interactive activities for children aged 3 months to 3 years old. Where Discovery Begins” is what we market and new/expecting parents who are working professionals, […]

Market segmentation is the fundamental component of a market-based strategy. A market segment is a specific group of customers with distinctive customer needs, purchase behaviours and different descriptive characteristics. (Best, 2000) By categorizing markets into sub sectors, targeting marketing effort in such a way as to meet the technical and other requirements of each of […]

The marketing concept is a business philosophy that challenges the three business orientations we just discussed.The marketing concept holds that the key to achieving its organizational goals consists of the company being more effective than competitors in creating, delivering, and communicating customer values to its chosen target markets. The marketing concept rests on four pillars: […]

Burger King target market strategy analysis. The Media Strategy explains how messages are delivered to consumers. It involves identifying the characteristics of the target audience, who should receive messages, and defining the characteristics of the media. The analysis consists of the following sections, completed by the proceeding team member: Communications Objectives Target Audience Recommended Media […]

Marketing Plan Unidiz Suites Submitted Executive Summary This paper aims to summarize the plans and strategies that will increase the sales/ rentals of the Unidiz Suites. The Unidiz Suites, unlike any other dormitories/ apartments offers male/female room for rent and accepts male/female bed spacers. Dorm rooms can be double or quadruple-occupancy occupancy in size. In […]

Hewlett Packard Hewlett Packard is a technology solutions provider to consumers, businesses and institutions globally. The company’s offerings span IT infrastructure, global services, business and home computing, imaging and printing. Hewlett Packard company headquarters are located in Palo Alto, California. HP serves more than one billion customers in more than 170 countries on 6 continents. […]

More and more, experts in the field of strategic planning and management are advocating for more attention to be paid on strategic thinking, and recommending for it to be considered a separate and distinct stage in the strategy planning and executing cycle. Results from the strategic thinking exercise feeds directly into creation of the strategic […]

Trap-Ease America: The Big Cheese of Mousetraps Synopsis A group of investors has purchased from an inventor the U. S. rights to sell a patented, innovative mousetrap. The group has hired Martha House to manage the company that includes assuming responsibility for sales and marketing. Trap-Ease America has targeted the trap to housewives, whom it […]

Segmentation Analysis Literature Review To match the needs of costumers, consumers and producers, not only in case of private people but of businesses or companies, target marketing is needed. To obtain the particular market firstly a marketer has to prepare a market research, after which he segments the market, and then targets a single segment […]

Staples Case Study Questions 1-6 1. In 1985, the office supplies industry was highly fragmented with many companies manufacturing unique products rather than a broader based catalog. Larger wholesalers were few, so consumers had to order supplies from several companies rather than from one immediate location. New technologies were also finding their place into businesses […]

The first step is to conduct a situation analysis in order to evaluate the marketing challenges of an organization systematically. This step needs to be completed before solving the problem, even if it is not included in the written case brief. Step 2: After conducting a thorough situation analysis, it becomes possible to identify the […]

Social networking sites like Backbone, Twitter, Youth often get attention and a large number of audiences are interested in content Of the film, evaluate and review on this movie. 1 . 5 Benefits Although customer’s interest often change, with famous series like Harry Potter, it has created trust and expectations of customers who continue to […]

Cryptographic segmentation is based on lifestyle and values. In developing a target market or markets for Goldbricks Restaurant, several factors were considered including the tastes and habits of prospective customers, their financial and educational demographics, and the concentration of these customers in a given geographic area. While education is not a requirement for the target […]

The alcoholic beverage market in India has seen consistent growth over the years, with hard spirits being the most popular choice among consumers. Beer only accounts for 4% of total alcohol revenue and per capita consumption of spirits is 65% of the global average, while beer consumption is merely 3%. Compared to countries like Hong […]

The significance of the mission statement’s destruction cannot be underestimated. This statement is a written proclamation of an organization’s basic goals and objectives, which generally remain consistent over time. Since Mary plans to introduce a new hygiene product via Anyway, it is probable that her mission statement will vary from those of competitors who provide […]

Using all the information available to you, complete the following tasks: Analyses the arguments for Main’s proposed strategy Analyses the arguments against Main’s proposed strategy Make a justified recommendation on whether Main’s proposed strategy should be adopted. 34 marks) One reason why I feel that yes Sound and Vision pal should adopt Main’s strategy of […]

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Target Corporation: Performance, Operations, and Marketing Essay

Introduction, history and background of target stores, the nature of the industry, company operations and marketing, demand analysis, cost analysis, profit analysis.

This paper examines the background and economic performance of the Target discount retail chain against Walmart as benchmark, by reason of the fact that the latter is the global leader and sets an example of numerous operating efficiencies in retail. Both are listed companies that rank in the top 28 of the Fortune 500.

The paper traces the origins and retailing experience of Target to 1903 in small town Minneapolis and shows how the chain began to take off only after embracing the still-popular discount mass merchandiser approach to retail. In the process of building and stocking hundreds of stores throughout the nation, Target appears to have gained operating efficiencies and sustained an ethical sense of HR management, despite important omissions in adopting logistical efficiencies that propelled the more aggressive category leader to its preeminent position today. An attempt is also made to carry out demand, cost and margin analysis based on the economic theory of the firm.

Target Corporation is a mass-merchandise retailer with $65 billion in annual turnover as of end-2008, headquartered in Minneapolis and listed in the New York Stock Exchange (TGT). Under the “Target” and “Super Target” trademarks, retail operations are nationwide with the exception of Vermont.

Among discount retail chains, Target ranks second only to Wal-Mart Stores Inc., the latter boasting $404 billion in turnover (as of January 31, 2009 end of the company’s fiscal year) that makes it the world’s largest public company and largest private employer as well. Unlike Walmart (the trade name), Target has no foreign subsidiaries. Target Australia, also a discount retailer, merely licensed the trade name and logo.

Even as a far second in its industry, the revenue performance of Target is robust enough to land the chain 28 th rank in the 2009 Fortune 500 and, by the same token, earn a place in the Standard & Poor 500 stock index.

Like Walmart, Target had its start in the suburbs and obscure byways of rural America; both also took over existing retail concepts.

Target had much the earlier head start since continuous retail operations can be traced back to founder George Dayton taking over a tenant of his, the Goodfellows department store in 1903, nearly sixty years before the “Walton Five and Dime” came into being. Other than renaming the operation the “Dayton Dry Goods Company” and it again to the more concise Dayton Company in 1911, George Dayton seemed content with the solitary retail operation in Minneapolis.

Beginning in the 1950s, however, Dayton felt it was ready to participate in the great postwar boom that lifted the U.S. manufacturing and retail sectors. In quick succession, growth took the form of ranging far to acquire Lipman’s department store in Portland (OR), innovating with a world first – the Southdale completely-enclosed (and presumably air-conditioned) two-level shopping center, located in the Minneapolis suburb of Edina – and commencing chain operations with a second Dayton store nearby.

In 1962, the Dayton Co. acted on the advice of employee (and eventual partner John Geisse) to found the discount merchandise store named “Target ” to distinguish it from, and avoid cannibalizing, parent store business. The first branch opened in the Saint Paul suburb of Roseville. So optimistic was Dayton about the retail concept that three more stores were built around Minnesota before yearend. That same year, Sam Walton parlayed his long years of undercutting competitors with lower mark-ups at his “Walton’s Five and Dime” by seizing on the discount mass merchandise concept and opening the first “Wal-Mart Discount City” in Rogers (AR).

The four Target Stores went through three years of birthing pains and consistently lost money. In 1965, however, the group finally earned money on sales of $39 million and used the profits to fund a fifth store, also within the state. By 1967, Target had two more branches in Minnesota, branched out-of-state with two locations in Denver and gone public. Fairly rapidly, as of 1970, the company had diversified into in Mississippi, Texas, Oklahoma, Wisconsin, and Detroit, for a total of 24 stores and reaching the 24-location mark.

Since then, expansion continued along the same lines, leveraging both acquisition (e.g. Mervyn’s in 1978, Ayr-Way in 1980, FedMart in 1982, Gemco in 1986, Marshall Field’s in 1990, Fedco in 1999), organic growth, diversification into catalog-based direct marketing, establishing an e-commerce operation, and internally-generated geographical diversification.

As of 2009, Target boasted 1,683 stores all over the nation. This is just over a third of the 4,330 domestic Walmart locations as of October 2009, segmented into supercenters (62.5%), Discount Stores (20.4%), Sam’s Clubs (13.6%), and Neighborhood Markets (3.5%). In addition, the category leader boasts 2,980 branches in 14 other countries.

It is strong testimony to the sustainability of the discount mass merchandise retailing business that Target itself rode out the depths of the current recession by continuing to expand, opening 94 new branches (net of closings and relocations) in 2008 and 2009. This sustained effort at geographic expansion included arriving in Alaska and Hawaii at long last.

Differentiation

The nature of the discount retail industry means that there is little differentiation between the different discount retailers. Designed to compete on price, discount retailers do not have much leeway to lower their prices further to compete with other retailers with the same pricing model. Hence it is important for Target to establish its differentiation from other discount retailers. Target holds that it offers upscale, trend-forward merchandise at reasonable prices. Target believes that it is offering affordable prices because it reduces expenses related to bringing the goods to the customer and not necessarily procures shoddy goods. This is to be contrasted with the traditional model of discount stores which are primarily competing on prices by means that border on the ruthless and unethical. Walmart, for example, is notorious for paying low wages, uneven health insurance coverage, procuring goods from China, resisting unions, and going to the extent of opening up a procurement center in India from which the famous “$4 a prescription” drugs have been rolled out throughout Florida.

The familiar featureless “big box” appearance of discount retailers has given way to a degree of differentiation based on store exteriors and size. At Target, the standard store runs from 95,000 to 135,000 square feet (12,000 m²) sales floor area. Standard product assortment consists of hard goods, “softlines” (apparel), and some non-perishable groceries. In addition to the standard merchandise mix, Target stores offer seasonal merchandise, Target Pharmacy, Target Optical, Target Photo portrait studios, garden centers, the “Food Avenue” area for local food concessionaires, Starbucks, and a Pizza Hut Express.

The next larger branch type is “Target Greatland”, general merchandise superstores that are somewhat larger at 150,000 square feet in selling area. These have a wider variety of general merchandise than the basic Target Store but the space devoted to an adequate selection of groceries is neither consistent nor satisfactory.

SuperTarget hypermarkets, each roughly 175,000 sq ft in sales floor area, are the largest in the chain. The greater scope of the hypermarkets makes a complete selection of groceries, fresh produce, bakery and deli possible. Besides the usual food and photography concessionaires, hypermarkets house either a Wells Fargo Bank or U.S. Bank. Unlike direct competitors Wal-Mart Supercenters and Meijer, however, no SuperTargets offer late-night shopping.

While clearly positioned in the discount retail business, this Target effort to differentiate itself from competitors attracts a younger customer base than its competitors. The average Target shopper is 41 years old, younger than the median age for any other discount store in competition with Target. Another way to differentiate itself from competitors is Target’s efforts to brand itself as a discount department store. Unlike other discount stores no music is played on the premises nor does it advertise in store using a public address system. Target malls also feature wider aisles, drop ceilings and cleaner fixtures which further help it distance itself from other discount stores.

As a “full-service” discount department store, Target boasts a sales mix that is fairly evenly spread among toys and electronics, home furnishing, apparel and the food/beverage department. So-called “consumables and commodities” (essentially fresh produce, processed/canned and frozen food) comprise both a marketing opportunity and revenue constraint. The opportunity exists in that consumables are the traffic and frequency builders of any grocery type. But since there is little to distinguish steaks, turkeys and corn on the cob from those available at Safeway or Kmart, mark-up practices at Target must accommodate shoppers who are distinctly price-sensitive.

Target copes with this situation by, among others, maximizing the shelf space given over to house brands and building distribution centers in strategic locations around the country so as to reduce average transportation cost. As well, the essential viability of the department store model rests on maximizing share of every family’s shopping budget by offering the convenience of getting discretionary goods and the three other classes of dry goods under one roof and in one shopping trip.

Beyond this core appeal, Target maximizes revenue stream and margins with such allied operations as:

• Global supply chain –Target Sourcing Services/The Associated Merchandising Corporation (TSS/AMC). With 27 buying offices, 48 quality-control units, seven commissionaires and staffing of 1,200 dispersed the globe, TSS locates dry-goods merchandise everywhere; evaluate suppliers’ factories for quality, labor and transshipment issues.
• Target Financial Services (TFS) operates the Target National Bank that is the official issuer for Target REDcard, Target VISA, the Target Check Card debit card, and the Target Loyalty Card; and monitors GiftCard (gift certificate balances).
• Target Brands, which has direct responsibility for all of the chain’s private label and house brands such as Archer Farms and Market Pantry processed foods, the Sutton & Dodge line of premium meats, and Trutech electronic appliances.
• Target.com, the e-commerce operation that is ran independently from the retail chain. Among others, target.com is a useful channel for earning the last bit of revenue out of seasonal overruns and house brands.
• Daring to take over even the tenant shopper services kiosks that clog every mall and superstore around the country. In 2005, for example, Target took over the photo labs of Eastman Kodak subsidiary Qualex in all stores. While continuing to use Kodak equipment and processing supplies, the chain has linked up with Yahoo! Photos, Photobucket and Shutterfly.

Demand analysis serves two primary managerial objectives. First, it provides insights to properly manage demand and second, it helps forecast the sales and revenue portion of a firm’s cash flow stream. Demand relationships are best represented in the form of a schedule (table), graph or algebraic function. The demand analysis is one of the most important factors when evaluating the company’s financial position from an economic standpoint. It is also the simplest form of demand relationship.

Target Corporation sells a wide variety of products and services in its retail segment. Analysis of any one product would be counter-productive. For example, analysis of Tide detergent sales of Target would not be informative since Tide is also sold in other major retailers like Walmart. Total sales revenue is available in its annual report. Also available is the Gross Margin which is the result of dividing the gross margin dollars by sales. The Gross Margin is the best indicator of price vis-à-vis total sales. Since Target is a retailer of consumer goods and for the most part simply passes on the products from the manufacturer, its Gross Margin is essentially its mark-up and total sales represents quantity sold. Thus, the elasticity function can be applied using two figures as substitutes. After all it is projected that at some point raising their margin too high will result in a drastic decline in revenues as customers chose to purchase the products from other retailers who in turn purchased them from the manufacturer at the same price.

Table 1: Annual Sales and Gross Margins

It can be noted that the gross margin has stayed fairly constant during the entire period covered. This indicates Target Corporation’s unwillingness to drastically alter its pricing model. Instead, changes in actual prices of goods at Target are the direct result of increases in the price charged by the manufacturers. Any increase in sales and therefore revenue are the direct result of increased volume which is a function of the number of customers.

In the absence of information about unit sales/demand, it has not been possible to estimate demand curves and elasticities. However, one notes from the financial highlights in Table 2 above that Target may be the more efficiently managed company. Though the scale of operations is very different – Target has only four stores domestically for every ten of Walmart’s, the latter has more than four times as many locations on a global basis, Target turnover is just 16% that of Walmart, the leader rings up an average of $54.9 million per store compared to $37.4 million for Target, and Walmart grew three times faster even in the depths of the recession – the disparity in operating income and earnings per share is decidedly much narrower than one would expect.

Target follows a cost-plus profit and pricing strategy. This owes to the fact that other retailers can easily be substituted for Target if they chose to price their products too high. After all, most of Target’s retail items are available in other major retailers. Target’s products are highly elastic. It is also difficult to quantify brand loyalty to Target as a brand (unless one has access to “Guest Card” and loyalty program statistics) since there is little to stop customers from shifting their business to other retailers. Every item in Target, save perhaps for private label brands sourced via exclusive suppliers abroad, can easily be substituted with similar merchandise offered by competitors.

Elasticity is given by the following formula

As mentioned, given the nature of Target’s business, unit price cannot be obtained. Target sells a wide variety of products at competitive prices. Hence price for Target is best represented by its gross margin. Quantity demanded can be obtained using the sales revenue of the company from its pure retailing operations.

Demand for Target itself as a retailer is highly elastic. The chain cannot change prices too drastically without affecting demand. Among the explanations for this is the ready availability of many substitutes. Furthermore, majority of goods available at Target are consumable products as opposed to durable goods. Consumables are empirically inelastic.

When the Price Elasticity of Demand of a product is greater than one in absolute value, the demand is said to be elastic; thus, it is highly responsive to price change. Demand with an elasticity of zero is said to be perfectly inelastic therefore the demand is completely unresponsive to price change. When a demand has an elasticity that is less than one in absolute value, it is said to be inelastic, suggesting that the demand is weakly responsive to price changes.

The Discount Store industry model is relatively simple but highly competitive. There is little actual differentiation between one company and another. Target’s cost structure consists of many expenses that correlate directly and indirectly to their marketing, production and sale of discount consumer goods. These expenses are; Cost of goods sold, marketing, selling and administrative expenses, advertising and promotion expenditures, restructuring and litigation charges. A large portion of Target’s cost structure is consumed by the cost of procuring the goods that are sold in the stores. Only 30% of the total average price of a product goes to the gross profit of the firm; more than two-thirds (70%) goes to the cost of the products sold.

Managers are interested in the economic cost of resources used. Economic cost refers to the cost of attracting a resource from its next best alternative use (i.e. opportunity cost). Managers seeking to make the most efficient use of resources to maximize value are concerned with both short term and long term opportunity costs. The short run cost-output relationships can help managers to plan the most profitable level of output, given the capital resources that are immediately available. Long-run cost – output relationships involve attracting additional capital to expand or contract the plant size and change the scale of operations.

Target is no exception to this fundamental economic principle. The 2008 total operating costs for the Target business segment, where the retail division belongs, is shown below. (Target Corp., 2009, p. 71)

The business segment includes all of Target’s business units. This includes its credit card revenues as well as its retail business. The retail segment is difficult to quantify due to the very large number of products Target sells to consumers. Target also has in-house brands in addition to branded goods from domestic manufacturers. However, Target’s financial reports do not publish per product sales or revenues and instead lumps it all into the category retail sales.

Using the information from the above figure the simple marginal revenue and marginal costs can be derived. To simplify the analysis, the entire retail business has been assumed to be one product.

Given the highly competitive nature of the Discount store industry, Target faces a demand (D) curve that is identical to its Marginal revenue curve (MR), and this is a horizontal line at a price determined by industry supply and demand.

Both Walmart and Target belong to the Retail industry under the Discount store section. Both companies are dominant in their industry. In fact, they are number one and two respectively in their industry. However, other competitors have significant share in the industry as well. Barring any differentiation, both companies are in perfect competition. The cut-throat industry where they belong has numerous substitutes and they are forced to compete on the basis of price.

Target Economic Profit

The following format was used to compute the economic profit of Target

Economic profit = Total Revenue – Total Cost

• 2005 Economic Profit = $52,620 Million – $50,212 Million = $2,408 Million
• 2006 Economic Profit = $59,490 Million – $56,703 Million = $ 2,787 Million
• 2007 Economic Profit = $63,367 Million – $60,518 Million = $2,849 Million
• 2008 Economic Profit = $64,948 Million – $62,824 Million = $2,214 Million

It can be seen that the recession has had a negative effect on Target’s otherwise constant growth over the last four years. Total revenues grew apace with total costs largely because Target’s price plan is based on their total costs in bringing the products to the consumer.

The Target chain traces its origin and experience in department store retailing to early in the last century. For many decades, however, growth was slow. By comparison, the benchmark chosen, discount mass merchandise industry leader Walmart seized on the “big box” concept quickly, seized on efficient logistical methods, and grew much faster from the sixties to the present to become the largest publicly-listed company and largest private employer on a global basis. Target has also expanded energetically since the late sixties and early seventies but is just one-sixth the size of Walmart today by revenue.

Two things stand out in this brief economic analysis. First, economic profit at Target shrunk somewhat during 2008, arguably the worst of the current recession, because operating costs climbed faster that moribund total revenue. Despite the substantial disparity in their respective scales of operation, secondly, Target may be the more efficiently-managed chain.

For the rest, given the sheer diversity of products each carries and the fact that volume turnover is not part of regulatory reports, it has not been possible to calculate precisely the required demand and cost analyses.

Rowley, L. (2003). On Target: How the world’s hottest retailer hit a bull’s-eye . Hoboken, (NJ): John Wiley & Sons.

Target Corporation (2009). Annual report . Web.

Walmart Stores.com (2009). A nnual report . Web.

• Chicago (A-D)
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IvyPanda. (2024, April 17). Target Corporation: Performance, Operations, and Marketing. https://ivypanda.com/essays/target-performance-analysis/

"Target Corporation: Performance, Operations, and Marketing." IvyPanda , 17 Apr. 2024, ivypanda.com/essays/target-performance-analysis/.

IvyPanda . (2024) 'Target Corporation: Performance, Operations, and Marketing'. 17 April.

IvyPanda . 2024. "Target Corporation: Performance, Operations, and Marketing." April 17, 2024. https://ivypanda.com/essays/target-performance-analysis/.

1. IvyPanda . "Target Corporation: Performance, Operations, and Marketing." April 17, 2024. https://ivypanda.com/essays/target-performance-analysis/.

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IvyPanda . "Target Corporation: Performance, Operations, and Marketing." April 17, 2024. https://ivypanda.com/essays/target-performance-analysis/.

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Industry Tips & Tricks

How to market to your target audience, by lee townsend /, april 23, 2024 at 8:57 am.

We are incredibly lucky to live in a new Golden Age of reading. Brick and mortar stores are gaining popularity thanks to online spaces like BookTok and Bookstagram, and the spillover is positively affecting indies and ebooks as well! There are more readers now than ever before – the question is, how do we reach that audience?

Understanding and reaching our target audience is key to making our books truly shine. In this guide, we’ll delve into the art and science of marketing to your target audience, specifically tailored for independent authors who are navigating the exciting world of self-publishing.

Understanding Your Target Audience:

Before diving headfirst into marketing strategies, it’s crucial to understand who our target audience is. Audience research requires a keen understanding of human nature; luckily, as authors, you already have all the tools available to dig deep into your readers’ minds. Let’s start with the easy stuff.

Identify reader demographics. Chances are that you already know this information, but it’s always good to refresh. Think about your main characters. What are their genders, ages, ethnicities, political affiliations, even their general region of existence? You will likely find a lot of overlap between your protagonists and target audience, so it’s important to keep these attributes in mind. We’ll need to remember this information, so be sure to write it down somewhere.

Creating Audience Personas:

Once you’ve identified the demographics of your target audience, it’s time to dig a little deeper by creating an audience persona. Luckily, as an author, you should already know exactly how to do this!  An audience persona is a fictional representation of our ideal reader. Creating these will help us visualize and empathize with their needs, desires, and pain points.

Put yourself in the shoes of your ideal reader. What are their other interests? Where do they go to find your books? What’s their coffee order? Figuring out all these little details will help you connect with your readers and market to them more effectively. Definitely consider making multiple personas, and think about them every time you consider a promotion!

Tailoring Your Marketing Strategies:

Now that we have a clear understanding of our target audience, it’s time to choose the right tools and tactics to reach them. How do you choose between newsletters, book blogs, websites, and what feels like hundreds of social media platforms? This is where your target demographic information comes in! Take those attributes that you wrote down and overlay them with each platforms demographics.

Writing for older women? You’ll want to focus on Facebook and emails. Younger women who love aesthetics? Try Instagram and Reels! It could also be beneficial to research into more niche platforms such as Pinterest and Tumblr. Wherever your audience congregates, that’s where you should focus your marketing.

Engaging with Your Audience:

Dare I say that this is the most important tip? Now more than ever, people are looking for somewhere to belong. Many readers find that place in “bookish” communities. These are avid book worms who find likeminded souls on places like Twitter, Threads, TikTok, and book clubs – and many of these readers will niche down even more to a specific author or sub genre.

Figure out which of these already established communities fit your works the best and then join that community yourself! Building meaningful connections with our readers goes far beyond the pages of our books. By adding to that sense of community, we can transform casual readers into devoted fans and advocates. Genuine interaction fosters loyalty and enthusiasm among our audience, and all you need is a few true fans!

Measuring Success and Iterating:

We’ve done all this work, but we won’t know how well it works until we look into the numbers! Each of the platforms we use, from social media to emails, have ways for us to view analytics. Those numbers are gold! Take into account what is performing well and what isn’t. Which posts are your “true fans” engaging with and which bring in newer followers? Make more content like those, and keep experimenting as well!

Try to go through these steps every couple of months to see if anything has changed… You might be surprised by how much progress you’ve made!

As independent authors, the journey towards marketing success is an ongoing process of refinement and adaptation. By understanding who our readers are, crafting compelling audience personas, and tailoring our marketing strategies accordingly, we can elevate our books and expand our reach in meaningful ways.

Remember through all of this that writing is about the genuine connections we forge with our readers. Here’s to reaching new heights and touching the hearts of readers around the world with our stories!

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