What is a target market?
A target market is a group of people who have been identified as the most likely potential customers for a product because of their common 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.
- A target market is a group of customers with shared demographics who have been identified as the most likely purchasers of a company's product or service.
- Identifying the target market is important in developing and implementing a successful marketing plan for any new product.
- The target market can also inform a product's specifications, packaging, and distribution.
How do I define the target market for my product?
Part of creating a new product is imagining the consumers who will want it.
A new product must fill a need or solve a problem, or both. This need or problem is probably not universal unless it reaches the level of indoor plumbing. It's more likely to be needed by a subset of consumers, such as eco-conscious vegetarians, science nerds, or outdoor enthusiasts. It might appeal to a teenager or a middle-aged professional, a bargain hunter or a snob.
Visualizing your likely target market is part of the process of creating and refining a product and informs decisions about your packaging, marketing and positioning.
What are the 4 target markets?
Marketers divide consumers into four main segments:
Demographic:These are the main characteristics that define your target market. All can be identified as belonging to a certain age group, income level, sex, occupation and level of education.
Geographical:This segment is increasingly relevant in the age of globalization. Regional preferences need to be taken into account.
Psychographic:This segment goes beyond demographic fundamentals to consider lifestyle, attitudes, interests and values.
Behavior:This is the only segment based 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 a target market example?
Each of the four target markets can be used to consider who the customer is for a new product.
For example, there are an estimated 100,000 Italian restaurants in the United States. Clearly, they have huge appeal.
But a corner pizzeria may appeal primarily, though not entirely, to a younger, more budget-conscious consumer, while an old-fashioned place with white tablecloths may be dominated by older people and families living in the suburbs. Meanwhile, a newer spot down the street might cater to a sophisticated, trend-conscious crowd who will travel a good distance to enjoy the restaurant's innovative menu and elegant wine list.
In each successful case, an experienced entrepreneur consciously considered the ideal target market for the restaurant and modified the menu, decor, and advertising strategy to appeal to that market.
Why are target markets important?
Few products today are designed to please everyone. Aveda's Rosemary Mint Bath Bar, available for $23 a bar at Aveda beauty stores, is marketed to the stylish, eco-conscious woman who will pay more 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 more for a luxury product.A pack of eight Dial Soaps is less than $5 on Amazon and is known to get the job done.
Part of successfully selling a good or service is knowing who it will attract and who will buy it. Your user base can grow over time through additional marketing, advertising and word of mouth.
That's why companies spend a lot of time and money defining their initial target markets and following up with special offers, social media campaigns, and niche advertising.
What are market segments?
Dividing a target market into segments means grouping the population based on key characteristics that drive their spending decisions. Some of these are gender, age, income level, race, educational level, religion, marital status and geographic location.
Consumers with the same demographics tend to value the same products and services, so narrowing down segments is one of the most important factors in determining target markets.
For example, people in a higher income bracket are more likely to buy specialty coffee from Starbucks than from Dunkin' Donuts. The parent companies of both brands need to know this in order to decide where to locate their stores, where to stock their products, and where to advertise their brand.
A company can 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 aimed directly at children. Your parents are the secondary market.
Target market and product sales
Identifying the target market is an essential part of a product development plan, along with manufacturing, distribution, pricing, and promotion planning. The target market determines significant factors about the product itself. A company may modify certain aspects of a product, such as the amount of sugar in a soft drink or the style of packaging, to make it more attractive to its target audience of consumers.
As a company's product sales grow, it can 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 that its national target market expands as its products gain more traction in the marketplace. Expanding a product's target market is an income opportunity worth taking advantage of.
How detailed should a target market be?
It depends. Generally speaking, a product can be designed for a mass market or a niche market, and a niche market can be a very small group, especially in the early stages of introducing a product.
Some carbonated drinks are aimed at an almost universal market. Coca-Cola had to expand into 200 overseas markets to continue growing its customer base.Gatorade is owned by Pepsi Cola, but the brand is positioned as a sports drink.Calling itself "Healthy, Sparkling, Prebiotic Soft Drink with Real Fruit Juice, Gut Health and Immunity Benefits", the Poppi soft drink brand is clearly aimed at a younger, healthier and trend-conscious target market.
What is a target market example?
Consider a casual wear company that is working to build its overseas distribution channels. To determine where your apparel will be most successful, do some research to identify your main target market. He finds that the people most likely to buy his products are middle-class women between the ages of 35 and 55 who live in cold climates.
It makes sense for the company to focus its advertising efforts on Northern European sites that have a significant female audience.
But first, the company might consider how to make its clothing more attractive to this target market. You can review your styles and colors and modify your advertising strategy to optimize your appeal to this new potential market.
What is the purpose of a target market?
A target market defines a product and vice versa.
Once the target market is identified, it can influence the design, packaging, pricing, promotion and distribution of a product.
A product intended for men will not be packaged in pink plastic. A luxury cosmetic will not be sold in a pharmacy. An expensive pair of shoes comes with a branded fabric bag and a shoebox. All these factors are signals to the target audience that they have found the right product.
the bottom line
Identifying the target market is part of the process of creating and perfecting a new product.
A target market can be translated into a profile of the consumer that a product is likely to appeal to. The profile considers four main characteristics of that person: demographic, geographic, psychographic and behavioral.