Identifying Target Markets

Definition: 

A target market is a group of consumers that share similar characteristics to which a business intends to sell. 

The target market is identified through market research and the process of market segmentation.

Market Segmentation: The process of sub-dividing (segmenting) the mass market into definable groups who share similar characteristics. This process enables a business to determine their target market. Variables to segment the mass market :

• Demographic: income, education, occupation, age, gender

• Geographic: urban, suburban, rural, residence type

• Psychographic: lifestyle, interests, self-conception, sub-culture

• Behavioural: buying behaviour, brand loyalty

Individual products are not designed for everyone; firms must know their audience (who are they selling to?) in order to make their marketing strategies cost-effective (least expense for most sales). This allows for customer needs to be met most directly, leading to higher sales and higher profitability.

Primary Target Market: core group to focus marketing activities on.

Secondary Target Market: peripheral groups that may perceive product usefulness, but are not directly targeted by core marketing activities.

Mass-Marketing: Seller mass-produces / distributes / promotes one product to all customers. Similar needs met across major social divisions. Few products are directed to the mass market; most position themselves to meet specific needs of a segment of the mass market.

Niche: A narrow segment of the market to which a business orients its activities.

Identifying a target market allows a firm to shape a coherent marketing strategy to communicate to and persuade them to make a purchase. 

• Product / service features are exactly what they need, 

• Promotional campaigns have messages that are exactly what they want to hear and are in locations where the target market will see them, 

• The product is priced in a way that attracts the target market, and 

• The product is available through a channel that is perfectly convenient for them. 

Marketing activities will be highly efficient and cost-effective.