A Guide To Understanding Target Market

A target market is a group of people identified as possible customers for a company's products based on some shared qualities. As a corporation designs, packages, and distributes its product, identifying the target market guides the decision-making process. A target market can be divided into groups based on their age, location, income and way of life. Many more demographics could be taken into account. Their age, hobbies, interests, and professions may all be taken into account.

What Is A Target Market?

Target marketing involves segmenting a market and focusing your marketing efforts on one or a few key segments of customers whose needs and desires are most closely aligned with your product and service offerings. It could be the key to recruiting new customers, growing revenue and ensuring the success of your company. The beauty of target marketing is that it makes promoting, pricing and distributing your products and/or services easier and more cost-efficient, as well as providing a focus to all of your marketing activities.

Consider a catering company that provides food services at a customer's house. Rather than advertising in a newspaper supplement that is sent to everyone, the caterer would first select its target market. It might then target the intended market with a direct mail campaign, flyer distribution in a specific residential neighbourhood, or a Facebook Ad focused on customers in that area, boosting its marketing Return Of Investment (ROI) and bringing in more customers.

Facebook, LinkedIn, Twitter, and Instagram, for example, give extensive tools for businesses to target consumers based on market categories. A bed-and-breakfast, for example, may advertise a romantic weekend trip package to married Facebook followers. LinkedIn, on the other hand, is more business to business (B2B) focused, allowing you to target businesses based on a range of factors such as staff count, industry, and geographic location.

Market segmentation can be done in a variety of ways, depending on how you want to segment it, but the three most popular methods are demographic segmentation, geographic segmentation, and psychographic segmentation.

Target Market Segmentation

The goal of market segmentation is to bring together all of the different varieties of consumers in your vast lake who have similar values and buying habits. The first step is to determine what the various category sections or segments should be. There is no need to reinvent the wheel, marketers have long relied on the four segmentation tactics listed below

  • Behavioural Segmentation
  • Demographic Segmentation
  • Geographic Segmentation
  • Psychographic Segmentation

Demographic Segmentation

Age, gender, family size, family life cycle, income, education, religion, race, social status, and nationality are all used to identify potential clients. Because these variables are simple to identify and quantify, it is the most widely used market segment.

The reality that a person's requirements and wants change with age and stage in life is addressed through age and life-cycle segmentation. A 25-year-old single woman, for example, is more inclined to buy disposable fashion goods than a 50-year-old mother of three with other financial obligations. Men and women often have distinct perspectives toward a product, which is why gender segmentation is used. Nike, for example, discovered that for males, performance is defined by athletics, whereas for women, it is defined by how fitness fits into their complete lifestyles.

On the surface, income and social class segmentation seem to make sense because higher-income consumers can afford more expensive things like financial services, luxury goods, and vacations. However, income does not always predict a consumer's purchasing behaviour because people prioritise their money in various ways, and goals must be considered.

Geographic Segmentation

Consumers are divided into categories based on where they live. You can divide people into nations, states, regions, countries, cities, and neighbourhoods as deeply as you wish. People are influenced by where they live and work, which is why geographic segmentation exists. It is possible that these distinctions are cultural in nature. Giving gifts to visitors is, for example, customary in China. Traditions or political divisions may exist elsewhere.

Geographic segmentation is noteworthy because, while it is successful as a market differentiator, its predictive potential may be fading, particularly for organizations that conduct business abroad. In today's increasingly globalised society, it is a mistaken assumption to believe that a person's spending power or social class is determined by geography.

As a result, global marketers frequently combine geographic and demographic segmentation, a strategy known as geodemographics, to research their target customers in their homes.

Behavioural Segmentation

Consumer opinions toward a product and how they utilise it are used to create behavioural segmentation. Are they the first to buy new gadgets, or do they wait until a product has become popular before making a purchase? Do they prefer well-known brands to less expensive alternatives? Because it's difficult to pin down a customer's attitude about a product, many marketers focus on the following criteria as the starting points.


People buy particular things at different times of the day, month, or year, therefore it is interesting to see when they get the idea to buy, make the purchase, or use the item they bought. Flower bouquets are a great example, which people tend to buy around Mother's Day and Valentine's Day. Customers should be targeted as many times as possible while running advertising around these periods.


Benefit segmentation identifies what individuals seek in things they purchase. For example, one group of consumers may purchase an automobile based on its fuel efficiency and performance, while another group may purchase the same vehicle based on its fashionable interior, which they believe to be of high quality.

Usage Rate

Usage rate segmentation determines how frequently a person used a product, whether they are light, medium, or heavy users. Marketers may intend to target heavy users because they account for a large portion of overall purchases. Alternatively, they may focus on converting light users to heavy users as a means of expanding their business.

Brand Loyalty

Some customers, described as "hard-core loyalists," stick to a brand by buying the same things again and over again. Others are faithful to two or three brands and switch between them at random. Finally, a third group has little brand loyalty and is impacted by brand variables such as pricing.

Psychographic Segmentation

Because it is linked to two very private variables, personality profiles and lifestyle profiles, psychographic segmentation is the most difficult to assess. Psychographic segmentation poses questions like, "Does this customer live in the moment or is he looking ahead?" Is she more of an extrovert or a introvert? Is he politically active? What are her passions and pastimes?

This category encompasses a wide range of topics. Consumers who enjoy spectator sports, care about the environment, vote Democratic, read biographies, fix old cars, attend parties, or eat vegan cuisine for health reasons can be found simply by grouping them by hobbies. Because many of these preference aren't readily apparent, uncovering them requires hands-on market research, such as attitudinal surveys and interviews, or the use of marketing artificial intelligence also known as big data to guess people's lifestyles and personalities based on the websites they visit, Facebook posts, and other data.

This type of research is more prone to error than hard data like a person's age or ZIP code, but for small budgets, it is usually prefereable than taking a chance.

Targeting Your Market Based On Your Segmentations

Segmentation, which is the S in the STP marketing strategy, is a prominent concept that marketers use to design the types of messages that will appeal to various populations. The model's second step is T, which stands for Targeting. You must pick which and how many sectors you will market to after you have identified a number of them.

For most marketers, there are four elements to consider:

  • Size. The market segment must be sufficiently large to warrant marketing to it. You risk limiting the company's growth if the target segment is small.
  • Difference. There must be measurable variances between the portions. The product must provide different benefits to each sector. Some want to know if the vehicle is fuel-efficient and cost-effective, while others want a pleasant and luxury ride.
  • Money. The profit from focusing on a certain market group must be greater than the expense of delivering various marketing campaigns

A multi-segment strategy, in which you target distinct market segments with different products or messages, results in higher overall marketing expenses. Due to a stronger understanding of the customers' demands within the target segment, a single-segment strategy that entails going for a higher share of only one segment may be more effective. It's a high-risk strategy, however, since your business could suffer if the segment turns sour.

Positioning Your Product

Positioning or the "P" is the third step of STP customer segmentation models. The precise messages you send out and how you transmit those messages to provide your target segments a cause to buy is what positioning is all about. The rubber meets the road when it comes to positioning. You're specifically looking at the wants and needs of each sector and developing a value proposition that outlines how your product can better answer those demands than your competitors' goods.

Assume you're the owner of an adventure travel firm. You've identified your target client as unmarried, between the ages of 18 and 26, extroverted, pre-career, budget-conscious, and committed to responsible travel through segmentation. One idea is to have a best-travel-photo competition on Instagram (since your target demographic prefers this platform), with the winner receiving an all-inclusive eco-travel trip (because your audience loves getting free stuff). The tournament is expected to receive hundreds of thousands of entries, making it a cost-effective way for the company to grow its mailing list of hyper-targeted customers.

Differences Between Target Audience And Target Market

Any salesperson, marketer, or entrepreneur must understand the difference between the target audience and target market. A brand's target market is defined as the entire group of people to whom it wishes to sell its products. The target audience, on the other hand, is significantly smaller, it is a specific group of people who the corporation intends to buy the goods. To put it another way, the target market is the larger pool of possible clients. At the same time, a target audience is a certain group of shoppers.

Target AudienceTarget Market
A subset of the big group you are trying to attractA bigger group of people you are trying to sell to
Has an impact on your campaign decision specificallyHas an impact on your business and marketing decision
More focused and specialized. Your target audiences are segmented from your target marketRefers to a larger demographic segmented. Its a general description of who your customers are

An example of a target market could be 'digital marketing experts based in Malaysia." whereas your target audience may be "SEO experts based in Malaysia who follow Jeff Bullas."

Examples Of Target Market

You may be familiar with your sector, but there are no one-size-fits-all solutions. You will have to start with business traits if you are looking for a target market for your goods. Your goods will appeal to some customers more than others. The first step in conducting a target market analysis would be to determine the size of your potential customer's company. Here are some examples of target markets for successful businesses.


Apple produced a series of commercials contrasting Mac and PC. PC was the opposite of Mac, who was a cool young man. The advertising was aimed at both PC users and those wishing to purchase one. Apple was clearly targeting a youthful tech-savvy market based on the terminology used and the way the characters were depicted.


Corona is a well-known beer brand, yet it is mass-produced and lacks the flavour of craft beer. As a result, it may be sold to a vast number of beer drinkers. Their messaging appears to be aimed at a younger demographic who enjoys social drinking with friends.



Younger children are one of their main target markets. They provide play areas, happy meals with toys and marketing efforts with Disney characters and Ronald McDonald for this sector. Mcdonald's has consistently maintained the greatest fast food market share in the United States because of targeted marketing and aggressive pricing. However, this kept changing.

Mcdonald's sales had been declining in previous years, and the company has had to adapt to changes in its target demographic, which has shifted to millennials. This avocado-obsessed generation is more concerned with healthy foods than the earlier generation. McDonald's changed their products and services to offer healthier, fresher menu selections as well as more upscale coffee items in response to this shift in their target market.


You can start making the decisions that will bring your concept to life and get people in the door now that you know who you are going for and what industry you want to break into. Of course, once you have begun making judgements, you will need to do further research.

For example, once you have decided on a site, you will need to familiarise yourself with the local market. Remember to lay a solid foundation for your business from the start, increasing your chance of success.


What Is A Target Market

Target Market

Differences Between Target Market And Target Audience

Target Market Segmentation

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