What is a Target Market?
A target market is a group of consumers or organizations most likely to buy a business’s products or services. Because those buyers are likely to want or need a company’s offerings, it makes the most sense for the company to concentrate its marketing efforts on reaching them. Marketing to these buyers is the most powerful and efficient approach. The alternative – marketing to everyone – is ineffective and costly.
Finding Your Target Market
To discover who your best target market consists of, start by answering three fundamental questions:
- What problem does your product or service solve?
- Who is most likely to have this problem? In what situations do they use it? Is it individuals? Businesses? Families?
- Are there different groups with different needs? You may have more than one target market, or market segment, based on how they use a product or service.
Get a little more precise about what pain points your product or service addresses and then who typically feels that pain.
Defining Your Target Market
Once you are clear about who is most suitable to need or want your product or service, it’s time to get even more specific about this group, or groups, of people. There are several different ways to define your market based on various characteristics. You should decide which approach comes closest to describe your perfect customer accurately:
- Consumer or business – Define are you B2B (business-to-business) or a B2C (business-to-consumer) contribution.
- Geographic – Set your location when it comes to selling products.
- Demographic – Write down your best customer demographically means that you define your target market in terms of their gender, age, income level, etc.
- Psychographic – Sometimes, customers don’t fit into a particular group based on visible components, but more based on internal beliefs and values. These are psychographic characteristics.
- Generation – Many companies today define their target market based on which generation they were born in, such as baby boomers or Gen C.
- Cohort – Other companies find that their target market is better defined by looking at cohorts, or groups of people who had similar experiences during childhood, such as being raised by a single dad or attending private school.
- Life stage – Other target markets can be defined by life stage such as post-college, retirement, newly married, newly divorced, or parenting young children, for example.
- Behavioral – Another approach is based on the frequency of use, or behavior, which could be the right choice for vacation rentals, nail salons, car washes, for example.
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