Selecting Target Markets and Target Market Strategies

Target Markets Overview

• Definition: A target market refers to a specific segment of potential or current customers that a company aims its marketing and advertising efforts toward.

• Importance: Understanding the target market’s needs and preferences enables businesses to design effective marketing strategies.

• Research: Effective targeting requires extensive research rather than assumptions about audience behavior, helping position businesses for success.

Defining the Target Market

• Group Characteristics: Target markets are defined by shared traits like age, income, and lifestyle which makes them potential customers.

• Marketing Strategy Connection: Identifying the target market simplifies marketing decisions related to product promotion and distribution.

Steps to Identify the Target Market

1. Conduct Market Research: Identify customer needs, preferences, and buying practices.

2. Perform Competitive Analysis: Understand market competition and pricing structures.

3. Market Segmentation: Divide potential consumers into defined categories to tailor marketing efforts.

Types of Market Segmentation

1. Demographic Segmentation

• Focus: Centers on customer characteristics.

• B2B Characteristics: Includes industry type, company size, job title.

• B2C Characteristics: Demographics include age, gender, income, education, and family status.

2. Geographic Segmentation

• Focus: Divides the audience based on their geographical location affecting purchasing decisions.

• Key Indicators: Region, country, city, or geographical area.

3. Psychographic Segmentation

• Focus: Segments based on individual personalities and values.

• Application: Tailor marketing to align with personalities that value quality and energy efficiency.

4. Behavioral Segmentation

• Focus: Categorizes the audience based on past interactions with the brand.

• Primary Characteristics: Include product knowledge, purchasing behavior, and awareness of the business.

Examples of Target Markets

• Outdoor Enthusiasts: Target market for a hiking supply shop.

  • Characteristics: Ages 18-40, enjoy outdoor activities, and value high-quality gear.

  • Strategies:

    • Provide expert advice and host events.

    • Build community meetups and loyalty programs.

• On-the-Go Travellers: Target market for a sandwich shop.

  • Characteristics: Adults seeking quick meals, with low to moderate incomes.

  • Strategies:

    • Emphasize quick service through marketing and training.

    • Offer convenience like drive-thru and special promotions.

Importance of Identifying Target Markets

• Resource Allocation: Focus marketing efforts and resources effectively.

• Product Development: Tailor products and services to meet target market needs.

• Pricing Strategy: Set appropriate prices based on target customer identification.

• Promotional Focus: Optimize promotional activities for targeted groups.

• Insights Gathering: Targeting specific markets provides valuable customer insights, shaping future expansions and offerings.

Impact on Business Strategy

• Sales Prospects: Target market identification is pivotal for enhancing sales strategies and resource utilization.

• Product Development: Understanding target markets informs product adjustments to meet consumer preferences.

• Market Expansion: Successful targeting can lead to market expansion, both domestically and internationally, opening new revenue streams.