What is a Target Market?
- A significant portion of the success while selling a good or service depends on knowing whom it will appeal to and who will ultimately buy it. This is where the target market concept will play an important role.
- A target market may be defined as a group of people with shared characteristics that a firm or company has identified as potential customers for the products it wishes to sell.
When the company identifies the target market then the decision-making process revolving around the designs, packages, and marketing of its product becomes easier.
How does the target market influence the product?
The target market determines significant factors about the product itself.
- To illustrate, a company may tweak certain aspects of a product to appeal more to consumers in its target group, like adding less salt to the savoury item as consumers in that area prefer eating it that way.
What are the four types of target market?
There are four types of markets or market segmentation namely, demographic, geographic, psychographic, and behavioural segmentations. - The demographic market segmentation, a common form of segmentation, is focused on who the customer is. This segmentation is based on the belief that all the customers with a demographic trait will have similar inclinations and purchasing behaviour. - The geographic market segmentation is based on the location of the consumers and is a useful distinction to make when the location of the customers plays a part in their overall purchase decision. - The psychographic market segmentation separates the audience based on their personalities and traits, which would factor in lifestyle, attitudes, interests, and values. But this segmentation can only be realised after extensive research is done. - The behavioural market segmentation divides the consumers based on their previous tastes, preferences and brand choices. This would include an understanding of the product knowledge, purchase patterns, previous purchases, awareness of your business, and product rating.
Steps to identify target market
- Understand the customer problems and identify means to solve them.
- Ask yourself which specific customers will benefit from your product.
- Identify niche market segments where your product will fit best.
- Identify the company expertise that you can offer.
- Identify who the competitors are.
