If you’re a business owner, can you tell me who makes up your target markets? If not, this post is for you. It’s also for anyone else hoping to learn more about target markets in business and branding.
A target market is the group of individuals most likely to support a brand, or purchase a product or service. They’re the foundation of a business’s marketing plan and branding efforts.
In this post, I’ll provide a comprehensive overview of target markets. Continue reading to learn:
- What a target market is
- The difference between target market and target audience
- Why target markets are important to brands
- What target market segmentation is
- How to establish a target market, and
- Examples of target markets
What Is A Target Market?
A target market is a group of consumers – who share similar characteristics and traits – that a business targets as the ideal customer base for their product, service, and/or overall brand.
The characteristics and/or traits these consumers share align with those most likely to connect with a specific product, service, or message. Some of these qualities include age, income, and lifestyle – to name only a few.
A brand’s target market should be specific – targeting the niche, most relevant group of consumers. That doesn’t mean you can’t market or sell your products to anyone else. Your target market sets the foundation for your marketing, advertising, and promotional efforts.
Target Market vs. Target Audience
The terms target market and target audience are often used interchangeably, though there’s a subtle difference between them.
- Target markets are larger, more broad groups of consumers that you elect as “target consumers” for your product, service, or brand. In simpler terms, your target market is the groups you believe your product, service, and/or brand is intended for.
- Target audiences are groups of consumers identified by certain characteristics and/or qualities to define the best audience for specific marketing and advertising campaigns. These audiences essentially consist of specific, hypothetical “buyer personas” that you tailor the advertisement to.
It’s easy to confuse the two. Try to remember: a target market is product/service/brand-focused while a target audience is marketing/advertising/promotion-focused.
Why Are Target Markets Important?
Target markets are more than important – they’re essential to identifying and defining your customer base.
Here are a few ways your brand benefits from understanding its target markets:
- Reach the right people: Your offering has an intended use and purpose. Finding markets where that use and purpose is most beneficial gives you a better chance of finding qualified leads.
- Save resources: By creating a brand experience tailored to your target markets, you avoid wasting valuable time, money, and other resources on irrelevant efforts.
- Set appropriate prices: Knowing your target market’s spending habits and competitor pricing, you can set appropriate prices for your offering.
- Improve sales and profits while accomplishing business goals: Identifying the most appropriate markets for your offerings places you in front of the right consumers. This inherently leads to better sales and profits, pushing your business further.
- Build a trustworthy, relatable brand: Your target markets share qualities and characteristics with your brand. That creates authentic, genuine emotional connections with relevant consumers. Rather effortlessly, appropriately identifying your target market builds a relatable brand that customers trust.
Target Market Segmentation
Target market segmentation is the process of identifying groups of individuals that make up your target markets. Segmenting a wide pool of consumers into smaller, more relevant groups.
When identifying target markets for your product, service, or brand – consumers are generally split using one of four segments:
- Demographic
- Psychographic
- Behavioral
- Geographic
In the sections below, I’ll expand upon each target market segment in greater detail.
Demographic
Target demographics are the main characteristics that define your market. They consist of definitive, factual statistical information that helps separate the general consumer base into specific, related groups.
Target demographics can include (but are not limited to):
- Age
- Income level
- Gender
- Occupation
- Education
- Family situation
- Nationality
- Ethnicity
- Race
Psychographic
Target psychographics are similarities in psychological characteristics and variables.
Target psychographics can include:
- Beliefs
- Thoughts
- Opinions
- Values
- Interests
- Lifestyles
Behavioral
Grouping based on behaviors and patterns of your brand’s current customer base is behavioral segmentation. It’s identifying a group of existing customers and analyzing their behavioral tendencies.
Many new products or branding strategies are created around the past performance of a product or campaign.
Geographic
Separating groups based on regional preferences is called geographic segmentation. Geographic segmentation has grown increasingly relevant with the increase in globalization. It’s essentially identifying different markets based on regions and cultural differences.
Target Market Strategy: How To Define Your Target Customer
All the information thus far provides context around the theory of target markets. But how do you put it into practice for your business brand?
The following steps give you an outline of how to define your target market:
- Assess current offerings and customer base
- Conduct market research
- Research competitors
- Establish your target markets and ideal customers
- Align your offerings with your target market’s needs
I’ll provide a detailed overview of each step in the following subsections.
1. Assess your current offerings and customer base
To identify target markets, you have to understand what you’re offering and how your current customer base responds to it.
You can find information on your customer base using CRM data, Google Analytics, site search information, and more. From there, identify existing segments such as:
- Age
- Location
- Language
- Spending habits
- Popular products/interests
- Pain points
- Other characteristics
If you’re establishing target markets for the first time as a new business, you won’t have as much data and should focus more on assessing your offerings. To understand your offerings, ask yourself:
- What problems do your products/services/brands solve?
- Who does your product/service/brand appeal to most?
2. Conduct market research
After looking inward, your next step is to conduct market research and gain a better understanding of the total market. Depending on your resources, market research can be brief and general or more time-consuming and detailed.
If you have minimal resources, free market research tools such as Quora, Reddit, Google Trends, Alexa, and more give you a look inside the minds, search interests, and habits of the general public.
With more time and resources, you can:
- Conduct surveys to current customers or non-biased parties
- Offer focus groups and interviews with current customers or non-biased parties
3. Research competitors
With a better understanding of the overall market, it’s time to look at those closest to you – your competitors.
Whether you’re new to the market or have a long history, analyze the markets that your competitors are targeting to:
- Find areas and intersections where you’re targeting the same people
- Identify gaps in your competitors’ strategies where they’re missing out
- Idenitfy areas where you can target groups that competitors can’t
- Analyze how competitors are positioning themselves
- Identify markets competitors target that you don’t (where you’re missing out)
4. Establishing your target markets and ideal customers
Based on your research and segmentation mentioned above, you should establish your target market segments.
Remember those four segments we talked about earlier? Here’s how to use them in practice:
- Demographics and geographics determine who you’re marketing to
- Psychographics and behavioral segmentation determine how and why you target them.
Together, the four segments help identify target markets. For each of your target markets:
- Create a statement that clearly defines the market
- Develop a “buyer persona” of hypothetical customers in that market.
5. Align your offerings with your target market’s needs
With target markets identified, align your offerings with consumer needs. Part of identifying target markets is understanding the pain points, preferences, needs, and desires of each.
To put theory into practice, identify specifically how your brand/products/services align with each target market’s needs and desires. If you’re a new brand with one offering, this process is quick and painless. Larger, established businesses with various brands or product/service lines will take more time to identify relevant markets for each offering.
Target Market Examples
Now that you understand the theory of target markets and how to find yours, I’ll provide a few examples.
- McDonald’s target markets are wide and varied. From targeting families with children to younger working professionals and more.
- Pharmaceutical products have very specific target markets – a group of individuals that have a certain condition they want to be cured and/or symptoms relieved.
- Senior living facilities have two specific target markets. One market is senior adults and over who are actively searching for a facility, voluntarily giving up a level of independence. The other is middle-aged and older adults looking to place their parent or guardian in a facility – with the prospective resident not always voluntarily relinquishing independence.
Find Your Target Market With Casey Templeton
Whether you’re an established corporate entity, a new small business, or a budding entrepreneur with a nugget of an idea, I hope this article helps you better understand target markets. To match the right consumers with your offering, you have to group them through segmentation. Following the steps I’ve provided, you’ll be able to identify your target markets.
Professional brand photography plays a major role in connecting with your target market. Visual branding is essential for modern business and high-quality, authentic brand imagery is key to establishing yours.
Casey Templeton Photography offers professional business photography services in the Nashville, Tennessee area and beyond. Casey has years of technical practice behind the lens and branding experience. Having worked with numerous Fortune 500 businesses and creative agencies, Casey brings a wealth of business branding knowledge to the table.
To learn more about CTP’s role in establishing your target market or get the ball rolling on a project, fill out our contact form and we’ll get back to you.