What is a target market? The following information provides the background and links to actionable resources for this important topic so you may understand the most common elements businesses explore when they define their target markets.
Target Market Definition: What Are Target Markets?
What is a Target Market?
A target market is the ideal group of prospective customers for a specific product or service who share common characteristics that influence their buying behaviors.
A business will promote its product or service to the target market from which the organization may generate the greatest profitable action, thus achieving the goal of marketing.
While B2C businesses may focus most on audience-specific characteristics to define their target markets, B2B businesses typically consider industries, niches, and verticals as the primary characteristics to describe their target market. After this, it is common for B2B organizations to further define their target audiences.
For example, the construction industry has many niche markets such as maintenance, repair, and operations (MRO); heating, ventilation, and air conditioning (HVAC); and plumbing. Within these niche markets, the target audiences specifically may differ in their product needs, suggesting that marketers would customize their messages accordingly.
Some shared characteristics that define a target market may include:
Target Market Defined Characteristics
- Lifestyle/social status
- Buying triggers/researching patterns/purchasing behaviors
- Media consumption
The essential characteristics that define a target market differ depending on the product, and the product characteristics you promote will vary based on the target market.
For example, a sports bra may depend upon gender as a defining target market characteristic, whereas a candy bar may rely most on ease of buying location.
A diamond ring may depend heavily upon the target market’s social status characteristics, whereas a content calendar software may rely most on the target market’s professional pain point characteristics.
In these examples, you can envision how the marketing strategy toward a specific target market will differ.
Therefore, it is a best practice to research all of the shared characteristics of the group of people you wish to target your product toward yet include only the most relevant characteristics in the target market framework you will use to direct marketing decisions.
What Is The Purpose Of A Target Market?
Target markets provide marketers an effective way to focus their activities on driving awareness, interest, desire, and action from the niche of prospective buyers most likely to find long-term value in the business’ solutions.
Understanding your target market will help you make informed business decisions to fulfill the primary purpose of marketing: Influence profitable customer action.
Target market research informs the product marketing mix to reach prospective buyers as effectively as possible:
Target Market Research
- Product: What problems does your product solve for the target market?
- Price: What pricing strategies will influence the most profitable customer action from the target market?
- Place: Where will the target market research and purchase your product?
- Promotion: What marketing tactics, marketing channels, and content types will reach your target market most effectively?
- Packaging: What sensual experiences (appearance, texture, scent, auditory, and taste) will attract your target market?
- Positioning: How will your target market understand the unique differentiators and value only your product provides?
- People: What are the shared traits (buying triggers, research behaviors, and related purchasing patterns) of the target market as personified in a target audience persona profile?
Knowing your target market informs strategic business decisions to use your resources as effectively as possible.
Understanding Target Markets: What Is An Example Of A Target Market?
For example, let’s explore coffee consumers as a target market for Starbucks’ and Folgers’ coffee products. Is the target market the same for these two products?
Starbucks Coffee Target Market Example
For the sake of this Starbucks example, we’ll put the information from this piece to use.
Starbucks Target Market Example
- Industry/niche/vertical: This target market characteristic is very relevant for B2B businesses but less so for B2C (for this example, we will focus on a primary target market of B2C)
- Age/maturity: 22 to 60 tech-savvy and educated
- Gender/sex: Not super applicable—Starbucks has been actively building a culture where everyone is welcome
- Location/geographics: Busy urban and suburban on-the-go individuals who stop in Starbucks-owned stores
- Income: ~$90,000 with the ability to throw down $10 per visit
- Lifestyle/social status: White-collar professionals
- Hobbies/interests: Tech and socially conscious
- Career/profession/role: White-collar (may be important for remote working applications in stores)
- Buying triggers/researching patterns/purchasing behaviors: Treat yourself while commuting on-the-go
- Media consumption: Smartphone usage may indicate apps, social media, and other digital media may be effective
Folgers Coffee Target Market Example
For this Folgers example, we’ll use this piece to pick apart the primary target market characteristics:
Folgers Target Market Example
- Industry/niche/vertical: Again, this target market characteristic holds more weight for B2B organizations (and for this example, we are focusing on a primary B2C target market)
- Age/maturity: While baby boomers have been a huge target audience, Folgers has been actively shifting its target market focus to millennials
- Gender/sex: Not super applicable for this product category
- Location/geographics: In grocery stores with K-cups and in offices at colleges and healthcare facilities
- Income: Folgers makes affordable coffee products for thrifty consumers who still desire quality balanced with frugality
- Lifestyle/social status: Trendy, sentimental, trailblazing spirits who want to forge their own way
- Hobbies/interests: On-the-go
- Career/profession/role: Not as relevant for Folgers other than knowing that busy millennials are looking for easy-to-consume, ready-to-drink products as they are busy people (part of their marketing is getting back to the roots of selling coffee to gold miners, so there is a tinge of being the coffee for blue-collar workers who are building their own careers with their own two hands)
- Buying triggers/researching patterns/purchasing behaviors: Grocery shopping (running out of coffee at home means adding it to the list) though Folgers is also researching more ready-to-drink options like cold brews millennials can grab and drink immediately
- Media consumption: TV, online video, digital display, streaming audio, and influencer social media, according to a press release
A single company may have multiple target markets. For example, while we focused on Starbucks’ primary target market for its own stores, Starbucks does offer consumer-packaged goods in grocery stores that may compete with Folger’s.
1. Mass Market
A company targets mass market when they sell vast quantities of a product to a large number of consumers. These products are often not customized but rather more of a “one-size-fits-all” approach. Mass market products aim to sell to the majority of consumers within a target market—perhaps 50-100% of the total market cap, for example.
Example mass market products may include soda pop, laundry detergents, etc.
2. Broad Markets
Also known as differentiated markets, broad market strategies target more defined members within a target market who share common attributes. Broad market products aim to sell to many consumers in a target market, but with a specific sub-segment of the market in mind—perhaps 25-50% of the total market cap, for example.
Example broad market products may include over-the-counter medicines that solve specific ailments such as headaches, some clothing products, children’s toys, etc.
3. Niche Markets
Niche marketing focuses on a very specific segment or sub-segment of the market. Niche products solve problems and provide value to a narrowly defined audience.
An example of a niche market may be trail runners who fall within a broad market of runners who fall within a mass market of athletes. A sub-segment of the trail runner niche market could even be winter trail runners, thus furthering the niche.
The four target markets are geographic, demographic, psychographic, and behavioral. The fifth target market some scholars consider is firmographic.
1. How To Use Geographic Market Segmentation To Define Your Target Market
Geographic segmentation helps organizations generate profitable customer action based on where prospective customers live, work, operate, and travel.
Target market characteristics to consider in geographic segmentation may include:
Important Geographic Segmentation Target Market Characteristics
- Climate zone/seasonality/weather/temperature
- Cultural norms
2. How To Use Demographic Market Segmentation To Define Your Target Market
Demographic segmentation explores traits individuals share that presumably influence their purchasing decisions.
Important Demographic Segmentation Target Market Characteristics
- Relationship status
3. How To Use Psychographic Market Segmentation To Define Your Target Market
Psychographic segmentation builds upon demographics to include lifestyle characteristics that may influence purchase decisions.
Target market characteristics to consider in psychographic segmentation may include:
Important Psychographic Segmentation Target Market Characteristics
- Social status
- Media consumption patterns
4. How To Use Behavioral Market Segmentation To Define Your Target Market
Behavioral segmentation explores the pain points, needs, and wants that trigger buying activities.
Target market characteristics to consider in behavioral segmentation may include:
Important Behavioral Segmentation Target Market Characteristics
- Purchase reason(s)/pain point(s)
- Budget, need, authority, time (BANT)
- Buying process
- Decision makers
- Buyer journey stage(s)
- Engagement level(s)
5. How To Use Firmographic Market Segmentation To Define Your Target Market
Firmographic segmentation helps organizations generate profitable customer action based on the types of businesses to which the organization markets and sells. Firmographics are a B2B resource to aid in defining a target market.
Target market characteristics to consider in firmographic segmentation may include:
Important Firmographic Segmentation Target Market Characteristics
- Company size/employee count
- Maturity/years in business
- Legal status
If you have an existing audience and would like deeper information about your target market to optimize your product and positioning further, surveying your audience may be an effective way to learn more.
Tools like SurveyMonkey make it easy to write questions that you could promote via emails, social media, your website, retargeting ads, or more.
If you know of ideal target audience members, you may incentivize them to be interviewed. If there is a group of ideal prospective buyers, you could alternatively host a focus group.
The North American Industry Classification System (NAICS) provides deep-level detail on exactly what you’d expect. You may dig into the research from this resource to specifically build out the firmographic information for your target market segmentation.