A target market is a group of people that have been identified as the most likely potential customers for a product because of their shared characteristics, such as age, income, and lifestyle.
Identifying the target market is a key part of the decision-making process when a company designs, packages, and advertises its product.
Target Market Segmentation
Demographic Segmentation
Demographic segmentation classifies consumers based on specific attributes, such as age or income level. Demographic segmentation offers a glimpse of consumers as actual people in the real world using common data collection methods. Typically, this segmentation is best used for business-to-customer (B2C) marketing efforts.
Typical attributes to consider during demographic segmentation include:
- Age
- Gender identity
- Ethnicity
- Sexual orientation
- Income level
- Household size
- Education level
- Geographical location
Psychographic Segmentation
Psychographic segmentation classifies consumers based on their psychological and personal traits, such as values and attitudes. Unlike demographic segmentation, which describes who consumers are, psychographic segmentation offers a glimpse into the motives behind why they buy something. Typically, this segmentation is as helpful for B2C and business-to-business (B2B) marketing efforts.
Common psychological characteristics and traits to consider during demographic segmentation include:
- Personal values
- Religious beliefs
- Opinions
- Attitudes
- Aspirations
- Political leanings
- Lifestyle
Firmographic Segmentation
Firmographic segmentation classifies companies and businesses into a set of shared attributes, such as their industry and number of employees. In effect, firmographics is similar to demographics, except that it focuses on the characteristics of businesses rather than people. As a result, it is used exclusively for B2B marketing.
Common attributes to consider for firmographic segmentation include:
- Industry
- Location
- Size
- Status or Structure
- Performance
Behavioural Segmentation
Behavioural segmentation classifies consumers based on their behaviours surrounding products or services, such as when they decide to purchase them and how they use them. By focusing on consumer behaviour, behavioural segmentation provides a look into how consumers interact with businesses, which allows marketers to improve the effectiveness of their efforts. Typically, this segmentation is as useful for B2C as B2B marketing efforts.
Common areas of consideration for behavioural segmentation include:
- Usage frequency
- Occasion
- Brand loyalty
- Benefits needed
Target Market Strategies
A range of strategies allows you to market your product or service to your target market. Typically, these strategies are broken down from the broadest target market to the most narrow and specific. The exact method you use will largely depend on the target market you have identified.
Mass Marketing
Mass marketing is particularly attractive to companies selling products or services with broad appeal. For example, gas companies, telecommunications companies, and manufacturers of salt and sugar typically only conduct mass marketing campaigns because nearly the entire market uses their products.
Differentiated Marketing
Differentiated marketing is a marketing strategy in which a business creates different marketing campaigns to appeal to different target audiences. By differentiating their marketing campaigns, businesses can more effectively articulate their value proposition to various market segments and, ideally, increase the success of their marketing strategy.
Niche Marketing
Niche marketing is a marketing strategy in which a business focuses all its marketing efforts on a highly specific and unique target market. As a result, niche marketing often targets gaps in the marketplace, where the needs of specific customers are not currently being met.
Micro-marketing
Micromarketing is a marketing strategy that specifically targets a narrow segment of a niche market. Typically, the target audience of a micro-marketing campaign is defined by specific characteristics such as age, job title, geographic location, or gender.
