A target market is any market that comprises buyers (individuals or groups) that would most probably buy a seller’s products or services. Though the market may comprise sellers already catering to the buyers, it still has room for new sellers to enter, especially those that can offer better and more unique offerings. Almost all companies make products or offer services that appeal or cater more to a particular buyer group. Generally, a target market comprising buyers who “need” a specific product or service is likely to provide more business to a company compared to a buyer group that “wants” the goods.
Difference Between Target Market and Niche Market
A target market and niche market are not the same, though the terms are often used interchangeably. Target market basically denotes the people. Niche market refers to the specialized service being offered. Two different niches therefore could have the same target market. For instance, a target market may comprise buyers who are equally interested in two niche offerings such as organic toiletries and foldable baby walkers.
Identifying a Target Market
Locating target market is all about identifying what a particular product or service offers differently and then looking for buyers who would find the offering most beneficial. For instance, if a company manufactures durable (tough and waterproof) DSLR cameras, then its target market should comprise outdoor enthusiasts who have a penchant for filming their escapades and adventures.
Companies, especially smaller firms, should usually not pander to the market their competitors are focusing on. Large companies may overlook a certain niche, which smaller firms can capitalize on. However, it’s not recommended to narrow down the target market too much as that could result in a buyer group too small. Generally, a target market should be big enough for a company to make a profit.
As far as collecting information to learn more about a target market is concerned, primary research, secondary research, magazine articles, blogs, forums, surveys, feedback from current customers, etc. should come in helpful. Target markets are dynamic so it’s important to do market research at regular intervals and re-establish the target.
Target marketing is purely focusing on people who are likely or interested to buy a specific offering. This entails breaking the market into segments and creating a marketing message that highlights a product or service’s qualities that matter most to the segment. And since target marketing is not focusing on people belonging to a specific demography, income group, etc., the segmentation could be based on demographics (gender, age, marital status, income level, education, religion, etc.); geography (country, state/province, city, etc.); or psychographic (social status, lifestyle preferences, and personality).
And, if the target consumer group searches online for products, reads the newspaper, or attends specific events, then reaching out to them through television adverts would be futile. Similarly, if a restaurant receives family crowds for dinner and a more business-oriented customers for brunch or lunch, it should design and develop its menu accordingly. If a consumer comes across a product advert and feels convinced or inclined toward buying the product, it denotes the seller has served the ad well.
Also, it’s important the seller doesn’t assume the target market’s knowledge about specific products or services. For instance, if a company is adding a unique twist to an existing product, it should clearly communicate to the buyer group what that twist is and how it would benefit its users. Failing to do so could result in the product or service going unnoticed.
Benefits of Target Marketing
Thanks to target marketing, companies learn if there truly is a market demand or need for its offerings. The marketing costs go down and the return on investment increases as the marketing activities are a lot more focused. Companies focusing on a particular market are likely to gain a more loyal fan base. For instance, a company that makes smartphones for all price points is unlikely to have a following for its high-end smartphones as strong as a company that makes only high-end phones. Being focused on a specific market also lends to optimal resource utilization and efficiency.