Target Market: Definition, Examples, Market Segments 

There may not be a recipe for success, but there’s surely one for failure — trying to sell to everyone. When you do that, you might sell to no one at all.

Not everyone needs your product or service. Therefore promoting your product or service to anyone who’s NOT your target market would be an utter waste of time, effort, money, and resources.

In this article, let’s discuss the concept of a target market and how to market your business to the right audience. 

What is a Target Market?

Your target market includes a specific group of individuals or organizations that aligns with your brand offerings and has the maximum chance of becoming a paid customer or client. In other words, these are your ideal customers.

As a business owner, your goal should be to maximize your reach among your target audience or market. This helps optimize your marketing efforts, improves effectiveness, and increases your chances of getting maximum conversions through concentrated efforts. 

• A segment of your entire market that’s most likely to convert owing to your market audience; 
• Identified based on shared characteristics, needs, wants, behaviors, pain points, or demographics; 
• Enables businesses to gain insights into customers’ motivations, pain points, and desires;
• Helps streamline and optimize marketing messaging, offers, unique value propositions, and more. 

Benefits of Defining a Target Market

You’re more likely to hit the bull’s eye when you know exactly where to shoot. It’s better than shooting in the dark. The same theory applies to defining a target market for your business. 

Here are some evident benefits of using a targeted approach: 

• Better Understanding. Understanding the target market helps businesses gain insights into customers’ motivations, pain points, and desires, enabling the creation of more personalized and effective marketing strategies. 
• Increased Relevance. Target market helps align all the efforts, messaging, and marketing on addressing a particular group’s specific needs and preferences, increasing marketing relevance. 
• Personalized Marketing. A target market guides businesses in developing marketing strategies customized to resonate with the intended audience, including product development, pricing, distribution channels, and promotional activities. 
• Efficient Resource Allocation. By directing marketing resources toward a specific target market, businesses can avoid wasting time, money, and effort on individuals or groups unlikely to be interested in their offerings, ensuring optimal resource allocation.
• Competitive Advantage. Focusing on a target market allows businesses to differentiate themselves from competitors by offering unique value propositions that cater to the specific needs of their chosen customer segment.
• Higher Conversion. Tailoring marketing messages increases the likelihood of converting prospects into customers as businesses address their target audience’s needs and pain points.

Also read: STP Marketing: Segmentation, Targeting, Positioning

Target Market Segmentation

Segmentation helps you define your target market and use the groups for personalizing your marketing campaigns. Simply put, it’s the process of grouping prospects based on common characteristics.

Your target market can be segmented into smaller market segments based on the following factors: 

1. Demographic — Who Are They? 

Demographics is a crucial factor in defining and grouping your target market. Demographics include statistical characteristics of a person, including age, gender, income, education, occupation, marital status, and geographic location. These attributes provide valuable insights into who the customer is. 

For B2C businesses, the demographic traits could include age, gender, income level, family status, and education. While for a B2B setup, the company turnover, number of employees, role, or designation might matter more.

Here are some examples of demographic attributes:

• Age
• Gender
• Income
• Education
• Occupation
• Marital status
• Ethnicity, etc. 

2. Geographic — Where Are They? 

Geographic attributes refer to the location or the specific geographical areas in which the target market resides. 

It involves splitting your target market into segments based on their location. This can be highly relevant to businesses when the customer’s location is crucial in purchasing decisions. 

For example, suppose you know that nearly all the demand for your product or service is based in the United States and Australia for some reason. In that case, you don’t need to waste advertising dollars on people living in Europe. 

Some examples of geographic attributes include: 

• Country 
• Region 
• City 
• Neighborhood 
• Urban or Rural Audience 
• International Audience

3. Psychographic — Why They Buy? 

Psychographic segmentation focuses on understanding the psychology and motivations behind the actions of your target audience. It involves analyzing beliefs, values, interests, lifestyles, attitudes, and motivations. 

When you understand what emotions motivate your target customers to buy what they do, you can design marketing messages that speak directly to them. 

This segmentation includes traits such as: 

• Beliefs and Values
• Interests and Hobbies
• Lifestyles
• Attitudes and Opinions
• Motivations and Aspirations
• Personality Traits:

4. Behavioral — How They Buy? 

Behavioral segmentation focuses on analyzing the target audience’s actual behaviors, actions, and usage patterns. It involves examining how individuals interact with products, brands, or services, their purchasing habits, and marketing your products accordingly. 

For example, providing a great offer to those prospects who abandoned their cart midway or running a win-back campaign to rekindle interest among inactive customers is a great tactic. 

Here are some behavioral factors which can be used to segment your target market: 

• Purchasing Frequency
• Purchase Occasion
• Email Engagement Rate
• Website Activity 
• Social Media Interactions 
• Content Downloads 
• Add to Wishlist

Target Market Types

Define or pick a target market based on your business goals, conversion expectations, and, most importantly, market research data. Having a strategic approach to picking the right target market helps improve marketing effectiveness.

Here are the different types of target markets to focus on: 

• Mass Market. Mass market refers to a large, diverse group of consumers with varied demographics, interests, and needs. It encompasses a wide range of individuals or organizations without specific segmentation. For example, a soft drink company targets consumers of all ages, genders, and income levels with a product available in supermarkets and convenience stores.
• Broad Market. A broad market focuses on a relatively large segment of the overall market but is more narrowly defined than the mass market. It considers specific characteristics or needs while still encompassing a significant portion of the population. For example, a clothing brand targets fashion-conscious young adults aged 18-30 who seek trendy, affordable apparel.
• Niche Market. A niche market targets a small, specialized market segment with distinct characteristics, needs, or preferences. It focuses on catering to a specific subset of customers. For example, a company specializing in organic, vegan skincare products targets environmentally conscious consumers who prioritize natural ingredients and sustainability.
• Micromarketing. Micromarketing involves targeting an extremely narrow and specific segment of the market, often based on hyper-local factors, individual preferences, or personalized marketing efforts. For example, a local bakery offers customized cakes for special occasions, tailoring designs and flavors to individual customers’ preferences within a specific neighborhood.
• Specific Target Market. A specific target market is a segment precisely defined based on specific characteristics, behaviors, or demographics. It focuses on a specific subset of consumers that share common traits. For example, a financial advisory firm targeting high-net-worth individuals aged 50 and above offers retirement planning and investment management services.

Defining a Target Market

There are several ways to learn more about your target audience. Ideally, when defining a target audience, you should rely on multiple channels, mediums, and approaches. 

Here are some of the ways to define a target audience: 

• Surveys. Surveys involve creating questionnaires or online forms to gather information directly from customers. Surveys can be designed to collect data on demographics, preferences, buying behaviors, satisfaction levels, and other relevant insights. They provide quantitative data that helps in understanding customer characteristics and preferences.
• Interviews. Conducting one-on-one interviews involves having direct conversations with customers to gather qualitative information. This method allows for a deeper exploration of customer needs, motivations, pain points, and decision-making processes. Interviews with focus groups or real customers provide valuable insights into customer attitudes, opinions, and behaviors, helping businesses better understand their target audience.
• NAICS (North American Industry Classification System). NAICS is a system used to categorize businesses based on industry classification codes. By identifying the specific NAICS code(s) that align with your business offerings, you can access industry reports, market data, and trends that provide insights into your target market’s characteristics, size, and potential.
• Market Research Providers. Market research companies or organizations specializing in market research and data analysis. They collect, analyze, and interpret data relevant to understanding customer demographics, behaviors, preferences, and market trends. Researchers can conduct primary research using surveys and interviews or provide access to secondary target market research reports and data.

Examples of Target Market

You must’ve got a pretty good idea about target markets by now. Let’s examine how big brands and businesses define and use their target markets in marketing and product positioning.

Nike Target Market

Nike sells equipment, apparel, shoes, and accessories to athletes and sports enthusiasts. Their products are of high quality and last longer, so their prices are high enough that only those with disposable income can afford them.

They specifically target young aspiring runners and athletes, two groups of people who need to be motivated to continue pushing themselves beyond their normal limits.

Nike targets these groups by creating motivational ads, campaigns, and posts that appeal to their target market’s motivation to pursue a win. Here’s an example of their Instagram feed full of action-oriented content: 

Apple Target Market

Apple is the textbook example of product design and innovation. The tech company has something for everyone with its diverse product offerings. Here are two segments of their target markets:

• Technology Enthusiasts. This is a customer category that launched Apple’s brand decades ago. Apple is still creating value for this segment with new category launches such as Apple TVs, Apple Watch, and HomePods. 
• Healthcare Professionals. Apple has positioned healthcare workers to communicate with patients more conveniently by focusing on the appeal of having information at your fingertips with the iPhone and the iPad.

Apple doesn’t exclude many people from its target market and has positioned itself to benefit businesses and consumers — even with the same products as the iPad. Its success has been based on understanding the value of its various segments instead of excluding people from them.

McDonald’s Target Market

McDonald’s target market has a wide range of customer personas. However, younger professionals are a prominent target market segment for the chain. For example, several McDonald’s locations have been redesigned to look sleeker, more modern, and more appealing to millennials.

Another important segment for the chain is ‘full nest’ families with children over six years old. The franchise’s efforts to appeal to this segment are most visible in its Happy Meal options. McDonald’s also consciously tries to appeal to working and middle-class customers.

In summary, the company’s target market isn’t clear-cut in demographics — but it’s specific regarding the economic circumstances of its various personas. 

Its value proposition is based on the fact that its food is affordable. The franchise positions itself as a low-cost alternative to more expensive options in the markets it attempts to sell in. For example, when promoting its McCafe line, the brand highlighted its low price points as a major selling point.

Coca-Cola’s Target Market

Coca-Cola’s targeting strategy is broader due to its global market presence and the various products they offer. But their primary target market is younger customers between 10 and 25 years old, and a secondary market of people between 25 and 40 years old.

The company targets regular cola drinks for people who desire an intense flavor. Meanwhile, diet cola drinks and their variants cater to health-conscious customers. 

Coca-Cola has also expanded its product line to include non-cola beverages to appeal to those who don’t enjoy its traditional cola drinks. For example, Sprite is specifically designed to target college students and teens, while others target the young working group.

The Necessity of Target Market

Your marketing strategy starts with determining your business’s primary target market and defining specific audiences. This will empower you to understand whom you’re selling to and their buying journey. This, in turn, enables you to tailor your messaging and offer specifically to their needs, maximizing the chances of conversions and sales.

Also, keeping your target market research up to date is crucial. Think of it as a living document, a process if you will, and not a one-time open-and-shut thing.

Sender is a marketing tool that helps you utilize your market understanding to create powerful emails and send SMS marketing campaigns from a single platform. Pick your target market, personalize your campaigns using Sender, and keep your audience engaged. 

Key Takeaways

Also read: 

• What is Targeted Marketing? Definition, Strategies
• What is Multichannel Marketing? Definition +6 Strategies

Author Bio

Anmol Ratan Sachdeva is a content marketer and small business consultant who has a strong grip on topics like marketing automation, email marketing, and content marketing. He loves to write about building, improving, and growing a business.