As discussed in Intro to Marketing Part I, a target market is the market segment to which a particular product is marketed. It is often defined by age, gender, geography, socio-economic grouping or in B2B sales, industry. Target market is a key concept for your business. The more you know about your target market and how to position your product to sell to that market, the more successful your business will be.
Target Segment Identification
Target segments or markets are often defined by their demographic attributes such as age, gender, geography or income. They are also often grouped by preferences such as trendy, organic, etc. In B2B marketing, target markets are typically defined by industry and business size.
Consumer markets can be specific to a part of the globe or can sometimes be global in nature such as Baby Boomers, those people born from about 1946 to about 1959 in World War II affected countries. This huge segment of the population has been defining market trends since their birth and will continue to do so as they age. In most countries, these consumers are generally better educated and more affluent, and are often the consumers of high end merchandise as well as merchandise that creates quality of life.
In western countries, another segment that has recently been gaining notoriety is the 'tweenies'. These are the aged eight to twelve year olds, no longer children in terms of maturity and taste but not yet teenagers. This sought after group, armed with discretionary income, are the likely segment for those selling electronics and gaming equipment as well as fashion merchandise.
There are also a number of groups that have less household recognition but are very important in the marketplace. One such example is LOHAS. This segment of cosumers who subscribe to Lifestyles of Health and Sustainability (LOHAS) is an enormous marketplace ($228.9 billion in the U.S.) for goods and services focused on health, the environment, social justice, personal development and sustainable living. The consumers attracted to this market have also been collectively referred to as Cultural Creatives. Approximately 30 percent of the adults in the U.S., or 50 million people, are currently considered LOHAS Consumers. The interconnections between global economies, cultures, environments, and political systems play a large role in the holistic worldview of the typical LOHAS Consumer, but equally important are the interconnections of mind, body and spirit within individuals.
Business markets have huge variation based on industry, size, location and governance.
The healthcare industry, for example, has enormous needs for products from basic office supplies to sophisticated electronics, software and equipment, linens, personal consumables and so on. Does the notion of serving the healthcare industry seem too daunting to you as an online reseller? Or, is it too large a segment to be meaningful? Try thinking about smaller segments within this industry such as physicians' offices who buy not only traditional medical supplies but also office furnishings including artwork, paper goods, promotional items, waiting room reading materials, electronics such as pagers and so on.
Manufacturing industries require every manner of tools, specialised and generic parts, machinery and so on. Again, too daunting? Narrow your segment to auto parts manufacturers; narrow again to auto parts manufacturers with revenues of less than £10,000,000.
Who are your target markets? Sports enthusiasts? Travelers? College students? Families with young children? Identify the markets that you sell your services or products to as specifically as possible. The better you know your market, the better you can plan your marketing campaign.
Characteristics of Target Segments
The value of identifying target segments is that they are groups of people with similar points of view and/or similar needs or purchasing patterns. By understanding those segments, you can position your products in the optimal way.
Once a target segment has been identified and described to the extent possible demographically, it is useful to understand that segment's needs. Are they looking for value and efficiency? Do they need support because they have too much on their plates? Are they analytic and particular and have the finances to support that approach? Are they empty nesters looking for ways to enjoy their new lives? Are they people with a strong devotion to a holistic and spiritual approach to life and are willing to make life changes to operate that way?
What kind of resources does your target population have? Are they middle income people who want a bargain or want to buy products that look high end but are economically priced? Are they high income people who prefer to surround themselves with one-of-a-kind creations and seek out fine craftsmaship? Are they wholistic folks who prefer to buy natural and organic and will search the Net looking for goods that match their special needs?
Methods of Receiving Information
Where do you find your target segment and how do they receive information? Are they socialising in MySpace or searching eBay for bargains?
Does your target market purchase frequently? Do they follow sales and buy at a good price or read supporting materials and buy quality? Are they constantly seeking out new sources or do they show purchase loyalty?
The answers to these questions give you the information you need to optimise sales. The next question is, how do you discover what your target market is thinking about and how they purchase? Move on to Intro to Marketing Series Part III – Market Research Techniques.