What is a Target Market?

អ្វីទៅដែលជាគោលដៅទីផ្សា

A target market is a specific, defined segment of consumers that a company plans to serve with
its products or services.
Identifying the target market is an essential step in the development of products, services, and
the marketing efforts used to promote them.
Plus, a target market typically contains the end users of a product or service.
This is why famous consultant Peter F. Drucker said, “The aim of marketing is to know and
understand the customer so well the product or service fits him and sells itself.”
This is vital to understand.
To cut through the noise, you need to create products, services, and marketing campaigns for a
specific, well-defined group of people.
Because if you don’t? At best, they’ll be bad products or services that don’t fully meet the
needs and desires of your customers.
But more likely, no one will buy them.
As marketing author Philip Kotler once said, “There is only one winning strategy. It is to
carefully define the target market and direct a superior offering to that target market.”
This target market can be segmented by things like geography, demographics,
and psychographics.
Let’s look at an example.
Target Market Example
McDonald’s is the most valuable fast food brand in the world, and it’s a fantastic example of
demographic target marketing.
Although McDonald’s has grown to target multiple markets and audiences, they’ve created
dedicated products and marketing campaigns for each segment.
For example, one of their core target markets is young children. For this segment, they provide
play areas, happy meals complete with toys, and marketing campaigns featuring Disney
characters and Ronald McDonald.
Target marketing and aggressive pricing have helped McDonald’s consistently maintain
the largest fast food market share in the United States.
But everything is continually changing.
In recent years, McDonald’s sales have been in decline, and they’ve had to react to changes in
their target market.
Let’s explore what happened.
In 2016, millennials surpassed Baby Boomers to become the largest generation in the U.S., and
this avocado-obsessed generation cares more about healthy foods than previous generations.

In response to this change in their target market, McDonald’s updated their products and
services.
Which is why today, McDonald’s offers healthier, fresher menu options, and more upscale
coffee products.
Next up:
What is a Target Audience?
The term “target audience” is narrower than “target market.” It refers specifically to the group
of consumers targeted by marketing messaging.
Advertising specialist Tom Duncan explains: A target audience is “a group that has significant
potential to respond positively to a brand message.”
Your target audience may or may not be the end users of your product, but they are the people
you plan to direct your marketing to.
To communicate effectively with your target audience, you need to understand who they are,
and what their true needs and desires are.
Why?
Because, “no matter what your product is, you are ultimately in the education business,” said
Robert G. Allen. “Your customers need to be constantly educated about the many advantages
of doing business with you, trained to use your products more effectively, and taught how to
make never-ending improvement in their lives.”
What’s more, remember what author and marketing guru Orvel Ray Wilson said: “Customers
buy for their reasons, not yours.”

Let’s revisit the McDonald’s example we looked at above.

Target Audience Example
Although one of McDonald’s key target markets is children, there’s a big problem with this
target market: Children don’t have any purchasing power.
In other words, it’s not the children who buy McDonald’s products — it’s the adults in their
lives.
So, McDonald’s create the Happy Meal to serve their target market of children. However, they
create advertisements promoting the Happy Meal aimed at their target audience of parents.
This is clearly shown in the video advertisement below.
https://www.youtube.com/watch?v=OGgnvAerefM&t=4

The ad highlights things that kids aren’t interested in, but are important to parents: Such as “no
artificial colors, flavorings, or preservatives,” and charitable donations.
What do kids care most about?
The toy, of course! But this gets only a scant mention near the end of the video.
When it comes to Happy Meals, children might be McDonald’s target market, but they’re
clearly not the target audience.
The Key Differences Between Target Market and Target Audience
Target market and target audience are similar, overlapping terms. However, there are key
differences between them, mostly related to the practical implications each has on your
business.
A target market impacts all decisions a small business makes.
Products or services are developed to meet the needs and desires of the target market.
Packaging and pricing decisions are made to appeal to the target market. And sales processes
are structured around the target markets’ shopping preferences.
However, a target audience only impacts decisions related to specific marketing messages.
For this reason, target markets are usually comprised of the end user of a product or service,
whereas target audiences may or may not be.
Target Markets and Target Audiences Can Be The Same
Often the target audience for a marketing message is the same group identified as the target
market.
For example, a yoga leggings brand may identify a target market of single women, age 24-34,
who regularly frequent gyms, and have a demonstrated interest in yoga.
In this example, the target audience will be the same as this target market.
However, marketers can hone in further on the target audience. For example, marketers may
decide to use Instagram advertising to reach their target market.
So now the target audience may be further defined as Instagram users, who follow accounts
such as Yoga Girl and Yoga Inspiration, have recently purchased products online, live in
Portland, Oregon, and value fair trade products.

 
Okay, now let’s talk about why targeting is so crucial to success.
The Power of Targeting
Many people believe that casting a wide net is the best way to catch more fish.
But the most successful fishermen know what type of fish they plan to catch ahead of time.
They make nets with this specific size of fish in mind. And they know exactly where to find these
fish, and when to strategically deploy their nets to catch them.
This is why targeted advertisements are, on average, almost  twice as effective as non-targeted
ads.
Identifying clearly defined target markets and target audiences works like a magnifying glass
that focuses the sun’s rays.
“It’s hard to target a message to a generic 35-year-old middle-class working mother of
two,” said Elizabeth Gardner. “It’s much easier to target a message to Jennifer, who has two
children under four, works as a paralegal, and is always looking for quick but healthy dinners,
and ways to spend more time with her kids and less time on housework.”
With a clearly defined target market, every detail of a product or service can be perfectly
tailored to their needs and desires. This will result in incredibly satisfied customers and
overwhelmingly positive feedback.
Plus, with a well-defined target audience, every detail of a marketing campaign can be perfectly
tailored to appeal to their interests, emotions, and world views.  
If you know how to create marketing messages that truly resonate with your target audience,
you’ll achieve higher conversion rates, and build a more powerful brand.
Because as real-life Mad Men inspiration Howard Gossage said, “Nobody reads ads. People read
what interests them. Sometimes, it’s an ad.”

But that’s not all.

Targeting also enables marketers to take “advantage of the massive torrent of data that the
digital age has turned on to get better results from digital marketing,” said Ray Velez, CTO
of Razorfish.
And this data is vast.
You only have to spend five minutes creating a Facebook ad to be awestruck by the targeting
capabilities of today’s digital marketing tools.
So how can you tap into this power?
How to Identify Your Target Market
Now that you understand exactly what target markets and target audiences are, let’s look at
how you can uncover the market segments you should be targeting.
Step 1: Identify the Key Benefit that Your Business Provides
Get this right and your ideal target market should reveal itself.
Start with the end result you want to create: satisfying customers needs and desires.
“Authentic marketing is not the art of selling what you make but knowing what to make,” said
marketer Philip Kotler. “It is the art of identifying and understanding customer needs and
creating solutions that deliver satisfaction to the customers, profits to the producers and
benefits for the stakeholders.”
You need to be able to answer these questions very clearly:

 What problem do you solve?

 What need do you meet?

 And what desire do you fulfill?

As economist and Harvard professor Theodore Levitt famously said, “People don’t want to buy
a quarter-inch drill. They want to buy a quarter-inch hole.”
Features tell. Benefits sell.
So don’t define what you do or how you do it, such as, “we sell home exercise equipment
online.”
Instead, define what outcomes you provide for your customers, such as, “We help people to
lose weight and get fit, which helps to improve their feelings of confidence and empowerment.
Plus, we help them do it in the comfort of their own homes where they won’t feel self-
conscious, using exercise equipment they can conveniently buy online.”
A great example of a company selling the benefits of a product instead of the features is the
first iPod advertisement.
The main feature of the iPod was that it could store 1GB of MP3 files.
But Apple didn’t promote this feature. Instead, they highlighted the benefit that this feature
provided: “1,000 songs in your pocket.”

Once you’ve clearly identified the benefits of what you do,  it should be fairly obvious who is
most in need of your product or service.
In the Apple example, the target market is obviously early adopters of new technology, who
have a large music collection, and who love listening to music on the move.
From here, Apple could dig deeper into their target market by testing the product with smaller
groups of people who fit within these basic parameters.
Whose needs or desires are you fulfilling?
Are you helping middle-aged overweight men lose weight? Do you help older people maintain
their gardens? Do you help young dad’s save time in the kitchen with cooking tools?
Step 2: Refine Your Target Market
By this point, you should have a basic understanding of who your product or service benefits.
From here, you need to narrow down the market segment you plan to target.
Be as specific as possible.
First, define the demographics of your target market.
Demographics are simply a particular section of a population. You can segment your target
market using demographics such as age, location, gender, marital or family status, occupation,
income level, education level, etc.
Next, identify the psychographics of the people who stand to benefit the most from your
product or service.
Psychographics are consumers’ psychological attributes, like attitudes, values, interests,
lifestyle, and behavior, etc.
Once you’ve done this, you should have clearly defined a buyer persona.
To learn more about creating buyer personas, check out Shopify’s guide on “How To Build
Buyer Personas For Better Marketing.”
Step 3: Stay Objective
This is perhaps the most difficult part of the process.
It can be extremely difficult to avoid assumptions. What’s more, many people unintentionally
search for, recall, and interpret information in a way that confirms their pre-existing beliefs or
hypotheses. This is called confirmation bias.
If you’re not careful, this bias can totally derail any attempt you make to clearly define your
target market and target audience – which in turn, could spell disaster for your business.
And this happens all the time.
In fact, according to CB Insights, 42% of startups fail not due to a lack of funding, but due to a
lack of market need.
In other words, they fail because the entrepreneurs behind them are so blindly passionate
about their product or service, they forget to validate whether or not there’s a true need for it
in the marketplace.
The other mistake businesses make is to conduct plenty of research, but no real testing.
Research is prospective. Testing is proof.
It doesn’t matter how many people tell you they would use your product or service. And it
doesn’t even matter how many people say they would buy your product or service.
It only matters how many people actually buy your product or service.
So don’t ask people if they like your product or if they would buy it. Create an MVP (minimum
viable product) and sell it to them there and then.
That’s the only way to know for sure if there’s a real market need.
Bottom line: Assume no target market cares about your business, brand, products, or services
unless categorically proven otherwise.
Step 4: Evaluate Your Market Segments
Now that you have real insights into who you plan to sell to, you need to verify that this is a
market worth serving.
Ask yourself these questions:

 Are there enough people in the target market to sustain our business?
  Does this market segment have the money to buy our product or service?

 Will they buy repeatedly, or will we have to constantly close new customers?

 Is there much competition for this market segment?

 If there isn’t, why is that?

 If there is, what separates us from the competition – why should customers buy from
us?

 How accessible is this target market?

Once again, research can only take you so far. To conclusively answer these questions, you
need to create real-life tests where you actually engage with your prospective target market.
Summary
Clearly defined target markets and target audiences are vital to the long-term success of any
business.
The scattergun approach can only take you so far – and that’s if you manage to make it past the
start line at all.
So, work to understand who your business serves, and why they should care. And remember
that the only true way to know who you should target is by testing.
Once you’ve defined your target market, ensure that your products or services fulfill their
needs or desires. Then define your target audience – the specific group that you plan to target
your marketing message to.
Remember, casting a wide net is a small business’ death sentence. So get specific.
What is the one key benefit that your business provides to consumers? Leave a comment below
and let us know!