What Is a Target Market
A Target Market is a profiled group of people that would be served by a purpose, whether a service or product. The process of Market Segmentation is the process of understanding and defining groups of people that share a value, lifestyle, or attitude. Target markets are changed by many characteristics that are specific to an individual, and the desires of consumers are changed by other external factors.
Marketing Managers need to understand the surrounding environment in terms of groups of people to consolidate their understanding of consumers, in order to create relevant plans to guide a firm’s efforts.
Finding New Target Markets
There are a few management perspectives that could help firms find new target markets. Environmental management is a strategy that attempts to shape the external environment that it operates in, causing a change in consumer demand. Amazon made an environmental management move by getting customers hooked on fast shipping and lax return policies, Wal-mart is now pushing free 2 day shipping; Google did this by continuing to improve the utility and compatibility of its search engine and other apps.
As previously mentioned, consumers are changed by outside trends. As education rose in quality and availability, the population size of people who lived the lifestyle of a student became big enough for specific companies to come in and serve, and grew the industry and value of the market share.
External characteristics shape attitudes, values, or lifestyles, and the size of members of these segments decreases gradually, while new groups or existing groups can growing size rapidly.
Values are the way the people feel about a certain area in their life. This can be a work ethic, upward mobility, conformity, emerging trends, technological prudence, Environmental conservation, Cause support, group cohesion, brotherhood, family unity, self-sufficiency, Core American values, religious duty, etc.
Lifestyles are important in how people’s needs and interests drive their purchasing decisions. Some customers with specific values may be persuaded to shop in a very specific, predictable, and servable way.
Social Media And Target Markets
Information about people’s interests and opinions can be shared with greater speed now with social media. Brands, customers and events can communicate in real time. Public reviews have also made a similar effect that help share opinions. Due to this ease and availability of information sharing, firms must have an online presence.
A firm must monitor what is being said about their brand, and respond to positive or negative feedback from consumers, even with a good response a firm can survive negative feedback.
Brand Equity is more easily measurable with impression statistics from web analytics, sales figures / other metrics in financial reports, reviews and social media activity. Social media allows a brand to stay in contact with its patrons and easily introduce new products or reward their loyal customers.
Demographics and Market Segmentation
A demographic is a characteristic that a segment of people share. Demographics have an influence in needs, values, and consumption behaviors. I will give examples of how segments as I explain the main demographics. It is important to understand and track demographics because they can help firms better understand how their product or services are desired, studying demographics helps a firm understand the demand it supplies. Over time the number of people in a specific demographic changes, and studying demographics can help companies better survive and prosper with changes.
- income level
- ethnic identity
- education level
- real estate position / housing situation
Target Markets based on Age
- Kids (0 – 8) This market segment is difficult as you more serving the demands of parents with the like of safe plastics use in toys and feeding devices and ingredients in formula, food, or lunch items and additional child development benefits from product).
- Tweens (8 – 12)
- Teens (13 – 19)
- Young Adults (20 – 29)
- Middle Aged Adults (30 – 59)
- Experienced Adults (60 + up)
Now the numbers are not exact but reliable enough to understand there are differences between people of different ages. If you are selling business courses, your better concentration will on the middle aged, and then some of the seniors category. You may receive interest from members of the Young Adults and Seniors, but the concentration of interest is with the middle aged adults, who have had many years of relevant experience in some capacity and will have higher chances of success, also, many members of this group would have had children that are in the teen or young adult categories. Tweens and kids require more work to raise and will often see their parents too busy to start a business on the side.
Target Segments by gender
Target Markets by Income Level
(for simplicity lets use the 2018 Single Withholding limits and annual period)
Income level would definitely makes a huge difference. Private schools with high tuition would seek out higher income families and families in higher income / cost areas. Financial Planners would seek out lower income members, while tax professionals and financial managers would seek out higher income individuals as those members would obtain more value from tax professionals who can save them more money before the next tax season, and financial managers could make more with larger investments.
- Under $10,000 annually
- Under $20,000 anually
- under $45,000 annually
- under $80,000 annually
- under $101,000 annually
- under $251,000 annually
- over 251,000 annually
Target Markets by Employment
- Full time
- Part time
- Salaried, Hourly, Commission
Target Markets by Education level
- Masters and Doctorates.
- Bachelors, Certified and Private Institutions
- High School and no education
Target Markets by real estate position / housing situation
- Live with parents / shared housing
- low income housing
Each demographics have different characteristics such as how much they spend on housing, apparel, or entertainment. You could also make charts showing the concentration of spending by these groups with enough research.
Target Markets by region
- City Sprawl (Urban, Metropolitan, or Rural)
Target Markets by Product Quality Preferences
- Easy Maintenance
- Ease of Use
- Brand Equity
Target Markets by lifestyle choices
- Hippie / Hipster
- Health Conscious
- Sexual Choices
- Culture/Subculture participation
Target Markets by Interests
- Cooking / Recipes (including those of specific diets)
- Business Concepts
- Business Reviews
- Music Streaming
- Music Lyrics (Songgeek, A-Z Lyrics, Genius)
- Landscaping / Gardening
- Plants (Pinterest, Nursery sites)
- Food Reviews (Yelp, Pinterest)
- Financial News (Yahoo Financial, CNN, Internet Explorer, MSN, News Departments like Fox Cavuto, Mad Money)
- Stock Market (Yahoo Financial, CNN, Internet Explorer, MSN, Robinhood, Seeking Alpha, Motley Fool)
- Investing (Investopedia, Entrepreneur)
- Blogs (WordPress, Other Registrars)
- Movies (Fandango, Atom, Theater Websites)
- Popular Personalities and Events (Time, Forbes, Other Media Outlets)
- News (including of all territories)
- TV Shows (Apps, Satellite Providers)
- Events (Ticket Master, Live Nation, Stub Hub)
- Celebrities (TMZ)
- Occupational (BLS, Glassdoor)
- Job Search (Indeed, SnagAJob)
- Band Groups
- Home Decor
- Humor and Comedy
- Food and Drink
- Travel Outdoors, Camping and Word
- Tattoos and Body Enhancements
- Workshop (including all possible materials)
- Hair and Grooming
- Franchises (Marvel, DC, Saw movies, Oceans movies, Jurassic Park)
- Models and Hobbies
- Video Games
Other Possible Segmentation
Target markets are influenced differently by economic factors such as
- Purchasing Power
Income can be found in statistics such as median U.S. Household income, Minimum wage and part time maximum limitations, earnings data, etc. Education plays a huge part in earning potential.
Purchasing Power is the measure of income to the cost of a standard set of goods, and services (lifestyle) relative to a geographical territory, known as the measurement cost of standard of living.
Inflation being the decrease in value of money, or appreciation of goods and services.
a period of low economic activity which can see reduced demand and supply of goods and services.
Target Markets by Political Affiliation
By Health Consciousness
- No Health Consciousness
- Specific Health Consciousness
By Creation Belief
- Philosophy / Other
Target Markets Internet Use
- No Internet Use
- Little Internet Use
- Generous Internet Use
- Integrated Internet use
Target Markets by Needs
Target Markets Regional Identity
- Caucasian Americans
- Asian Americans
- Hispanic Americas
- African Americans
- Middle Eastern Americans
- European Americans
- Other members of Regional inheritance (members born and living in a specific area)