Also known as the target audience, a target market is a specific group of consumers that businesses want to attract and sell their production plan of goods or services to.
the target market and how do companies reach it?
A target market can be defined in terms of age, gender, sexual orientation, economic class, race, religion, or location.
The process of categorizing socioeconomic groupings allows companies to find profiles of the typical customer who is most likely to buy products from the company, which in turn provides the basis for creating marketing and sales initiatives that allow the business to build customers within that customer demographic.
Determining your target market is very important for long-term business. Without a clear understanding of which customers are likely to be interested in the company’s products, it is very difficult to take proactive steps to connect with potential customers.
By identifying the basic characteristics of the target audience, and then defining how the company can meet their needs and desires, the process of building a customer base becomes much easier.
While some companies tend to focus on reaching and maintaining a specific target market, others seek to establish ongoing relationships with consumers in many different markets.
This helps insulate the company from sudden changes in customer tastes or financial setbacks that affect the consumer.
For example, if a company operates on one product line that targets teens and another that attracts people aged 50-65, the business can often compensate for unexpected sales drops in one demographic market while continuing strong sales in the other.
Many companies use the concept of the target market to develop new product lines that will allow companies to increase the size of their customer base within the same demographic.
This means that a company that produces sports equipment may produce and market a range of sports memorabilia, such as wall art, a history of various sports, or jewelry with a sports theme.
Consumers who have already purchased sports equipment can buy goods from the auxiliary lines because they trust the products previously purchased from the manufacturer.
It is not unusual for a company to assess its attractiveness in various target markets, and to determine whether there is a need to expand into other markets.
Even companies that are already diversified and have a strong presence in many markets will want to be on the lookout for emerging markets where they can reach new consumer combinations while still targeting existing customers.
For this reason, the task of identifying and qualifying a target market is an ongoing process for companies of any size, ranging from the ordinary store on the street to the multinational company.