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What is Target Market
The target market is the part of the market where an organization intends to place its products or services.

Target Market is the part of the market where the company wants to place its products or services. The target market is represented by all the people who meet our criteria of those that we try to reach out to by making our offer (of a product or service) - see customer segmentation.

Why is it good to know our target market?

We cannot satisfy the entire market. Therefore, no company can target all people (or all businesses in case of business customers). We always have to focus on the right customer group (market segment) that our offer is intended for. A target market is therefore defined by some of the target customer’s characteristics.

In case of customers - people, the target market (segment) - can be defined, for instance, by:

  • Geography - the territory or region we target
  • Demographics - e.g. age or gender
  • Shopping preferences - e.g. interest in healthy nutrition

In case of customers - companies, the target market (segment) can be defined, for example, by:

  • Geography - the territory or region we target
  • Company sizes - e.g. small, medium or large businesses, corporations
  • Filed of business activity - e.g. manufacturing companies, IT companies, hospitality companies, etc.

Your current customers come from the target market and your future customers are on the target market too. Therefore, everybody interested in your offer is part of your target market. The focus of all marketing and business activities should be part of your target market and that is what makes the knowledge of your target market so important. Targeting people out of your target market will only result in waste of money on marketing and promotion because they will not respond to your offer. Any effort to reach a poorly defined target market does not bring a higher market share, only a lot of useless work instead.

The target market should be described and defined in the most accurate way possible. Only then will you be able to address potential customers effectively.

How do I find out what my target market is?

The definition of the target market is the result of market analysis, segmentation, profiling, and in particular targeting. The procedure is roughly the following:

  • Definition of the offer - a description of the product or service we sell
  • Market research - market situation assessment, trends and market size
  • Segmentation - segment profiling will specify the size and will determine the exact profile of individual target groups (customer segments)
  • Targeting - choosing the target segment, that is a selection of specific target groups (customer segments) to whom our offer (of products or services) is intended, in both the promotional and sales stage.

Related terms and methods:

Related management field:

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Last update: 10.11.2017

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