What is a target market and how do you define it?

What is a target market and how do you define it?


The target market is an essential component of the business strategy: the company which has a target market manages its investments more effectively and better controls its growth. This involves determining the category of public to which the offer is marketed, in order to make appropriate decisions in terms of sales, marketing and product development. Example: the bakery that targets a market of local regulars sets up in the heart of the town and sets up a loyalty card; to boost its growth, the bakery is positioning itself on the gluten-intolerant customer segment: it is developing a range of “gluten-free” breads and communicates about this on its social networks; its decision-making is rational, its investments are measured.

> Download: The guide to marketing positioning” align=”middle”/>Defining your target market requires observation, reasoning and instinct. To support its reflection, the company has every interest in relying on tangible measurement tools such as market research, surveys or polls.

The target market covers customers in the broad sense:

  • The user of the product or service. The user of the toy, for example, is the child; the company thinks of the child as part of its product development strategy.
  • The buyer. In the example, the company targets parents and grandparents, and determines its catchment area based on this.
  • The prescriber. In the example, the child is identified as the best prescriber; the marketing department thus concentrates its efforts on communication channels adapted to its age.

Distinguish the spontaneous market from the target market

The market, by definition, refers to the public who are considered potential buyers of a product or service. The spontaneous market is natural and the audience is large. Conversely, the target market is predetermined and the audience is refined. While any business in operation has a spontaneous market, defining a target market requires careful analysis and involves making choices. Drawing :

  • The tourist passing through Paris is potentially a part of the art house cinema market in the 6th arrondissement.
  • Arthouse cinema targets generation Z moviegoers, with low incomes and domiciled in Paris. The exhibitor makes sure to offer a catalog of auteur films, communicates about its theater on TikTok and in a Parisian daily, and offers reductions to people under 25.

This example illustrates the strategic challenge of defining the target market: the movie theater is not content to take advantage of its strategic location to attract customers, the exhibitor is able to deploy the most effective efforts to attract and to retain profitable customers. This is a bias that ensures sustainable growth.

Choose the right time to define your target market

The definition of the target market, in theory, is a prerequisite for the creation of the company or the development of a new offer, insofar as the target market is decisive for all strategic decision-making. The company assumes that it cannot capture all consumer profiles, it defines a priority audience category to focus on its specific concerns.

Example: the unisex hairdressing salon markets a service that potentially interests the entire population. In practice, however, it is aimed at a neighborhood clientele: the client rarely spends an hour in the car to go to the hairdresser. Before opening his salon, the entrepreneur defines his target market, in particular with regard to the competition but also, possibly, according to his own expertise. This is how the hairdresser is able to determine the most strategic location to set up his salon, and to implement the most appropriate pricing policy.

The definition of the target market evolves during the activity. Either because the company realizes that it actually attracts a different target, or because it must adapt the positioning of its offer, or because the company wishes to develop because its success is growing and its resources allow it. If the core target remains relatively constant, the company can modulate its target market over time, to boost its notoriety or its turnover.

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Example: historically, the accounting software publisher sells to large companies, which it identified as its target market when it was created. Later, the publisher becomes aware of the commercial opportunities to be drawn from micro-enterprises, the number of which is increasing in the French business landscape. It redefines its target market to include them. To this end, it determines the type of micro-enterprises to target, liberal professions for example, to adapt its software and communicate effectively on its product.

Observing and measuring consumer behavior

Defining your target market is first and foremost a matter of common sense and observation. When launching its activity: the company identifies with precision the problem that its product or service solves, then identifies the public who is confronted with this problem. At the time of development, the company reasons in reverse: it identifies the problem of a category of people, then designs a product or a service that solves it. Example: the target market of the bakery that sells bread and pastries is made up of the inhabitants of the district, the bakery is therefore set up in a busy place, not very competitive and easily accessible; over time, the bakery observed a new need: the trend for rainbow cakes for children’s birthdays; the bakery is developing this product: it is expanding its target market of parents of young children, living in a wider area.

It should be noted that the analysis of the competition also contributes to defining the target market:

  • The company observes the effective market of its competitors and models its target on it.
  • The company chooses to differentiate itself so as not to suffer from competition. For this, it creates added value or it chooses a niche market.

To refine the results of its analysis, the company uses measurement tools. Upstream, it carries out market studies and surveys. This is an opportunity to collect detailed data in order to enrich one’s knowledge of the target market: age, centers of interest, geographical area or even profession. Once its target market has been defined, the company measures the effectiveness of its targeted actions downstream using quantified indicators. Example: by interviewing a panel of consumers, the clothing brand realizes that its target market is made up of digital natives; it therefore develops a mobile application and pays for an advertising campaign on Instagram; to check the adequacy of its actions, it measures the conversion rate on the application and the click-through rate on advertisements.

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Segment the target market to adapt its strategy

When the company has reliable and precise information about its target market, it remains to exploit it: it is a question of directing its strategic decisions in such a way as to address, or even anticipate, the specific needs and expectations. to its target. In marketing, for example, the company personalizes its campaigns with regard to its audience to ensure that it reaches them.

The company at this stage uses the data collected during its surveys and questionnaires, and proceeds to the segmentation of its market. It divides its target according to segmentation criteria such as: gender, level of education, values, digital maturity, family situation or purchasing behavior. In B2B, the criteria for segmenting the target market differ: workforce, turnover or even international influence. On this basis, the target market is divided into categories, each of which receives special attention when decisions are made.

Example: the Nice glacier identifies in its target market, among other segments, Californian tourists with high incomes and Nice families with children. To satisfy the tourist customer segment, and make its business profitable, the ice cream parlor sells lactose-free ice cream at a high price in high season. To retain families, the ice cream parlor designs playful packaging to attract children and organizes contests on Facebook to engage its community.

To go further, download this free guide to marketing positioning and use it to define your target market.What is marketing positioning?

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