Target market facts for kids
A target market is a special group of customers that a business wants to sell its products or services to. Think of it as picking out the exact people who would love what you offer. This group usually shares similar things like age, where they live, or what they like to do.
Once a business knows its target market, it can make its marketing efforts fit that group perfectly. This means everything from how they design a product to how they advertise it. They might even do more research to understand what these customers really want and how they shop.
Choosing the right target market is a big step in understanding who your customers are. Sometimes, a business might pick more than one group. They'll have a primary target (their main focus) and a secondary target (another important but smaller group).
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What is a Target Market?
A target market is a group of people or organizations that a company aims its marketing at. The company creates its products, prices, and ads specifically for this group's needs and wants.
Target marketing is different from trying to sell to everyone (mass marketing). It means choosing specific groups to focus on.
Here are some examples of target markets:
- Rolls-Royce cars: Very rich people who want the most fancy and luxurious cars.
- Dooney and Bourke handbags: Teenage girls and young women under 35 years old.
How Businesses Find Their Target Market
Finding a target market is part of a bigger plan called S-T-P. This stands for Segmentation, Targeting, and Positioning.
First, a business divides the whole market into smaller groups (segmentation). Then, it picks the best groups to focus on (targeting). Finally, it decides how to make its product stand out to those groups (positioning).
This plan helps businesses use their money and time wisely. They can create products and ads that truly connect with their chosen customers. It also helps them learn more about what customers need and how they behave.
The first step, market segmentation, means figuring out the total number of people who might be interested in a product. For example, for feminine hygiene products, the total market might be all women aged 14–50. This big group can then be broken down into smaller parts.
Dividing the Market into Groups (Segmentation)
Markets are usually split into two main types: consumer markets and business markets.
- A consumer market is made up of individuals or families buying things for themselves.
- A business market is made up of individuals or organizations buying things to resell, to make other products, or for their daily operations.
Market segmentation is the process of dividing a large market into smaller groups. This can be done in many ways, such as:
- Where people live (Geographic): Like their city, region, or climate.
- Who people are (Demographic/Socioeconomic): Like their gender, age, income, job, or family status.
- What people think and feel (Psychographic): Like their attitudes, values, beliefs, or hobbies.
- How people act (Behavioral): Like how often they use a product, how loyal they are, or when they buy.
- What people need (Needs-based): What specific features or benefits they look for in a product.
For example, a group of men could be split by age (18-24, 25-39, etc.). Or, they could be split by their lifestyle (young singles, traditional families). Understanding these groups helps businesses find the most profitable ones.
After dividing the market, businesses create detailed descriptions of each group. These descriptions show what people in a group have in common and how they are different from other groups. This helps businesses see if their products fit the needs of different groups.
These group descriptions help businesses:
- Find the most appealing groups to focus on.
- Get facts and numbers to decide which groups are best.
- Adjust their products or services to fit different groups.
- Get basic information to help with targeting.
- Use their resources effectively.
After looking at all the possible groups, businesses do more research to pick one or more groups to target.
Choosing the Target Market
A key question when choosing a target market is whether customers' needs are different enough to divide them into groups. If everyone's needs are similar, a business might try to sell to everyone (undifferentiated approach). But if needs are very different, then a targeted approach is better.
When a business targets more than one group, they often call them the primary target market (main focus) and the secondary target market (another important group, perhaps smaller or with growth potential).
Businesses look at three main things when choosing a market:
- How big the group is and how fast it's growing.
- How attractive the group is (e.g., not too much competition).
- If it fits with the company's goals and resources.
Over time, different ways have been used to pick target markets:
- Distance Method: A business targets people who live within a certain distance, like 5 km for a local shop.
- Sales Method: A business focuses on groups that have bought a lot in the past. This is good for retail but assumes past sales will continue.
- Interest Surveys: Businesses ask people who haven't bought yet but seem interested. This can find new customers but is expensive.
Targeting in Other Countries
Choosing target markets in other countries is important for businesses that want to grow globally. It's more complex because countries are so different in terms of market size and risks.
Businesses often use a two-step process for international targeting: 1. Macro-segmentation: They look at whole countries to see how attractive they are (e.g., market size, potential). 2. Micro-segmentation: Then, they look at customers within those countries based on their personal values and social values.
The first step uses information like government data on population and economy to find the best countries to enter.
Making Your Product Stand Out (Positioning)
Positioning is the last step in the S-T-P plan. It's about deciding how to present your product so it really connects with your target market. During the research, businesses learn what makes customers buy. This helps them create a strong positioning strategy.
Companies usually write a detailed positioning statement. This includes who the target market is, what need the product fills, the product's name, its main benefit, and how it's different from competitors. Ads and other communications are then used to share this message with the target audience.
The Marketing Mix (4 Ps)
Once a business has chosen its target market and decided how to position its product, it shapes its marketing mix to fit that group. The traditional marketing mix has four main parts, often called the 4 Ps: product, price, promotion, and place. When done well, these help deliver products or services to customers efficiently.
The 4 Ps are:
- Product: This is the item or service being offered. It includes its features, benefits, quality, and brand name.
- Price: This is what customers give up to get the product. It includes the actual cost, payment options, and any other costs.
- Place: This is how the product reaches the customer. It includes where it's sold and the ways it's distributed.
- Promotion: This is how the business tells customers about the product. It includes advertising, public relations, and sales promotions.
The idea of the "marketing mix" was first used around 1950. Later, in 1960, E. Jerome McCarthy made the 4 Ps famous as the core parts of the marketing mix. For services, more Ps were added, like people, physical evidence, and process.
Product
A ‘Product’ is anything offered to customers that meets a want or need. It's how a company shows it's different from competitors. Differences can be in quality, reputation, features, or packaging.
Price
Price tells customers how much value a product has. A higher price can suggest better quality. Prices can also attract specific groups. For example, high prices might target rich customers, while lower prices target those who care about saving money. Prices can also be changed temporarily to boost sales.
Place
Place means making the product available to the target customers. A business needs to figure out where its target market is most likely to buy the product. This also includes thinking about special needs, like ramps for wheelchair access or baby changing rooms.
Promotion
Promotion is how a business tells potential customers about its offer and convinces them to learn more. This includes advertising, public relations, and sales promotions. Target marketing helps businesses create messages that are just right for their chosen group of customers. Research shows that people are more likely to be interested in ads that seem to understand them.
Ways to Target Customers
Marketers use five main strategies to divide and target markets: mass marketing, differentiated marketing, concentrated marketing (niche marketing), and micromarketing.
Mass Marketing (Selling to Everyone)
Mass marketing tries to reach as many people as possible with one message. When TV first started, many ads used this method. They would play the same commercial for weeks to reach a huge audience. The good thing is it reaches many people. The downside is that not everyone thinks the same, so one message might not work for everyone.
Differentiated Marketing (Different Messages for Different Groups)
Differentiated marketing means advertising different messages to different groups within the target market. This method costs a lot of money, time, and effort because messages are changed for each group. However, if done well, it can be very successful in reaching specific groups and getting them to act.
Concentrated Marketing (Niche Marketing)
Niche marketing focuses on selling products or services to a very specific, small target market. This is popular for small businesses, but it needs a lot of research to succeed.
Niche marketing means a company puts all its resources and skills into one specific group. This can give smaller companies an advantage over bigger ones because they can focus deeply on that one group's needs. This often leads to higher profits.
To find a niche, companies often do a "marketing audit." This means looking at their strengths, weaknesses, current customers, and marketing methods.
Here are 5 key steps for successful niche marketing: 1. Make a Marketing Plan: Figure out the company's current situation, which niches to target, and who the competitors are. The plan must be very specific to the chosen group. 2. Focus Your Marketing: Use marketing tools to make the company known to the niche. This helps attract more customers and grow the business. 3. Compete Against Bigger Companies: Smaller companies can focus on one niche, helping it grow. They can find and solve problems for customers in that niche. 4. Use Expertise: If someone in the company has a lot of experience in a specific niche, they can continue to market to it, knowing it will likely bring good results. 5. Develop Niches Through Mergers: If a company finds a niche but can't market to it, they might team up with another company that has the right skills.
Overall, niche marketing is a powerful strategy, especially for small and medium-sized businesses. Once a niche is found, marketers can create specific plans to meet that group's wants and needs.
Direct Marketing (Talking Straight to Customers)
Direct marketing is when companies talk directly to customers about their needs and wants. It focuses on what customers buy and what they might be interested in. Companies collect customer information from places like the internet and social media (Facebook, Twitter).
This helps them create better, more personalized ads and offers. It also helps them use their resources more wisely and build stronger relationships with customers. While it has many benefits, direct marketing can be expensive.
Online Targeting
Digital tools let marketers target groups even more precisely, sometimes down to just one person! This is called micromarketing or hyper-segmentation. It means businesses can use both differentiated and niche marketing strategies to reach the smallest groups.
Hyper-segmentation uses lots of computer technology, big databases, and smart systems. Information is gathered from how people use the internet (like which websites they visit). This data is combined with their location, age, and brand preferences. Smart software then analyzes this information. Marketers can then create custom ads in real-time for people who are very interested in a product or ready to buy.
With more online data, there's been a lot of focus on micromarketing and how retailers set prices. Research has shown that these strategies can increase profits.
Social media has made advertising to small groups even more effective. People constantly see ads, and advertisers can change the content to fit each person's interests.
The first online targeting happened with email messages. In the 1990s, the internet became a huge advertising platform.
Some people worry about online targeting because of privacy issues. They argue that personal information is collected without people knowing or agreeing. They fear that financial or health information could be leaked.
Advertisers use three steps to target online audiences: 1. Data collection: Gathering information like age, gender, and race from internet users. 2. Data analysis: Studying the collected information. 3. Implementation: Using the insights to create and deliver ads.
New ways of targeting online include:
- Addressable advertising
- Behavioral targeting (based on what you do online)
- Location-based targeting
- Reverse segmentation (building groups based on behavior)
These methods use data from browsing history, which is very reliable. But it also raises concerns about privacy. Many internet users don't know how much information is being taken from them or how it's used. "Cookies" and other tracking systems watch online behavior.
These methods have been very effective for advertisers, producers, and consumers. However, those against online targeting still worry about privacy. Many rules have been put in place to deal with this issue.
See also
In Spanish: Mercado objetivo para niños
- Demographic profile
- Market segmentation
- Mass marketing
- Marketing strategy
- Niche market
- Precision marketing
- Serviceable available market
- Total addressable market
- Positioning
