Businesses have long struggled to meet up with their marketing strategies for delivering their products and services to the general public. For startups, which generally have access to low budgets for marketing, the task of having to advertise to the entire public with no basic focus on a particular group can be very daunting and in some cases can turn out to be a waste of time.
The opportunity for companies to focus their energy on attracting a specific group within the general public has led to the creation of the financial and business term “target market”. This article offers all there is to know about target markets and how it functions.
What is target market?
Target market is the collection and classification of a general group of people for the likely to be patronizers of a product or service. The target market is reached using varying parameters, including the age of the group, sex, occupation, location, and others.
Discovering the potential customers of a business is the basic aim of the target market. The target market is a significant part of business decision-making today that guides companies on how to sell, market, design and advertise their products to the public.
Establishing Target Market for businesses
The first step to defining a business’s target market is by establishing the likely consumers that would patronize the product. The test to establishing these target consumers is by reducing the customers based on certain agreed parameters or classifications.
Generally, all products must be created with the demand to offer a solution to a problem in society. The test boils from the fact that the business must seek to solve a solution faced by certain persons in society. The problem must be highly significant and specific to a certain segment of customers or a subset of people. For instance, establishing a social media platform might mean little or nothing to senior citizens but mean a lot to a younger group of people.
The major issue in target marketing is establishing and determining a particular segment that appeals to customers to your brand. Knowing the problem the product seeks to solve and identifying the segment it appeals to, the next heading offers the various market segments for target marketing.
Market segments
Market segments entail classifying the expected population into a collective group having a common feature. This common feature could be age, income level, race, religion, sex, educational level etc.
Customers having similar demographics often patronize the same products and services offered in the market. The target market must be reduced to the most possible segment that appeals to the product. It is also possible to have a product with two or more segments, nonetheless, there must exist a remote segment for the product and a secondary market segment.
1. Geography
The geographic location of the customer is a significant parameter to look into when establishing the market segment for a target market. Location can influence the spending decisions of people within an area.
Geography also includes the climate and the natural environment of the customers. For instance, fur coats would ordinarily sell fast during winter but might not have the best sale in summer. Again, umbrella manufacturers will most likely look for markets with high rainfall and very hot temperatures. In addition, ice creams sell faster in summer but might not be the best of trade in winter.
A similarity shared by the examples above is that they all are influenced by environmental factors
A common factor of the above examples is their target market is all influenced by environmental factors.
2. Demographic
The demographic segment is a broader and more encompassing market segment identification than the geography. Demography appeals to the general attributes that appeal to the physical and or general personality of people, this includes all attributes that influence market decisions excluding geographic attributes and attributes that appeal to the mental capacity of individuals.
The idea of demographic segmentation is the belief that persons with similar compelling attributes will ordinarily be attracted to the same product, irrespective of their psychological or geographic location. For instance, persons within the same age grades, gender, occupation, educational level, race, and other influencing characters.
3. Psychological
This market segment speaks to the common pattern in thinking and general mental capacity shared by the people within the segment. The market segment offers businesses the opportunity to provide their products to persons having a mental attraction to them.
Some of the basic examples of the psychological market segment include the lifestyle of the customers, religion, and other mental compelling factors. Businesses dealing in fashion would ordinarily see celebrities and other trendsetters as their target market. In addition, businesses producing the rosary would appeal to Christian believers to patronize the trade.
Examples of Target Markets
Target markets have influenced and redefined the style of marketing in the business world as far back as can be predicted. The concept offers an easy way for most companies to attract their customers to their businesses while gaining profits in the process.
For instance, a startup dealing with the online sale of food products might attract the demography which often visits the markets. Also, a company dealing in mechanic repairs would better be suited for people with a car. Investing in target market establishments techniques can save the company from the stress of having to figure out ways to navigate the market.
Pros of Target Marketing
1. Saves time: this is perhaps the most significant advantage of target marketing. Time spent on unnecessary marketing to a large pool of customers, which may not patronize the product in the end is highly likely.
2. Saves cost: cost efficiency is another major advantage of employing target marketing techniques. The business can push its attention to advertising to the right customers for increased productivity.
3. It allows for flexibility: the business can shift through its options by monitoring the changes in the market while selecting an appropriate target market appealing to its business.
Cons of Target Marketing
1. Creativity: target market doesn’t allow for creativity in marketing. This disadvantage stems from the limited nature of target marketing in general. Marketers are discouraged from applying varying marketing skills to reach a wide audience.
2. Efficiency: Surprisingly, target marketing is a much greater risk than generally marketing to a wide range of customers. Sometimes, the target market agreed on by the business may turn out to be false.
For instance, McDonald’s originally had children below the age of 14 as its target market, this wasn’t the case as low-income earners, adults and children patronized the fast food restaurant. Also, Gucci originally saw the wealthy class as its target market, today the brand is patronized by middle-income earning future thinking Gen Zs more than the wealthy class.
Conclusion
The target market has been in vogue among businesses for decades, the ideal customer base and the opportunity to offer your services to a direct group without having to waste the necessary revenue of the business on large marketing and promotional activities that would eventually yield little or no results at the end.
Experts believe that the technique of target marketing would soon become the norm and is expected to be the demand of most businesses in the future to come.
