Every business that’s ever existed dreams of a huge customer base and constant sales with a bottom line that wows… But if you’re continuously falling short of your sales and growth targets, then it might be time to check if you’re selling and marketing your products or services to the right people.
Rather than falling into the trap of thinking you can appeal to everyone all at once (spoiler alert: you can’t), having a narrow target market and audience ensures your products, services, and brand attract and maintain the customers who are going to be interested and (hopefully) make lots of purchases.
In this article, we’re going to help you finally make those profits you’ve dreamed of by clarifying exactly what is meant by “target market” and “target audience.” With this information, you’ll be able to build the right buyer personas for your products and services, so you can build your small business into the empire you deserve.
What is a target market?
First things first, “target market” is a phrase you’ll hear almost daily in the business world. But what does it really mean?
Well, your target market is the people who are going to be buying your products or services. By establishing your target market early on, you can tailor your products accordingly and ensure you’re only spending your precious advertising budget marketing to people who will actually benefit from what you’re selling.
Target markets are usually defined by three aspects:
- Demographics: Things like the age, gender, income, marital status, ethnicity, employment status, etc., of your buyers.
- Geographics: Where your customers are located (this can be as wide as entire continents, or even just a single neighborhood or street).
- Psychographics: What drives your customers? What are their likes and dislikes? What problems do they face in their lives?
By figuring out who your customers are, you’ll be in a better place to market your products… And you could even use this information during upgrades to ensure you’re continuously providing a valuable benefit.
What is a target audience?
Target markets and target audiences can frequently get confused and overlap, but they relate to different people, and it’s essential to have a clear distinction between the two.
While your target market is the end consumer, your target audience is who your brand should be focusing on when advertising.
A good example of this would be for a child-aged target market. Let’s use McDonald’s Happy Meals as an example…
While the Happy Meals are clearly made for kids, the target audience for this product would be the adults responsible for the children. These adults are the ones who choose what the kids eat and will usually be the ones buying the Happy Meals.
Because McDonald’s has clearly identified their target market vs. target audience, you’ll notice adverts for Happy Meals tend to focus on aspects that the target market (kids) wouldn’t be that interested in… Like the nutrition value of the meals, for example.
Another brilliant example of a target market vs. a target audience is the 2010 Old Spice advert, The man your man could smell like. When trying to appeal to a younger audience, Proctor & Gamble (the advertising team behind this campaign along with Nike’s Just Do It) discovered around 60% of men’s body washes and deodorants were purchased by women.
Taking advantage of this information, P&G decided to aim subsequent Old Spice marketing efforts at women with the famous ad featuring Isaiah Mustafa. Like McDonald’s, they successfully identified a difference between their target market (men aged 18 – 35) and their target audience (the wives and girlfriends of these men).
In other words, your target market is whom you’re selling to. Your target audience is whom you’re advertising to.
Why define your target market?
So, now we know what the difference is between a target market and a target audience… But the question still remains, why bother? Surely, marketing to everyone is casting a wider net, and you’ve got more chances of gathering customers?
Any angler will be able to tell you that a wide net isn’t all it’s cracked up to be when catching fish. Sure, you might get one or two valuable catches in a large net, but you’re more likely to end up with a barrel of fish nobody wants.
To really catch fish, you need the right bait, the right equipment, and to be fishing in the right places.
And suddenly, the metaphor of casting a large net continues to be 100% applicable to the world of marketing.
In other words, if you aspire to make everyone a potential customer, you’re less likely to gain attention from people who will actually benefit from and buy your products and services. Instead, focus your marketing efforts on a clearly defined section of the market, and you’ll attract more valuable customers who will help your business grow.
In addition to attracting the right people, defining your target market and audience early on will allow you to:
- Develop the product line by solving specific needs
- Set the right prices
- Determine the perfect marketing channels
- Find the best features to highlight
- Determine the right keywords and SEO criteria
- And much more.
A narrow, specific target audience and market also ensures you’re not spending too much time/money casting a wide net… Enabling you to convert far greater numbers of potential customers with considerably lower overheads.
How to define your target market:
When it’s time to define your target market, you might struggle to know where to start at first. But figuring out the right market segment to advertise to doesn’t need to be difficult if you break it down.
Remember, by marketing to a specific group of people, you can focus on getting the language, tone of voice, and content just right. This enables your message to get across more clearly and will make your audience more likely to buy your product or service.
In addition, having well-defined target customers enables you to start a more genuine and compelling conversation with that group of consumers. And once you’ve cultivated a genuine relationship, you’re more likely to benefit from loyal customers and word-of-mouth recommendations.
To get started building a definition of your target customers, think about the following:
1. Identify the key benefits of your business
Once you’ve established the critical benefits of your business, you’ll probably find your target market becomes clear fairly quickly.
As marketer Philip Kotler said, “authentic marketing is not the art of selling what you make but knowing what to make. It is the art of identifying and understanding customer needs and creating solutions…”
Theodore Levitt elaborates on this with… “people don’t want to buy a quarter-inch drill. They want to buy a quarter-inch hole.”
As Kotler and Levitt identify, it’s not the features of your product or service that will sell… It’s the benefits these provide. For example, if you’re selling exercise equipment, the benefits might include improving customers’ self-image, physical health, mental wellbeing, confidence, and empowerment. These benefits will be more compelling to most target customers than a list of specs.
To identify the key benefits of your product or service, ask yourself the following questions:
- What problem(s) do you solve for people?
- What need(s) do you meet?
- What desire(s) are you fulfilling?
2. Identify who will benefit most from the above.
Once you’ve identified the key benefits of your product or service, you can start thinking about who would benefit most from these features and who would be most likely to buy. This will help you narrow down the demographics for your target market.
For example, if you’re selling at-home exercise equipment, the people who will benefit most from this could be middle-aged, overweight men who don’t have time to go to the gym or young women who don’t feel comfortable in a standard gym.
Think about who your product or service helps the most, and start narrowing them down.
Consider the age, location, gender, income, and any other critical demographics of the market segment you’ve identified and make a note of these.
3. Refine your target market
Once you’ve established the key demographics of the group of consumers who are most likely to benefit from your products or services, it’s time to define your target market even further by building user personas for your customers.
These personas will include the demographics like age range, location, etc., that you defined in step 2 but adds in psychographics.
Psychographics include more personal information about your market segment. These will include things like:
- The customer’s likes and dislikes
- Hobbies and interests
- Daily routines
You can collect this information through a variety of means. If you have established customers already, asking them to provide feedback can be invaluable to businesses. Otherwise, surveys, polls on social media, or any other market research will help you establish precisely who you’re selling to.
4. Stay objective
It might surprise you to realize that this is probably the most challenging step in defining your target market and audience… But it’s also one of the most critical.
When researching your potential customers, you must always stay objective and avoid assumptions, particularly when matching your product’s key benefits with a specific group of people.
In fact, CBInsights discovered that approximately 35% of start-up businesses fail due to a lack of market need.
Even if you think your product is fantastic, you’re likely to fail if you don’t accurately identify a need, want, or desire and address that.
Segway is an excellent example of a business failing due to a poorly defined target market and a product that didn’t fulfill a need.
5. Evaluate the segments
It’s critical to remember that just because someone says they would buy your product or service doesn’t mean they actually will.
You need to ensure the market segment you’ve identified is a viable customer group by asking the following questions:
- Is this group large enough to sustain the business?
- Does the market segment have sufficient income to afford the products and services being sold?
- Will these people make multiple purchases, or will you constantly need to be attracting new customers?
- Are other brands targeting the same market segment? Why/why not?
- What separates your brand from similar companies, products, and services?
- How accessible is the target market you’ve identified?
Following any research into this evaluation, it’s vital to create real-life tests to directly engage with your prospective market.
6. Identify who influences the buying decision.
Once you’ve defined your target market, it’s time to turn your attention to your target audience. Remember, your target market is the group of people who might want to buy your product. Your target audience relates to the people who will be making or influencing the purchase decision.
The most obvious example of this is how products for children need to be marketed to parents or guardians, as kids don’t have any buying power themselves. But this can also take into account a far wider group of people as purchase decisions are rarely made in a vacuum.
Consider the friends and family of your target customers. Would a good/bad word from a sibling change your potential customer’s mind about buying? If it’s a big-ticket item, would your customer want to check with their spouse or partner first? How can you convince these ‘influencers’ that your products and services are worth buying?
If you’re providing products and services for B2B clients, this can be even more complicated as purchases may need to be approved by multiple people before they can go ahead.
7. Check your competitors
As part of your marketing strategy, you should have completed a SWOT analysis (strengths, weaknesses, opportunities, threats) of your business. Now, it’s time to ensure you’ve done the same for your competition, starting with the top stores on Shopify and working back to your closer competitors.
Use social media, Google, and customer research to determine what target audiences your competitors are focusing on and whether those individuals align with your business.
If you’re advertising to the same group of people, figure out what these people find great/bad about the competition and use this to guide your own marketing efforts.
Target market examples
Now you know how to define your specific target market, it can be helpful to see how other companies have used targeting research to build a detailed target audience profile. These well-known brands offer a fantastic target marketing plan example that you can use to bring these concepts to life and translate them into your own marketing strategy.
Nike provides an excellent target market demographics example. Once, Nike marketed to professional athletes only but changed its business model to accommodate a broader, more approachable audience with the Just Do It campaign.
As part of the rebranding, Nike considered the benefits of its sports apparel, shoes, accessories, and equipment and who these benefits would most appeal to.
Their targeting includes a young age range, people interested in getting fitter, individuals with some disposable income to spend on high-quality products.
To further narrow down the target market, Nike specifically focuses on aspiring athletes and runners in most advertising campaigns and utilizes an inspiring, motivational, inclusive tone of voice that appeals to a younger audience who are ready to push beyond their limitations.
We know what you’re thinking… “but Netflix targets everyone?!” While this may be partially true, have you ever taken a look at someone else’s Netflix account and noticed how different it looks from your own?
With detailed algorithms and substantial customer research, Netflix intelligently targets individual preferences in its marketing strategy, ensuring each person receives a well-defined and highly tailored experience.
It’s also worth noting that Netflix started as a DVD delivery service, mailing DVDs to rent to its customers. As online streaming took over, Netflix analyzed its customers’ needs and made the switch to provide an online service. Now offering apps and even downloadable, offline shows and movies, still highly tailored to individual preferences.
This cool and quirky footwear brand is another excellent example of target marketing at work. The brand appeals to “misfits and rebels,” with a daredevil outlook that may not attract every shoe-wearing citizen but is sufficiently focused so that rebels worldwide can’t get enough.
Like Netflix, Vans allowed the customers to guide their business decision and utilized highly targeted market research to ensure every product matched their audiences’ desires perfectly.
Target marketing plan example
Before we leave you, we thought it might be helpful to include a detailed target marketing plan example. This fictitious target market for a software company will give you an idea of the demographics you should include when analyzing your customer base, so you can see precisely how to define your target market in a B2B scenario:
- Age range: 35-45 years old.
- Gender: 65% male, 35% female
- Common job titles: Chief financial officer, head of digital, senior accountant
- Values: Job security, affordability, financial growth
- Likes to review all data and complete a full pros/cons analysis before making decisions
- Strives for an improvement to their work/life balance
- Skeptical of any brand that promises to solve all their problems or too-good-to-be-true offers.
Challenges and pain points
- Concerned that their current software can’t keep up with increasing demands and improvements to modern technology.
- Aware that a lack of third-party integration means internal processes cannot be performed efficiently.
- Demands from bosses and/or shareholders create a stressful work environment with little work/life balance.
Preferred communication channels
- Professional social media platforms such as LinkedIn
- Regularly browse the internet for the latest industry news
- White papers with plenty of detail
- Case studies
- News articles
Now you know how to find your target markets, the difference between a target audience and a target market, and some real-life examples of how to write a target market strategy. You should be well on your way to attracting and maintaining a loyal, engaged customer base.
But it’s important to remember that figuring out who your ideal customers are is only the first step. Once you’ve identified the age, location, gender, interests, pain points, and other aspects of your target market sample, it’s vital to focus on the communication channels markets can use to communicate with these segments.
Google Analytics is one of the best tools for determining where your target market/audience hangs out online. Using this information, you can streamline your marketing efforts on relevant social media platforms, email campaigns, or even offline advertising.
Be sure to focus on getting the tone of voice and language just right in any messaging, and have high-quality landing pages that reflect your audience’s interests to retain the best customers and keep them coming back for more.
Once you’ve done this, you’re sure to experience market growth like never before.
How do you define a target market?
A target market is a segment of people who are likely to benefit from the products or services your business is selling. You can narrow this group into as many smaller segments as you like to help your marketers find the perfect methods to get your messaging across.
Target markets are usually defined by key demographics, including age range, gender, income, geographic location, and more. They will be further narrowed down with psychographics, including likes and dislikes, key values, pain points, lifestyle, etc.
How do you define a target market vs. target audience?
Target markets take into account the people you’re selling to at market. However, a target audience will be the person or people who make the purchase decision and are the ones you’re advertising to.
A good example of the difference between these two aspects is a product for children. While kids aged 3-4 might be the target market, the target audience would be the parents or guardians, as these are the ones who make the purchase decision.
Old Spice is another good target market vs. target audience profile example. Although the product is for men, the man your man could smell like campaign utilized messaging for the end-users’ wives, girlfriends, and partners. The market was men; the audience was the women buying the product on their behalf.
How do I identify my target market?
Plenty of research is required to accurately identify the right target market for your products or services. Conversations with any customers you already have are invaluable. You can utilize things like social media polls, surveys, or even email research to help you determine your target market and existing customers.
Google Analytics is also an incredibly valuable tool when establishing your target market. This will help you see where your audience spends their time and what keywords they’re searching for that might be relevant to your messaging.
Suppose Facebook is an appropriate channel for your marketers to use. In that case, Facebook’s custom audience tools can also be handy for your market research and to aid you with narrowing down your market segments.
How do you write a target market statement?
Take a look at our target market statement examples above for an overview of the things you should include in a target marketing strategy. As a summary, you should be looking to include aspects such as:
- Age range
- Job title
- Geographical location
- Current challenges