What is Target Market?
source: wikipedia

 

Market specialization is a business term meaning the market segment to which a particular good or service is marketed. It is mainly defined by age, gender, geography, socio-economic grouping, technographic, or any other combination of demographics. It is generally studied and mapped by an organization through lists and reports containing demographic information that may have an effect on the marketing of key products or services.

A product focusing on a specific target market contrasts sharply with one following the marketing strategy of mass marketing.

Defining a target market requires market segmentation, the process of pulling apart the entire market as a whole and separating it into manageable, disparate units based on demographics.

The market segmentation process includes: 1. Determining the characteristics of segments in the target market. Then separating these segments in the market based on these characteristics. 2. Checking to see whether any of this market segments are large enough to support the organization's product. If not, the organization must return to step one (or review its product to see if it's viable). 3. Once a target market is chosen, the organization can develop its marketing strategy to target this market.

 

The benefits of targeted marketing

 

Targeted marketing enables you to get to appropriate prospective customers more efficiently than any other marketing strategy. Here's some of the benefits of targeted marketing.

The guided missile

Today's anti-aircraft attack method is far more effective. Just one heat-seeking ground-to-air missile is released, which homes accurately in on its target.

Targeted marketing - the way to do it!

That's what targeted marketing is all about. Recruitment agencies say that the ideal job advert will attract just one applicant, and that will be the perfect candidate for the job. Ideally, that is what all advertising should aim for. That's clearly impractical, but your advertising and promotion should be moving in that direction.

Unless you are targeting just one specific prospect (and there are occasions when you could be doing just that), practical targeted marketing could, perhaps be more accurately described as...


...Batch targeting This is where you break your overall target market down into manageable segments - such as one specific industry, or a geographical area, or a demographic profile. The segments should not just be ones which are convenient to you, but ones which allow you to direct, to one specific target market, promotional messages which:

  • Are highly relevant to the prospects in that sector

  • Convince them that you are a specialist in their own activity / interest area

  • Show them that you can meet their own specific needs.

If, for example, you sell office equipment or consumables, you obviously have a vast market - almost every type of business. But, instead of sending out thousands of mailings to every type of business, pick out, say, stone quarries (to pick an unusual example!) You could focus on dust covers for equipment and the more rugged end of office equipment ranges.

You can demonstrate that you understand the needs of the quarrying industry. If you've got a few customers in that type of industry, you will already understand their requirements. If not, pick up the phone and without trying to sell, do a little market research amongst two or three prospects in that sector.

By showing that you are a specialist supplier, you'll stand out from all your other 'me too' competitors. This must be a significant competitive advantage. We know of an insurance broker who was just your average broker until he started to focus on selling insurance to dentists. Within two years, he was the UK's leading broker to the dental profession.

To summarise, the advantages of targeted marketing are:

  • Your attention is focused on one specific market area, which is likely to result in your marketing campaigns being far more cost- and time-efficient.

  • You appear to be a specialist in the prospective customer's own field, and you can increasingly build up a reputation as being just that.

  • Your promotion material is highly relevant to their needs, and is less likely to be junked

  • You stand out from your competitors

  • By differentiating yourself from your competitors, prospective customers are less likely to focus on price as the key issue, thus enhancing your profit margins

 

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