Understanding a target market, which represents the consumers most likely to purchase a company’s products, helps business owners and managers focus their marketing strategies on individuals based on specific information. An economic analysis is a common tool for developing target marketing strategies.
Target markets commonly include information based on demographics, such as age, race, sex, income, household size or other factors. Companies will define these items in their local market and define marketing messages for each group they feel is relevant to their company. Each group will often respond differently to marketing messages.
According to NetMBA, target market strategies can be single-segment, selective, product or market specialization, and full-market coverage. Each strategy gives a company the opportunity to focus its marketing to individual groups by appealing to their sense of quality and need for products.
Highly specialized firms will usually focus their marketing strategies on specific markets, whereas companies selling common goods will attempt to reach as many consumers as possible. For example, the use of social media and smartphone advertisements can reach younger consumers who commonly use these products.