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What is a target market?

Your target market means the people you want to sell your products or services to.

If you try to sell to everyone, you’ll find it very difficult to focus your marketing efforts. Identifying and understanding your potential customers will make it much easier to market your business effectively. It helps you understand:

  • where your customers are
  • their buying habits
  • their problems and pain points
  • the best ways to reach them.

You can use this information to tailor your marketing towards the most profitable groups of customers.

1. Research your market

You probably already have a general idea of who your product or service is for. If you don’t, think about what sort of people:

  • have a need your product or service can fill
  • are able and willing to pay for it.

Test your assumptions by doing market research. Market research helps you:

  • understand your customers better
  • identify potential new customers
  • assess your competitors
  • establish what sets you apart from the competition
  • confirm there’s actually a market for your product or service.

2. Segment your market

If your research shows there’s a market for your product or service, see if you can divide that market into segments.

That means splitting your target market into smaller groups of customers based on their characteristics and buying habits. This will help you better target your marketing activities.

Here are some things to consider for each segment.

Demographics

  • How old are these customers?
  • What gender are they?
  • Where do they live or work?
  • What is their relationship status?
  • Do they have children? If so, how old?
  • What is their education level?
  • What do they do for a job?
  • How much money do they earn?
  • What language do they speak at home?

Interests and values

  • What are their hobbies?
  • What do they value in life?
  • What issues do they feel strongly about?
  • What are some of their problems or pain points?
  • Where do they get their news and entertainment?

Buying habits

  • Who makes the buying decisions in their household?
  • What motivates them to make a purchase?
  • Do they shop online or like to see a product in person?
  • How far will they travel to make a purchase?
  • What media or digital channels do they use to find out about products or services?
  • What other products do they buy?
  • Why would they use your product or service?

3. Define your target customers

Once you’ve identified your market segments, define your ideal customer for each segment. Write a short profile of each customer explaining who they are and what they care about.

You can make these profiles quite specific. Having a target customer doesn’t mean others can’t buy your product and service, they’re just not your main priority.

Use your target customer profiles to focus your marketing efforts. Explain how your product or service will fit into your target customers’ lives and meet their needs. Remember that different target customers might need different things from your business.

Target customer examples

  • ‘Busy professionals with children under 10. They care about sustainability and making sure their family eat a healthy, natural diet.’
  • ‘Small services businesses in the northern suburbs who need technical support but can’t afford a full-time IT expert.’
  • ‘Women aged 30 to 55 who want a low-key but fun activity to do with friends. They have a creative streak and are active on Instagram.’

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