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Defining the Target Market

Defining the Target Market

By understanding the behavioral, demographic, geographic, and psychographic details of a population, organizations can craft segmented target markets for products and services.


Outline the various factors that influence how an organization may segment a market into targeted groups


Key Points

  • When offering a product or service to the market, the standard marketing strategy is identifying key segments within the population of the market who are likely and willing to pay for the goods the organization is offering.
  • The traditional way to segment a market is by using information about demographic, geographic, psychographic, and behavioral factors.
  • Through iteration and filtering of the broader audience, an organization can refine their targeting and improve the efficiency of their marketing campaigns.
  • Organizations have to balance the vision, mission, products, and services of the firm with the values, needs, and personalities in their target market.

Key Terms

  • iteration: A variation or alternative version.

Target Market

When offering a product or service to the market, the standard marketing strategy is identifying key segments within the population of the market who are likely and willing to pay for the goods the organization is offering. This market segment will likely be the most cost-effective to advertise to, with the highest possible percentage converting to paying consumers.

A diagram that shows three circles (one large, medium, and small). The large circle represents that total available market, the medium circle is the served available market, and the small circle is the target audience. It indicates how to simplify the total available market to determine the target audience.

Target Market: To define the target market, you identify the broader market population and narrow that down utilizing various factors. This isolates the target market from the broader market.

Defining the Target Market

Defining a target market is simply a process of narrowing down the broader total available market based upon specific metrics. Marketing professionals focus on asking the right questions and measuring the various factors and details of the consumer base in a process referred to as segmentation. Generally, there are four main characteristics of consumer groups that are traditionally used in defining the target market:


Perhaps the simplest of all target market metrics is geography. Where a consumer lives can include considerations such as climate, language, culture, and distribution.


Another common starting point for creating a target market are demographic considerations. These are simple profile facts about individuals, including gender, age, salary, career, education, and other commonly reported information about socio-economics.


A bit more complex than geographic and demographic considerations, psychographic concerns are intangible and often difficult to concretely define. These include attitudes, opinions, values, religion, tastes, and lifestyle.


Behavioral segmentation is all about past consumer behaviors. This is particularly useful for repeat customers and building brand loyalty. Consumers can be considered based on their frequency of purchase/consumption as well as their other purchasing behaviors (buying competitor products, or complementary goods).


By iterating and experimenting, organizations can refine their target market metrics and filters to optimize their marketing budget and get the best potential return on investment. Target marketing is all about understanding that no organization can be everything to everyone, and finding the perfect target group is strategically better than catering to everyone at once.

Organizations have to balance the vision, mission, products, and services of the firm with the values, needs, and personalities in their target market.