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A target market is a group of customers within the serviceable available market that a business has decided to aim its marketing efforts towards. A well-defined target market is the first element of a marketing strategy. Product, price, promotion, and place are the four elements of a marketing mix strategy that determine the success of a product or service in the marketplace. It is proven that a business must have a clear definition of its target market as this can help it reach its target consumers and analyze their needs and suitability.
A target market is a group of people considered likely to buy a product or service and that has been selected by an organisation as the focus of its marketing activities. A target market consists of customers that share similar characteristics, such as age, location, income and lifestyle.
Target markets can be separated into primary and secondary target markets. Primary target markets are those market segments to which marketing efforts are primarily directed and secondary markets are smaller or less important. For instance, the primary target market for a jewellery store might be middle aged women who care about fashion, and their secondary target market could be middle aged men who may want to buy gifts for the women in their lives.
- 1 Overview
- 2 Marketing mix (4 P's)
- 3 Strategies for reaching target markets
- 4 The psychology of target marketing
- 5 Online targeting
- 6 See also
- 7 References
It is important for a business to identify and select a target market so it can direct its marketing efforts to that group of customers and better satisfy their needs and wants. This enables the business to use its marketing resources more efficiently, resulting in more cost and time efficient marketing efforts. It allows for better understanding of customers and therefore enables the creation of promotional materials that are more relevant to customer needs. Also, targeting makes it possible to collect more precise data about customer needs and behaviors and then analyze that information over time in order to refine market strategies effectively.
Target markets or also known as target consumers are certain clusters of consumers with similar or the same needs that most businesses target their marketing efforts in order to sell their products and services. Market segmentation including the following:
- Geographic - Addresses, Location, Climate, Region
- Demographic/socioeconomic segmentation - Gender, age, wage, career, education.
- Psychographic - Attitudes, values, religion, and lifestyles
- Behavioral segmentation - (occasions, degree of loyalty)
- Product-related segmentation - (relationship to a product)
Market segmentation divides the market into four main sub categories – demographic, geographic, psychographic and behavioural segmentation. After doing market segmentation the subdivision market will be much more specific and it is relatively easy to understand consumer demand, enterprises can determine their own service objects according to their business ideology, principles and production technology and marketing power. To aim at the small target market, which is easy to formulate the special marketing strategy. At the same time, in the segments of the market, the information is easy to understand and feedback, once the consumer demand changes, enterprises can rapidly change marketing strategy formulated corresponding countermeasures, in order to adapt to the change of market demand, improve the flexibility and competitiveness of enterprises. Through market segmentation, the enterprise will be able to notice every subdivision market purchasing potential, satisfying degree, competition and comparative analysis, to better meet market needs. Meanwhile, the manpower, material resources and funds of any enterprise are limited. Through market segments, after select the suitable target market, enterprises can focus more on human, financial, and material resources, to fight for the advantages of local market, and then to occupy their own target market. Segmenting the market allows marketers to better understand the group they are aiming their message at, which is more efficient than aiming at a broad group of people. Segmentation has been an essential part of marketing since industrial development induced mass production, particularly in manufacturing. This caused the focus to shift from customer satisfaction to reduction of production costs. However, as manufacturing processes became more variable, and consumer demand diversified, businesses needed to respond by segmenting the market. Businesses who were able to identify specific consumer needs were able to develop the right message for consumers within particular segments, which gave them a competitive advantage (Wedel & Kamakura, 2012). Since being introduced by Wendell R. Smith in 1956, the theory has become a key concept in marketing. Smith stated: "market segmentation involves viewing a heterogeneous market as a number of smaller homogeneous markets, in response to differing preferences, attributable to the desires of consumers for more precise satisfaction of their varying wants." (Wedel & Kamakura, 2012). Not establishing a target market will often result in a poor response from consumers, or no response at all. The aim of market segmentation for businesses is to gain a competitive advantage by having a better understanding of a specific segment than its competitors. Hunt and Arnett (2004) use the example of Black and Decker power tools, and the way the company segmented the market into three main groups. After identifying each different group, Black and Decker then designed one separate power tool range for each segment, based on their characteristics. "To target each segment, B&D uses specific products lines with different brand names" (Hunt & Arnett, 2004).
Demographic segmentation refers to aspects of a market such as age, gender, race, occupation and education. Creating a message aimed at a particular demographic allows the sender to reach a wide range of receivers, while still staying within the confines of a specific segment. "Demographic segmentation almost always plays some role in a segmentation strategy" (Thomas, 1980), and is often paired with other segments to create a slightly more specific segment. A luxury good or service may be marketed to high income earners if the marketer believes that it would be relevant across a large enough portion of the segment to make it profitable for the sender, or create the awareness intended. Certain brands only target working professionals whereas others might only target people who are at high school.
Geographic segmentation divides the market by location. This could be divided into countries, cities, towns and neighborhoods etc. Different geographic locations usually have different aspects to their environment, which allows marketers to appeal to the specific needs of each location. For example, marketers could target tractors specifically towards rural areas where there are likely to be a number of farmers who operate tractors. In contrast, it would not make sense to market those same tractors in an urban area where people are not likely to find them as useful (Thomas, 1980).
Psychographic segmentation relates to dividing a market based on how they live their everyday lives. This could encompass their values, as well as their personality, attitudes and general interests (A. S. Boote, 1984). According to Boote (1984), a popular psychographic segment in marketing is personal values. In the example used, a segment categorised by how much money a consumer is willing to spend on a product could be defined by certain inclinations when shopping. One being – "spending no more money than is necessary…even if it means not buying the best." Another orientation being – "shopping around to get the best price once I have decided on the kind of product I want to buy." By learning about these orientations, the marketer is able to gauge different attitudes of the consumers potentially being targeted.
Behavioural segmentation subdivides the market depending on how consumers behave towards a product. Consumers behave differently depending on occasions and the frequency of usage of a product. For example, a spouse may not usually spend money on flowers for their significant other, but might on Valentine's Day, as it is a special occasion. "Many Marketers believe that behaviour variables are the best starting points for building market segments" (Tatum, 2007).
Market segmentation involves subdividing the total market into groups of people who share common characteristics, to which the business can direct specific marketing efforts. Segmenting markets aims to increase sales, market share and profits by better responding to the desires of the different target customer groups. A segmentation variable is a characteristic of individuals or groups used by marketers to divide a total market into segments. Markets can generally be segmented according to four main variables: demographic, geographic, psychographic and behavioural characteristics.
One key to identifying the best target market is assessing brand loyalty involving attitudes and behaviors toward the brand. Buyer groups can be divided into the following: those loyal to the brand, those who buy your brand but also buy from competing brands, those who buy more than one competing brand, those who are regularly loyal to another brand, and new users who are entering for the first time or re-entering. Loyalty, which concerns consumer attitudes in terms of interest in competitive alternatives, overall satisfaction, involvement, and intensity, has become increasingly important in competitive markets.
Demographic segmentation is the process of dividing the total market according to particular characteristics such as age, gender, family size, family life cycle, income, occupation, education, religion, race, and nationality. Age and gender are two of the most commonly used demographic variables used to segment markets. Demographics are useful and widely used but should be coupled with other segmentation variables to effectively define a target market.
- Gender: Due to physiological differences, males and females have very different product demands and preferences, for example, in clothing, hair care, and other lifestyle items.
- Age: Consumers of different ages have different demand characteristics. Young people, for example, might demand bright, fashionable clothing, while the elderly prefer dignified and simple but elegant dress.
- Income: Lower income and higher income consumers will be quite different in product selection, leisure time arrangement, social communication and communication and so on.
- Occupation and education: Consumers with different occupations education levels desire different products. For example, farmers prefer to buy load-carrying bicycles while students and teachers love light, beautiful style bikes.
- Family life cycle: Families can be divided into five stages based on age, marital status, and children. These are newly married, full nest, empty nest and lonely. In different stages, family purchasing power and interest in particular goods and services vary greatly.
Geographic segmentation is the process of dividing the total market according to geographic location, for instance region (urban, suburban, rural, city size), climate and land type. Businesses may do this because different regions may present different needs and provide different commercial opportunities. For instance, an ice cream shop would be more likely to start up in a hot location than a cold climate. Identifying regional preferences and attitudes can help campaigns to be better targeted for particular geographic areas.
Psychographic segmentation is based on personality characteristics, mainly includes the consumer's personality, the life style, the social class, the motive, the value orientation. Businesses can do this by researching consumer's preferences, likes and dislikes, habits, interests, hobbies, values and socioeconomic group. These variables are concerned with why people behave the way they do and are often used effectively in conjunction with other segmentation variables. Psychographics also relates to attitudes toward certain activities like fitness, willingness to take risks, concern for the environment, political opinions, concern with fashion, and innovativeness. Values and culture are strongly linked to how people think and behave and are important aspects of segmentation variables, especially in global campaigns. Personality traits such as self-esteem, intelligence, and introversion/extroversion also affect the processing and persuasiveness of communication.
Lifestyle: Lifestyle is a particular habit of individuals or groups in the consumption, work and entertainment. Different lifestyles tend to produce different consumer demand and purchase behavior, even on the same kind of goods, there will be different needs in the quality, appearance, style, and specifications. Today, many consumers does not only buy goods to meet the material needs, it is more important to show the performance of their lifestyle, to meet the psychological needs, such as identity, status, and the pursuit of fashion.
Social class: Due to the different social class have a different social environment, different backgrounds, and different characteristics of different consumer preferences, demand for goods or services are quite different. Philip Kotler divided American society into six classes.
- Upper uppers: Inheritance property, family background has famous celebrities.
- Lower uppers: The extraordinary vitality in the occupation or business and get higher income or wealth.
- Upper middles: They are extremely concerned about their careers, they are doing special occupations, independent entrepreneurs and managers.
- Lower middles: Middle-income white-collar and blue collar workers.
- Upper lowers: Low wages, life is just at the poverty line, the pursuit of wealth but no skills.
- Lower lowers: The poor, often rely on long-term unemployment, or public charity relief to the people. People in different social classes, the demand for cars, clothing, furniture, entertainment, reading, there is a big difference.
Personality: Personality refers to the individual's unique psychological characteristics, this psychological characteristics of individuals and their environment to maintain a relatively consistent and lasting response. Everyone has a unique personality affecting their buying behavior. To distinguish between different personality, there is a strong correlation between the premise and specific personality with the product or brand choice, so personality can become the market segments of the psychological variables.
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Behavioral segmentation relates to customers’ knowledge, attitude, use of product and the purchase occasion, such as special one-off or regular loyal buying. Identifying what customers want from products and the benefits they seek are important to behavioural segmentation to allow marketers to better design and select products that satisfy these needs . Many marketers believe that behavioral variables are the best starting point for market segmentation.
- Opportunity: It is the time consumers buy and use the product. these opportunities include marriage, divorce, purchase, moving, demolition, admission, study, retirement, travel, tourism, holidays, and so on. It will help improve brand usage and marketing targeted. Such as travel agencies can provide specialized travel services at Christmas, stationery enterprises can begin to provide more learning supplies before new semester.
- Benefit: Benefit segmentation is a kind of classification method based on the different interests of consumers from the brand products.Using the benefit segmentation method, what must be determined is the benefit people are seeking for, who are seeking these benefits, how important to them these benefits are, what brand can offer these benefits, what benefits have not been met.
- User status: According to the state of use, consumers can be classified into once users, nonusers, potential users, the primary user, occasionally users and often user type, for different type of consumers the brand should use different marketing strategies and methods. The brand who has a high market share can focus more on the potential users to change them to the actual users, such as leading brands; some small businesses can only be used as an often user services.
- Brand loyalty: Consumer loyalty is the most valuable wealth of enterprises. Consumers can be divided into four types according to their brand loyalty: True Friends, Butterflies, Barnacles and Strangers.
- True Friends: They are the highest level of the four types and the most important part of the customer group. For example, a fan of a Swiss knife, they will keep telling their friends and neighbors the benefits of this knife, their frequency of use. These loyal customers will be free of charge to the brand, and continue to recommend to others. For any business, this is the most popular type of customer.
- Butterflies: Butterflies are not particularly loyal, but have spent money on your products and brought in good revenue. An example of a butterfly would be someone that supports Microsoft in general, but buys the iPhone since it happened to be the best available phone on the market.
- Barnacles: Here is where some companies, especially B2B companies, find a surprising amount of their customer base falls into. Barnacles are loyal customers, but they are loyal customers that rarely make a purchase, and may not bring in much of a profit. A great example would be a customer that buys one cup of coffee at your coffee shop, and then comes in every day for the next month to use your free WiFi without making a purchase.
- Strangers: Due to different reasons, some customers are not loyal to certain brands. Generally speaking, enterprises should avoid targeting strangers, because they will never become a sincere customer, they have little contribution to the development of enterprises.
Market segmentation is a marketing strategy that categorises or segments the market based on their characteristics. These categories or segments are demographic, geographic, psychographic, psychological and behavioural (market segmentatio n). Market segmentation is an effective tool for marketers and is said to be a fundamental concept in modern marketing. It realises that individuals have different motivations, desires, lifestyles and tastes. Market segmentation's effectiveness is in ability to divide a market into segments which management can then use to effectively make further informed decisions. By targeting individuals with similar characteristics, management can create an effective marketing plan for their targeted buyers. They can market their brand and develop and advertise products that relate at deeper and personal level with their targeted customers (market segmentationi).
Demographic segmentation is the division of the market based on an individual's sex, age, income and life style. Demographic segmentation is used the most frequently by businesses in comparison to the other market segments. This is possibly because of the ability to easily collect this kind of information. The national census of a country collects this kind of information. Demographic segmentation has been challenged with scholars stating that demographic segmentations such as age and sex are poor behaviour predictors. However, other studies have showed that demographic segmentation is accurate and effective when analysed as a group rather than looking at an individual's behaviour.
Geographic segmentation is the division of the market based on an individual's location. This can be either nationally, regionally or locally and was said to be the first kind of segmentation used practically. Geographic segmentation can be used to compare certain habits and characteristics of different locations. UK's National Food survey showed that Scotland's consumption of vegetables and beverages was much lower than England and Wales.
Psychological segmentation is the division of the market based on an individual's personality, attitudes and interests. This type of segmentation is based around understanding an individual's traits, habits and reason. Segmenting the market based on personality has been met with controversy. Some scholars state that personality is too complex of a segment and shows disappointing results. Psychological studies have seen trends in certain traits displayed by individuals. Mothers who were difficult to persuade to buy products for their child displayed high-esteem personality traits. In contrast, those portraying low self-esteem were easily influenced. Studies have also shown a correlation between aggression and cigarette smokers in men. This kind of research can prove beneficial to a company segmenting their target market psychologically.
Behavioural segmentation is the division of the market based on how individuals react or respond to a product. Behavioural segmentation relates to a consumer's brand loyalty, usage rate and usage situation, to name a few. Consumer's purchase products primarily for their value or benefits and this is the basic element of this segmentation. Many marketers believe the best starting point for constructing market segmentation is behavioural segmentation. This is understandable as this segment deals an individual's reaction to the product exclusively. Businesses can use an individual's reaction to price drops, technology changes and product status to determine how to market their product or service effectively.
Marketing mix (4 P's)
The 4p's, also widely known as the marketing mix or occasionally as the marketing program, is a framework commonly used in marketing that covers four activities that make up the responsibilities of a marketing department or the marketing function. The marketing mix or marketing program is understood to refer to the "set of marketing tools that the firm uses to pursue its marketing objectives in the target market". The traditional marketing mix refers to four broad levels of marketing decision, namely: product, price, promotion, and place. When implemented successfully, these activities should deliver a firm's products or servicres to target consumers in a cost efficient manner. The four core marketing activities include: product, price, place and promotion. 
The marketing mix is the combination of all of the factors at the command of a marketing manager to satisfy the target market.  The elements of the marketing mix are: Product - the item or service that is being offered, through its features and consumer benefits and how it is positioned within the marketplace whether it be a high or low quality product. Price, is a reference to the sacrifices made by a consumer to acquire a product and may include both monetary and psychological costs such as the combination of the ticket price, payment methods and other associated acquisition costs. Place refers to the way that a product physically reaches the consumer - where the service or item is sold; it also includes the distribution channels in which the company uses to get products or services to market. Finally, Promotion refers to marketing communications used to convey the offer to consumers and may include; personal selling, advertising, public and customer relations, sales promotion and any other activities to communicate with target markets. 
The first reference to the term, the ‘marketing mix’ was claimed to be in around 1950 by Neil H. Borden.   Borden first used the term, 'marketing mix' in an address given while he was the President of the American Marketing Association in the early 1950s. For instance, he is known to have used the term 'marketing mix' in his presidential address given to the American Marketing Association in 1953. However, at that stage, theorists and academics were not in agreement as to what elements made up the so-called marketing mix. Instead, they relied on checklists or lengthy classifications of factors that needed to be considered to understand consumer responses. It wasn’t until 1960 when E. Jerome McCarthy published his now-classic work, Basic Marketing: A Managerial Approach that the discipline accepted the 4 Ps as constituting the core elements of the marketing mix.  In the 1980s, the 4P's was modified and expanded for use in the marketing of services, which were believed to possess unique characteristics which necessitated a different marketing program. The commonly accepted 7P's of services marketing include: the original four Ps of product, price, place, promotion plus participants (people), physical evidence and process. 
A ‘Product’ is either a good or service, which is offered to the market by a company. The definition is "something or anything that can be offered to the customers for attention, acquisition, or consumption and satisfies some want or need" (Riaz & Tanveer (n.d); Goi (2011) and Muala & Qurneh (2012)). The product is the main part of the marketing mix where the company can show the different parts of their product compared to that of another product created by another company. The differences can include quality, look, brand name or size. By creating a unique product it allows for a gap in the market to be filled or a new market to be created increasing profits for the company.
Price is the most important factor in determining customer satisfaction; the customer weighs up the price of the item or service and then work out if it will benefit them (Virvilaite et al., 2009). The value of the item to consumers will be different for each individual and therefore the amount that the customer is willing to pay to get the item or service also changes (Nakhleh, 2012). Price is the only one of the 4P's that is required to be set at a certain amount after the other 3 P's have been set. This means that the price of an item can fluctuate dramatically. Out of the 4P's price is also the most important for a business due to the fact that it is the only way that a company can make profit and therefore making sure that the price is right is the most important thing that a company can do. The 3 remaining P's are what are called the variable costs for an organization. The company has to use money to promote, design and distribute a product and the price of the item means has to allow the company to make a profit. The price of the item or service must reflect the supply and demand so that the company is losing out on possible profits from having the price too low or losing sales due to the price being too high. Price can be very influential, a high price may be the best way to gain large short term profits it may not be suitable to keep it at this high price as time goes on. Price can also be used as a means to advertise, short stints of lower prices increase sales for a short time promoting the company.
Riaz & Tanveer (n.d) wrote that Place refers to the availability of the product to the targeted customers. So a product or company doesn’t have to be close to where its customer base is but instead they just have to make their product as available as possible. This improves efficiency and therefore price can be dropped intern increasing sales and profit. For max profits a company's distribution channels must be effective in enticing the customer.
Promotion refers to "the marketing communication used to make the offer known to potential customers and persuade them to investigate it further ". May comprise elements such as: advertising, PR, direct marketing and sales promotion.
Strategies for reaching target markets
Marketers have outlined four basic strategies to satisfy target markets: undifferentiated marketing or mass marketing, differentiated marketing, concentrated marketing, and micromarketing/ nichemarketing.
Mass marketing (Undifferentiated Marketing)
Undifferentiated marketing/Mass marketing is a method which is used to target as many people as possible to advertise one message that marketers want the target market to know (Ramya & Subasakthi). When television first came out, undifferentiated marketing was used in almost all commercial campaigns to spread one message across to a mass of people. The types of commercials that played on the television back then would often be similar to one another that would often try to make the viewers laugh, These same commercials would play on air for multiple weeks/months to target as many viewers as possible which is one of the positive aspects of undifferentiated marketing. However, there are also negative aspects to mass marketing as not everyone thinks the same so it would be extremely difficult to get the same message across to a huge number of people (Ramya & Subasakthi).
Differentiated marketing strategy
Differentiated marketing is a practice at which different messages is advertised to appeal to certain groups of people within the target market (Ramya & Subasakthi). Differentiated marketing however is a method which requires a lot of money to pull off. Due to messages being changed each time to advertise different messages it is extremely expensive to do as it would cost every time to promote a different message. Differentiated marketing also requires a lot time and energy as it takes time to come up with ideas and presentation to market the many different messages, it also requires a lot of resources to use this method. But investing all the time, money and resources into differentiated marketing can be worth it if done correctly, as the different messages can successfully reach the targeted group of people and successfully motivate the targeted group of people to follow the messages that are being advertised (Ramya & Subasakthi).
Concentrated marketing Or Niche marketing
Niche marketing is a term used in business that focuses on selling its products and services solely on a specific target market. Despite being attractive for small businesses, niche marketing is highly considered to be a difficult marketing strategy as businesses may need thorough and in-depth research to reach its specific target market in order to succeed.
According to (Caragher, 2008), niche marketing is when a firm/ company focuses on a particular aspect or group of consumers to deliver their product and marketing to. Niche marketing, is also primarily known as concentrated marketing, which means that firms are using all their resources and skills on one particular niche. Niche marketing has become one of the most successful marketing strategies for many firms as it identifies key resources and gives the marketer a specific category to focus on and present information to. This allows companies to have a competitive advantage over other larger firms targeting the same group; as a result, it generates higher profit margins. Smaller firms usually implement this method, so that they are able to concentrate on one particular aspect and give full priority to that segment, which helps them compete with larger firms.
Some specialities of niche marketing help the marketing team determine marketing programs and provide clear and specific establishments for marketing plans and goal setting. According to, (Hamlin, Knight and Cuthbert, 2015), niche marketing is usually when firms react to an existing situation.
There are different ways for firms to identify their niche market, but the most common method applied for finding out a niche is by using a marketing audit. This is where a firm evaluates multiple internal and external factors. Factors applied in the audit identify the company's weaknesses and strengths, company's current client base and current marketing techniques. This would then help determine which marketing approach would best fit their niche.
There are 5 key aspects or steps, which are required to achieve successful niche marketing. 1: develop a marketing plan; 2: focus your marketing program; 3: niche to compete against larger firms; 4: niche based upon expertise; 5: develop niches through mergers.
Develop A Marketing Plan:
Developing a market plan is when a firms marketing team evaluates the firms current condition, what niches the company would want to target and any potential competition. A market plan can consist of elements such as, target market, consumer interests, and resources; it must be specific and key to that group of consumers as that is the speciality of niche marketing.
Focus Your Marketing Program:
Focusing your marketing program is when employees are using marketing tools and skills to best of their abilities to maximise market awareness for the company. Niche marketing is not only used for remaining at a competitive advantage in the industry but is also used as a way to attract more consumers and enlarge their client database. By using these tools and skills the company is then able to implement their strategy consistently.
Niche To Compete Against Larger Firms:
Smaller and medium-sized firms are able to compete against niche marketing, as they are able to focus on one primary niche, which really helps the niche to grow. Smaller firms can focus on finding out their clients problems within their niche and can then provide different marketing to appeal to consumer interest.
Niche Based Upon Expertise:
When new companies are formed, different people bring different forms of experience to the company. This is another form of niche marketing, known as niche based on expertise, where someone with a lot of experience in a specific niche may continue market for that niche as they know that niche will produce positive results for the company.
Developing Niches Through Mergers:
A company may have found their potential niche but are unable to market their product/ service across to the niche. This is where merging industry specialist are utilised. As one company may have the tools and skills to market to the niche and the other may have the skills to gather all the necessary information required to conduct this marketing. According to (Caragher, 2008), niche marketing, if done effectively, can be a very powerful concept.
Overall, niche marketing is a great marketing strategy for firms, mainly small and medium-sized firms, as it is a specific and straightforward marketing approach. Once a firm's niche is identified, a team or marketers can then apply relevant marketing to satisfy that niche's wants and demands.
Niche marketing also closely interlinks with direct marketing as direct marketing can easily be implemented on niches within target markets for a more effective marketing approach.
Direct marketing is a method which firms are able to market directly to their customers needs and wants, it focuses on consumer spending habits and their potential interests. Firms use direct marketing a communication channel to interact and reach out to their existing consumers (Asllani & Halstead, 2015). Direct marketing is done by collecting consumer data through various means. An example is the internet and social media platforms like Facebook, Twitter and Snapchat. Those were a few online methods of which organisations gather their data to know what their consumers like and want allowing organisations to cater to what their target markets wants and their interest (Lund & Marinova, 2014). This method of marketing is becoming increasingly popular as the data allows organisations to come up with more effective promotional strategies and come up with better customize promotional offers that are more accurate to what the customers like, it will also allows organisations to uses their resources more effectively and efficiently and improve customer management relationships. An important tool that organisations use in direct marketing is the RFM model (recency-frequency-monetary value) (Asllani & Halstead, 2015). Despite all the benefits this method can bring, it can be extremely costly which means organisation with low budget constraints would have trouble using this method of marketing..
The psychology of target marketing
A principal concept in target marketing is that those who are targeted show a strong affinity or brand loyalty to that particular brand. Target Marketing allows the marketer or sales team to customize their message to the targeted group of consumers in a focused manner. Research has shown that racial similarity, role congruence, labeling intensity of ethnic identification, shared knowledge and ethnic salience all promote positive effects on the target market. Research has generally shown that target marketing strategies are constructed from consumer inferences of similarities between some aspects of the advertisement (e.g., source pictured, language used, lifestyle represented) and characteristics of the consumer (e.g. reality or desire of having the represented style). Consumers are persuaded by the characteristics in the advertisement and those of the consumer.
Targeting in online advertising is when advertisers use a series of methods in order to showcase a particular advertisement to a specific group of people. Advertisers use these techniques in order to find distinct individuals that would be most interested in their product or service. With the social media practices of today, advertising has become a very profitable industry. People are constantly exposed to advertisements and their content, which is key to its success. In the past, advertisers had tried to build brand names with television and magazines; however, advertisers have been using audience targeting as a new form of medium. The rise of internet users and its wide availability has made this possible for advertisers. Targeting specific audiences has allowed for advertisers to constantly change the content of the advertisements to fit the needs and interests of the individual viewer. The content of different advertisements are presented to each consumer to fit their individual needs.
The first forms of online advertising targeting came with the implementation of the personal email message  The implementation of the internet in the 1990s had created a new advertising medium; until marketers realized that the internet was a multibillion-dollar industry, most advertising was limited or illicit 
Many argue that the largest disadvantage to this new age of advertising is lack of privacy and the lack of transparency between the consumer and the marketers. Much of the information collected is used without the knowledge of the consumer or their consent  Those who oppose online targeting are worried that personal information will be leaked online such as their personal finances, health records, and personal identification information.
Advertisers use three basic steps in order to target a specific audience: data collection, data analysis, and implementation. They use these steps to accurately gather information from different internet users. The data they collect includes information such as the internet user's age, gender, race, and many other contributing factors. Advertisers need to use different methods in order to capture this information to target audiences. Many new methods have been implemented in internet advertising in order to gather this information. These methods include demographic targeting, behavioral targeting, retargeting, and location-based targeting.
Much of the information gathered is collected as the consumers are browsing the web. Many internet users are unaware of the amount of information being taken from them as they browse the internet. They don't know how it is being collected and what it is being used for. Cookies are used, along with other online tracking systems, in order to monitor the internet behaviors of consumers.
Many of these implemented methods have proven to be extremely profitable. This has been beneficial for all three parties involved: the advertiser, the producer of the good or service, and the consumer. Those who are opposed of targeting in online advertising are still doubtful of its productivity, often arguing the lack of privacy given to internet users. Many regulations have been in place to combat this issue throughout the United States.
- Demographic profile
- Market segmentation
- Mass marketing
- Niche market
- Precision marketing
- Serviceable available market
- Total addressable market
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