Target market

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Euler diagram showing the relationship among Target Market, Served Available Market (SAM), and Total Available Market (TAM)

A target market is a group of customers a business has decided to aim its marketing efforts and ultimately its merchandise towards.[1] 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.

Target markets[edit]

Target markets are groups of individuals that are separated by distinguishable and noticeable market segmentation including the following:

  • Geographic - addresses (their location climate region)
  • Demographic/socioeconomic segmentation - (gender, age, income, occupation, education, household size, and stage in the family life cycle)
  • Psychographic segmentation - (similar attitudes, values, and lifestyles)
  • Behavioral segmentation - (occasions, degree of loyalty)
  • Product-related segmentation - (relationship to a product)[2]

Strategies for reaching target markets[edit]

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)[edit]

A market coverage strategy in which a firm decides to ignore market segment differences and appeal to everyone with one offer. It is the type of marketing where a product is sold through persuasion to a wide audience. The idea is to broadcast a message that will reach the largest number of people possible. Traditionally mass marketing has focused on radio, television,newspapers and the internet(information technology, social media etc) as the medium used to reach this broad audience. Many companies have begun shying away from mass marketing due to the large expenses involved in reaching the whole market.

Differentiated marketing strategy[edit]

One where the company decides to provide separate offerings to each different market segment that it targets. It is also called multisegment marketing and as is clearly seen that it tries to appeal to multiple segments in the market. Each segment is targeted uniquely as the company provides unique benefits to different segments. It increases the total sales but at the expense of increase in the cost of investing in the business.

Concentrated marketing Or Niche marketing[edit]

This approach focuses on selecting a particular market niche on which marketing efforts are targeted. Your firm is focusing on a single segment so you can concentrate on understanding the needs and wants of that particular market intimately. Small firms often benefit from this strategy as focusing on one segment enables them to compete effectively against larger firms.

Direct marketing[edit]

For sales teams, one way to reach out to target markets is through direct marketing. This is done by buying consumer databases based on the defined segmentation profiles. These databases usually come with consumer contacts (e.g., email, mobile no., home no., etc.).

The psychology of target marketing[edit]

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.[3]

Online targeting[edit]

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.[4] 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.[4] 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.[5] The rise of internet users and its wide availability has made this possible for advertisers.[4] 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.[6]

The first forms of online advertising targeting came with the implementation of the personal email message [7] The implementation of the internet in the 1990s had created a new advertising medium;[8] until marketers realized that the internet was a multibillion-dollar industry, most advertising was limited or illicit [9]

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.[10] Much of the information collected is used without the knowledge of the consumer or their consent [10] 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.[10]

Advertisers use three basic steps in order to target a specific audience: data collection, data analysis, and implementation.[4] 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.[6] 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.[4]

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.[11]

Many of these implemented methods have proven to be extremely profitable.[12] This has been beneficial for all three parties involved: the advertiser, the producer of the good or service, and the consumer.[4] 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.[13] Many regulations have been in place to combat this issue throughout the United States.[14]

See also[edit]


  1. ^ Kurtz, Dave. (2010). Contemporary Marketing Mason, OH: South-Western Cengage Learning.
  2. ^ Cohen A. Wiliam. (2005) The Marketing Plan. John Wiley & Sons, Inc.
  3. ^ Aaker, J., Brumbaugh, A., & Grier, S, & Dick Trickle. (2000). "Nontarget Markets and Viewer Distinctiveness: The Impact of Target Marketing on Advertising." Journal of Consumer Psychology (Lawrence Erlbaum Associates), 9(3), 127. Retrieved from Academic Search Premier database
  4. ^ a b c d e f Cole, Agatha (2012). "Internet Advertising After Sorrell V. IMS Health: A Discussion on Data Privacy & the First Amendment.". Cardozo Arts & Entertainment Law Journal 30 (2): 283–316. 
  5. ^ Draganska, Michaela; Hartmann, Wesely R; Stanglein, Gena (October 2014). "Internet Versus Television Advertising: A Brand-Building Comparison.". Journal of Marketing Research 15 (5): 578–590. 
  6. ^ a b Jansen, Bernard J; Moore, Kathleen; Carmen, Stephen (2012). "Evaluating the Performance of Demographic Targeting Using Gender in Sponsored Search". Elsevier Ltd. 
  7. ^ Seabrook, Andrea (May 30, 2008). "At 30, Spam Going Nowhere Soon". NPR. Retrieved 1 April 2015. 
  8. ^ Hairong, Li (March 2011). "The Interactive Web". Journal of Advertising Research 51: 13–34.  See p. 14.
  9. ^ "Coalition for Networked Information Information Policies: A Compilation of Position Statements, Principles, Statutes, and Other Pertinent Statements". National Science Foundation. 
  10. ^ a b c "The Battle for Online Behavioral Advertising Regulation and Legislation: A Contemporary History.". Conference Papers -- International Communication Association 1: 1–29. 2011. 
  11. ^ Learmonth, Michael (2009-07-13). "Tracking Makes Life Easier for Consumers". Advertising Age 80 (25): 3–25. 
  12. ^ Guillaume, Johnson D; Greir, Sonya A (2011). "Targeting without Alienating: Multicultural Advertising and the Subtleties of Targeted Advertising". International Journal of Advertising 2 (30): 233–258. 
  13. ^ Sheehan, Kim Bartel; Gleason, Timothy W (Spring 2001). "Online Privacy: Internet Advertising Practitioners' Knowledge and Practices". Journal of Current Issues & Research in Advertising 23 (1): 31–41. doi:10.1080/10641734.2001.10505112. 
  14. ^ Learmonth, Michael (2011-04-04). "Fact vs. fiction: Truth about regulation and online-ad biz.". Advertising Age 82 (14): C6-C7.